What’s with the scare story about rates tripling?

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.


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45 Responses to What’s with the scare story about rates tripling?
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Gungahlin Al Gungahlin Al 3:25 pm 21 Sep 12

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.

Chop71 Chop71 3:23 pm 21 Sep 12

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?

mezza76 mezza76 3:19 pm 21 Sep 12

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.

c_c c_c 3:17 pm 21 Sep 12

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]

c_c c_c 3:16 pm 21 Sep 12

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]

chewy14 chewy14 3:11 pm 21 Sep 12

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.

54-11 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.

Mysteryman 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?

Kramer 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.

Grrrr 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.

Very Busy 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.

arescarti42 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.

Very Busy 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.

Doc Dogg 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…

Mysteryman Mysteryman 1:30 pm 21 Sep 12

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

Mothy 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?

Truthiness 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.

bd84 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.

stillflying 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.

davo101 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.

    johnboy johnboy 12:31 pm 21 Sep 12

    Now with a response from Andrew Barr’s office.

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