What's with the scare story about rates tripling?

The property developers must love this.

No stamp duty but higher rates = appartments are suddenly worth a lot more.

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

really, Zed? people who can afford to purchase a home are those in most need?

Skidbladnir said :

As much as I hate the Labor Party, the ACT Liberal Party are a joke of an opposition and are profoundly ineffective as a whole.

They have a few members who seem like they could actually lead a Party to election victory and might otherwise be judged as worthwhile voting material, if they weren’t clearly so dain bramaged as to follow incompetent leaders to their doom.

Also, Page 16 of the relevant Budget Paper shows the effective benefit of different methods of taxation. Payroll Tax has in excess of 30% wastage in admin overhead, Conveyance and Insurance duties are worse. Putting as much of the burden on general rates makes for a more administratively efficient taxation model.
IE: More bang per buck.

(Does the Liberal Party actually bother to read any paperwork that the ACT Public Service gives them, especially if its relevant to the strength of whatever attack campaign they’re planning?)

Skid says the ACT Libs are a joke and ineffective. More damning criticism would be hard to find.

I’m hoping that Zed et al will read this, and realising the error of the ways immediately decide that the only decent thing to do is to go and fall on their swords to make room for someone who can properly clean house around here. Until they obtain swords and commence falling we will all get more of the same old same old from the ACT Labor mob.

JessP said :

A huge rate increase this year and doubled over the last few years

I don’t know why. Despite a $25,000 increase in the unimproved value of our block since last year, our rates bill went up just $66.

My hope, in a sense, is that the whole thing is really just an elaborately disguised attempt to raise a bit more revenue overall, and that the full horror of it – whether it’s tripling, quadrupling, or “only” doubling is unlikely to happen as proposed – either because we have a change of government (or come close enough to it to frighten Labor and the Greens), or because it is overtaken by broader national developments regarding taxation and revenue distribution. On the latter point, my fear is that, for the ACT, being a first mover could, in this instance, turn out to be a spectacular example of leading with one’s chin.

Those who value an historical perspective might find this article, written in the lead-up to the 2001 election, interesting:

http://www.crispinhull.com.au/2001/06/06/2001_06_june_leader29jun-rates/#more-7292

It suggests that the views held by then Deputy Opposition Leader Ted Quinlan were somewhat different from the views held by now Taxation Review chair Ted Quinlan. Labor’s 2001 rates proposals were fairly promptly abandoned once they had won that election, which was probably a relief to the Liberals who had, of course, vigorously opposed Labor’s proposals. All of which goes to show that those who stay in public life long enough will eventually adopt more positions than the Kama Sutra – I trust the current crew will be no less fluid in their handling of this vexed issue.

Sorry, probably not well written.

Instead of the $250K or so per block the Gov require, make it $230K. Bulk profit from the land, servicing covered.

cranky said :

Govco would be seen in a far better light if, rather than reducing stamp duty, they made land available at a reduced price in the order of $20k per block, balancing the equation for new home buyers.

It costs say $50k per block to service, let alone the cost of the land. This would mean a massive subsidy to the people who buy blocks of land so that what is now a revenue stream turns into a massive nett cost to all taxpayers.

Hmmm, not sure if you have thought this through.

Govco would be seen in a far better light if, rather than reducing stamp duty, they made land available at a reduced price in the order of $20k per block, balancing the equation for new home buyers.

As much as I hate the Labor Party, the ACT Liberal Party are a joke of an opposition and are profoundly ineffective as a whole.

They have a few members who seem like they could actually lead a Party to election victory and might otherwise be judged as worthwhile voting material, if they weren’t clearly so dain bramaged as to follow incompetent leaders to their doom.

Also, Page 16 of the relevant Budget Paper shows the effective benefit of different methods of taxation. Payroll Tax has in excess of 30% wastage in admin overhead, Conveyance and Insurance duties are worse. Putting as much of the burden on general rates makes for a more administratively efficient taxation model.
IE: More bang per buck.

(Does the Liberal Party actually bother to read any paperwork that the ACT Public Service gives them, especially if its relevant to the strength of whatever attack campaign they’re planning?)

Barr would have had some credibility on this issue if he had gone for a phased approach, but no, he had to go for the double hit on those of us who have already paid stamp duty. Stamp duty might be ‘inefficient’, but you only pay it if you move – far batter than the rate increases we’ve all had.

Looking back through old rates notices, the amount we paid back in 2002 (just after Labor took over) was less than the basic flat fee we now pay before taking ULP into account. The increase from then to now is a bit over 2.5 times, and that’s with stamp duty in place.

