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What’s with the scare story about rates tripling?

By Masquara - 21 September 2012 45

Does anyone know the facts about “rates tripling” as per the Liberal Party ads?

I can’t afford to pay $130 a WEEK for rates on the average wage!

What is Katie Gallagher thinking? And this will affect tenants surely?


UPDATE 21/09/12 12:30: Andrew Barr’s office have sent in this reply:

The Liberals are using an Abbott-style scare campaign about your rates.

Labor is not tripling rates. The Canberra Liberals are wrong.

ACT Labor has changed the rates system to make it fairer, and cut stamp duty to make housing more affordable.

For 33,700 Canberra households rates have gone down.

For others , the average rate increase is $2.35 a week as wages continue to rise and other taxes are cut.

The Seselja Liberals quote a table from the Quinlan tax review but that table was rejected by Government, and does not form part of the rates policy.

The Liberals are peddling a desperate lie, based on a rejected table to cover the fact they have no plan, except to cut jobs.


UPDATE 21/09/12 14:49: Zed Seselja’s office has sent in these thoughts:

Since budget day, Andrew Barr has been gloating about his ‘progressive’ changes to abolish stamp duty. Since Budget day, he has been saying it would be replaced by rates. Since budget day, he has not been honest about how just how much that is going to cost.

Andrew Barr himself said “Canberrans understand that tax changes like the ones I have announced need to be paid for.” ( Budget Speech June 2012)

The changes Andrew Barr proposes will cost the government well over $300 million a year when finished. That’s $300 million that needs to be replaced by rates. That is easily three times higher than the rates revenue generated now. It is simply impossible to abolish one tax and not increase rates by the same amount, without a drastic change to the budget or a massive job cuts to the ACT public service.

After months taking the credit as ‘the great reformer’ for abolishing stamp duty, It is too late for him to run away from the costs of those promises now.

As far as ‘fairness’ goes – How is it fair to those on a fixed income to increase their rates by thousands every year? How is it fair to those who have just paid stamp duty to pay the same amount again every few years – forever?
And how is it fair to those who simply cannot pay, who will then have their debt deducted from their estate, just like a death tax?

It is not a ‘fairer’ tax, it is not a ‘progressive’ tax – it is a bigger tax, plain and simple.

The Canberra Liberals plan is to give support to those who most need it – first home buyers, without tripling rates for everyone else.

It is a choice – people can vote to abolish stamp duty and have their rates tripled to pay for it, or they can vote for the existing scheme, plus support for first home buyers, and keep their rates low.

One thing is guaranteed, rates will not triple under the Canberra Liberals to pay for Andrew Barr’s promises.

What’s Your opinion?


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45 Responses to
What’s with the scare story about rates tripling?
1
davo101 12:20 pm
21 Sep 12
#

Table 45 on p.148 of the ACT taxation review. Although these figures are for a transition over 10 years and I think the current intention is to do it over 20 years.

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2
johnboy 12:31 pm
21 Sep 12
#

Now with a response from Andrew Barr’s office.

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3
stillflying 1:01 pm
21 Sep 12
#

So we’ve heard the labor rebuttal. Any clarification from the liberals on what they were referring to?

Then we can take the labor response and liberal clarification, combine them together, remove the trash talking from both sides and get something closer to the truth.

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4
bd84 1:19 pm
21 Sep 12
#

So, for a minority rates will decrease, everyone else will be at least $122 a year out of pocket, probably increasing on an annual basis as more taxes are abolished. I believe the argument by the Liberals is that everyone in Canberra will pay for the removal of taxes that are only paid by a small part of the community or on a rare occasion when the buy or sell something.

I think the government are trying to hide the full cost to the public and how much we will need to pay for it, but I also think the liberals are exaggerating with the tripling of rates. But then this is an election and you will get that from all parties as that’s what people pay attention to.

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5
Truthiness 1:23 pm
21 Sep 12
#

Tripling over twenty years is the same as a yearly increase of 5.75% compounded annually. Over ten years it is more like 11.5%, which is still only slightly more than landlords can legally increase a tenant’s rent each year.

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6
Mothy 1:30 pm
21 Sep 12
#

I keep thinking about this article each time I hear that “triple your rates” claim.

And wondering where the land to develop (and people to populate it) is going to come from if the Libs expect to be able to rely on stamp duty ad infinitum going forward.

Or I imagine an Abbott Govt federally, subsequent public service cuts, the resulting population decline for Canberra, and the resulting impact on the local housing market – and what does that do to ongoing stamp duty revenues?

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7
Mysteryman 1:30 pm
21 Sep 12
#

The PDF that davo101 posted shows an average of $1056 to $2932 in 10 years.

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8
Doc Dogg 1:38 pm
21 Sep 12
#

We could always just get the ACT Government (of whatever flavour) to spend less money on things we don’t need so that they don’t require as much money from the rates payers.

Don’t laugh, it could happen…

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9
Very Busy 1:51 pm
21 Sep 12
#

My average annual rates bill has doubled, with an average annual increase of 6.5% since ACT Labor came to office. That is more than double the rate of CPI increases.

Huge increases in 2004 and 2005 of 18% and 21% respectively would be partly to blame. Going by ACT Labor’s track record, I wouldn’t be at all surprised if Labor threw in a couple more “one off” massive increases as they have done in the past.

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10
arescarti42 1:52 pm
21 Sep 12
#

Stamp Duty is a horribly inefficient, unfair and ridiculously antiquated tax that acts as a major impediment to labour mobility. Replacing it with increased rates (e.g. higher land taxes) is a brilliant idea that every state should be doing.

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11
Very Busy 1:53 pm
21 Sep 12
#

Doc Dogg said :

We could always just get the ACT Government (of whatever flavour) to spend less money on things we don’t need so that they don’t require as much money from the rates payers.

Don’t laugh, it could happen…

Yeh, like GDE version 1.

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12
Grrrr 2:34 pm
21 Sep 12
#

Well, I’m getting screwed over. Firstly, my current house falls close to the Median ACT house price value .. but according to table 45 in the ACT Taxation review, I’m well in the top quintile for rates.

I have just purchased a new house, and handed the government quite a large pile of stamp duty. The AUV made up like 60% of the purchase price, and rates are even higher. According to the tax review, within 10 years I WILL be paying 3.5 times the current rates. Even adjusted for 3% inflation yearly it’s still 2.5 times the current rates.

The end result: Once the transition is complete, every 7 years they will extract from me extra rates above the current level equivalent to the stamp duty I have just paid. (I don’t plan to move every 7 years.)

Within a decade I will have paid one year’s worth of wages in stamp duty + rates. Not happy.

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13
Kramer 2:46 pm
21 Sep 12
#

Masquara – another stab at Labor? Don’t you need to back announce Liberal Party propaganda with “written and authorised by ….”???
Anyone with half a brain could identitfy the pathetic fear campaign attempt in this ad a mile away.

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14
Mysteryman 2:55 pm
21 Sep 12
#

Kramer said :

Masquara – another stab at Labor? Don’t you need to back announce Liberal Party propaganda with “written and authorised by ….”???
Anyone with half a brain could identitfy the pathetic fear campaign attempt in this ad a mile away.

It sounds like you have half a brain. Care to explain the table on p. 148 of the link posted in the first response?

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15
54-11 2:55 pm
21 Sep 12
#

Kramer said :

Masquara – another stab at Labor? Don’t you need to back announce Liberal Party propaganda with “written and authorised by ….”???
Anyone with half a brain could identitfy the pathetic fear campaign attempt in this ad a mile away.

If Masquara had another brain, it’d be lonely.

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