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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?
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milkman 8:55 pm 16 Oct 12

Removing stamp duty increases the ability of a purchaser to buy. As such, more money will be chasing the desirbale properties and they wwill increase in price.

steele_blade 8:43 pm 16 Oct 12

whitelaughter said :

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.

Uh-huh.
Explain where I am wrong then:
Currently, people buy the house they can afford: ie cost+stamp duty+conveyancing etc.

There aren’t enough houses in Canberra. So people will have to fork out the same amount: the money that would have gone to stamp duties will instead go to the seller/their lawyers.

Then, after having paid exactly as much money, the proud new owner gets slugged with increased rates…and the unimproved value of the land has gone up, because of the increase in house prices, so they pay even more in rates!

Sure, this is great for anyone leaving Canberra for good, but how does it benefit anyone who actually wants to live here?

Where you are wrong: Your assumption is that sellers are going to put their prices up by tens of thousands of dollars because they all think they can gouge the money that formerly had to go to stamp duty. The housing market doesn’t work that way. A person may buy a more expensive house than they otherwise would have, that’s up to them. Others will buy at the same level and need a smaller mortgage. Still others will be able to buy earlier than they presently can. All good outcomes.

My way of measuring the proposal: If the system were invented from scratch, would any jurisdiction include stamp duty in their revenue stream? No.

whitelaughter 7:15 pm 16 Oct 12

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.

Uh-huh.
Explain where I am wrong then:
Currently, people buy the house they can afford: ie cost+stamp duty+conveyancing etc.

There aren’t enough houses in Canberra. So people will have to fork out the same amount: the money that would have gone to stamp duties will instead go to the seller/their lawyers.

Then, after having paid exactly as much money, the proud new owner gets slugged with increased rates…and the unimproved value of the land has gone up, because of the increase in house prices, so they pay even more in rates!

Sure, this is great for anyone leaving Canberra for good, but how does it benefit anyone who actually wants to live here?

Frustrated 11:59 am 07 Oct 12

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.

If you think Rates and other expenses will improve under a Liberal Govt, you are delusional.

I agree Rates have gone up over the last 10 years, but so have many other things like Rego and so on.

Things didn’t suddenly become expensive when the Stanhope Govt came into power, Carnell and her Libs were a shocker also.

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