Are we all dead yet? (Libs on tripling rates)

banco said :

I hope Labor pays you for your services on here johnboy.

About time someone said it. This site has gone to the dogs. No balance anymore, just a JB and Barcham inner-north circle jerk.

I hope Labor pays you for your services on here johnboy.

pepmeup said :

The major problems with the new rate rates, is that they are progressive, so people with a higher value property pay both a higher rate and have a higher multiplier. Why not have a flat rate?

The rates system is not progressive it’s regressive. You’re forgetting that there is a large intercept (ie: what you’d pay if your AUV was zero) of $746. So if you own a strata titled block with an AUV of $150 000 you’re paying 0.73%, if you own a house block with an AUV of $450 000 you’re only paying 0.48%. In fact at no point does the effective rate go up.

watto23 – oh, here we go again. Social equity is achieved by forcing people to move out of their homes, because the land has appreciated in value due to circumstances beyond their control.

Good luck with selling that to the punters. As for what it says about the proponents, my guess is that they are divided between those who don’t own a home but are eyeing off the olds’ equity, and those whose comfortable circumstances will be unaffected. Creeps, either way.

The major problems with the new rate rates, is that they are progressive, so people with a higher value property pay both a higher rate and have a higher multiplier. Why not have a flat rate? That way people with more expensive blocks still pay more because their higher Ucv is multiplied by the same rate.

Or the gov could spend more of the rates money on areas where it is collected. Given the inner north and inner south pay the most, you would think we would have the best kept facilities. Instead all the money raised by the rates go to build facilities for people living on cheap small blocks on the edge of Canberra

davo101 said :

HiddenDragon said :

It would be interesting to know which scenario is now being followed

There are two scenarios:
1. Do it in one year
2. Bring it in over 20 years.

I’m guessing they’re going with option two. There are three versions of option two presented as a sensitivity exercise. Which of the three we’ll follow will depend on how the WPI and expenditure pans out (along with the political and economic environment) over the next 20 years–good luck with forecasting that.

If people sought the details rather than the slogans, you’d know that stamp duty on insurance is also being removed in 2015/16 I think which is 10% on insurance premiums. Yes by then you’ll be paying more in rates, but we will always have rate rises. When the new way of taxing us is implemented it will be much fairer than what we have now. What it will enable is for people sitting on valuable land to move to a less valuable area, make $100k+ and not have to pay any taxes out of it to buy another house. Or for all the renters complaining they can’t afford a house, by 2031 stamp duty would possibly be $100K or more so it will be easier to buy as well and maybe more people will live in Canberra rather than Queanbeyan. I bet they have already discussed this as being a problem in 10-15 years when the stamp duty has been reduced to make a difference.

Deref said :

It is a sensible economic reform – but double-dipping by making those of us who’ve already paid stamp duty pay again is gross dishonesty and maladministration.

Right; so how would you implement the transition then?

HiddenDragon said :

I wouldn’t presume to forecast, but my best guess is that increases in rates won’t be fully matched by reductions in stamp duty and we may end up with a 50/50 mix of (somewhat) higher than otherwise rates and (slightly) lower than otherwise stamp duty

Well the problem was always going to be that if a week is a long time in politics then 20 years must be an eternity. If they stick with the budget the rates to duty ratio will go from 54:46 to 61:39 by 2016/17; but will they have the ticker to do it?

davo101 said :

HiddenDragon said :

It would be interesting to know which scenario is now being followed

There are two scenarios:
1. Do it in one year
2. Bring it in over 20 years.

I’m guessing they’re going with option two. There are three versions of option two presented as a sensitivity exercise. Which of the three we’ll follow will depend on how the WPI and expenditure pans out (along with the political and economic environment) over the next 20 years–good luck with forecasting that.

I wouldn’t presume to forecast, but my best guess is that increases in rates won’t be fully matched by reductions in stamp duty and we may end up with a 50/50 mix of (somewhat) higher than otherwise rates and (slightly) lower than otherwise stamp duty – unless there is a national movement to phase out stamp duty, with incentives from the Commonwealth. I am familiar with the well-worn arguments about the evils of stamp duty and the virtues of land taxes, but I think governments will eventually decide that complete policy purity is something they can’t afford in this area.

HiddenDragon said :

It would be interesting to know which scenario is now being followed

There are two scenarios:
1. Do it in one year
2. Bring it in over 20 years.

I’m guessing they’re going with option two. There are three versions of option two presented as a sensitivity exercise. Which of the three we’ll follow will depend on how the WPI and expenditure pans out (along with the political and economic environment) over the next 20 years–good luck with forecasting that.

It is a sensible economic reform – but double-dipping by making those of us who’ve already paid stamp duty pay again is gross dishonesty and maladministration.