Tetranitrate said :

The position the libs have taken on this is so juvenile and short sighted that despite having formed the opinion that the present government must go, I’m seriously thinking of putting Labor/Greens ahead of Libs after 3rd parties.
Why can’t the libs come out swinging on the broken planning and liquor licence systems?

Out of curiosity what is wrong with the current liquor licence system?

Tetranitrate said :

The position the libs have taken on this is so juvenile and short sighted that despite having formed the opinion that the present government must go, I’m seriously thinking of putting Labor/Greens ahead of Libs after 3rd parties.

Agreed. I don’t normally support Labor, but I am absoloutely disgusted at the way the Libs have approached this issue. Short term sensationalist scare campaign. Seriously, grow up and treat the electorate with at least a little bit of intelligence. You can remove me from your ‘safe lib vote’ column and put me firmly in the ‘undecided swinger’ (of the voter kind…not any other kind).

The position the libs have taken on this is so juvenile and short sighted that despite having formed the opinion that the present government must go, I’m seriously thinking of putting Labor/Greens ahead of Libs after 3rd parties.
Why can’t the libs come out swinging on the broken planning and liquor licence systems?

Very Busy said :

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.

+1
A huge rate increase this year and doubled over the last few years – and with all the election promises and no stamp duty where are the dollars coming from?

Gungahlin Al said :

Indeed. It prevents people downsizing as they age. They stick instead with trying to maintain oversized yards while families are forced further out where there are no yards for their children. It inhibits people relocating to live closer to work. It inhibits property investments and better rental availability.

Under this plan people with have to downsize because they wont be able to afford to pay there rates and if they choose to defer it they will leave a debt for after their estates.

This from the government that promised us Gungalin Drive extension as a via transport option – and delivered a 2 lane road and 5 years of construction pain?

What about the data scandal?? What does that say about the ACT Government?

For the last 11 years I had faith in ACT Labor to do the right thing, but no more.

This Liberal spin will be hung in a frame alongside that other Liberal masterpiece: “Whyalla will be wiped off the map.”

davo101 said :

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.

This model was rejected.

arescarti42 said :

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.

Indeed. It prevents people downsizing as they age. They stick instead with trying to maintain oversized yards while families are forced further out where there are no yards for their children. It inhibits people relocating to live closer to work. It inhibits property investments and better rental availability.

If some people are caught with limited means but on a property with unrealised high value, there could be a request for a means assessment. We (Maroochy Shire Council) did similar to this on the Sunshine Coast when waterfront property took off in places like Peregian Beach. People who bought in when streets were dirt found themselves on $1M land with no ability to pay the high rates. The solutions to this are already out there in wide use around Australian local governments. This is as I explained to the Inner South Combined Community Council meet the candidates forum last week.

Meanwhile, the Liberals are again hanging their hats on promises like stamp duty waivers for new home buyers – which time and again has proven to just drive up home prices by the same amount.

Mysteryman said :

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

So over 10 years Zed is probably right with his triple rates call.

If it was over 20 years, we maybe could handle it and get rid of stamp duty. That would be something Labor could easily sell. So which is it, 10 years or 20 years?

chewy14 said :

I don’t know why Labor are beating around the bush.

This policy is a great one, they should own it and be proud.

arescarti42 said :

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.

+1.

+1 gazillion. Plenty of people whinge about politics being short-termism (see BCA), but few have the courage to put it action. If sub-national governments are going to break free from the disaster of property boom & busts, this is the sort of politcy that is going to do it.

Unfortunately you give the typical voter, swayed easily by three word sloganeering too much credit.

“Stamp Duty is a horribly inefficient, unfair and ridiculously antiquated tax that acts as a major impediment to labour mobility.”

vs

“TRIPPLE YOUR TAXES”
[Spoken in a menacing voice like narrator just ate a bar of Solvol]

Unfortunately you give the typical voter, swayed easily by three word sloganeering too much credit.

“Stamp Duty is a horribly inefficient, unfair and ridiculously antiquated tax that acts as a major impediment to labour mobility.”

vs

“TRIPPLE YOUR TAXES”
[Spoken in a menacing voice like you just ate a bar of Solvol]

I don’t know why Labor are beating around the bush.

This policy is a great one, they should own it and be proud.

arescarti42 said :

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.

+1.

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.

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?

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.

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.

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.

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.

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.

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…

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

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?

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.

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.

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.

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.