How refreshing it is to see one of the major political parties put out some detailed policy several months before an election. Deputy Labor leader Ted Quinlan issued a statement this week giving details of Labor’s rates policy should it attain office at the October election. The policy was not some motherhood waffle, rather it contained some new and interesting proposals. This is how politics should be. It will enable Labor’s political opponents, the media and the community at large to debate the proposals which in turn is likely to improve them.
Labor hit upon two salient points. First, rate rises are often erratic across the city. Secondly, large rises in property values in some suburbs can result in rate rises too large for some residents to bear. These are not new problems. Indeed, they plagued the the Carnell Government in the late 1990s. It had promised not to increase the total rates take by more than the consumer price index. It was greeted with howls of protest when residents in some suburbs were hit with larger-than-CPI increases while other suburbs had decreases. The Government sensibly introduced a system of a rolling three-year average. This ironed out some of the more glaring glitches but did not address the more fundamental trend – – namely that the value of land in the inner south and inner north has been rising at a far greater rate than the value of land elsewhere in Canberra. The Government attempted to address this by introducing a fixed-charge component of the rates bill, so that the total rates bill is less dependent on average unimproved values of land.
Labor has now promised to keep individual rates within CPI. If the rise of property values warrants a greater-than-CPI increase, it will not be imposed on that property until it changes hands. For long-term residents – – those who have lived in the same house for more than 25 years – – Labor proposes a system of rate rebates to reduce or eliminate the impact of rate increases. The rebate would be repayable to the Government when the ownership of the house changes.
Both these schemes will probably need further development. The danger of holding rates to CPI for individual properties is that it will discourage people from moving to more appropriate housing as they grow older. Also, it will create rate disparities between neighbours and it will mean the government will have to pick up revenue from elsewhere. It may not be wise for governments to forsake the taxation of wealth in the form of property. It is likely that property owners in the inner areas are the sort of people who have the income to afford higher rates anyway. It might well be that if Labor introduces its rebate scheme, there would be less need to have a CPI limitation on individual dwellings in order to protect less-well-off people from large rate rises in the inner area.
Labor’s other proposal – – to cut the appeal fee from $50 to $20 – – is it much needed. The $50 fee is often higher than any great benefit gained by a successful appeal.
But Labour cannot have it both ways. This time last year it attacked the increase in the fixed-charge component on the grounds that “people with a small block in at Ngunnawal will end up paying a similar rates bill to those with larger blocks of land in places like Red Hill”. Now, Labor is expressing concern about those very high rates in the inner area. The Government’s fixed charge component is a way to deal with that and the Government is on the right track to increase that component to about 40 per cent of the total rates grab.
On a related matter, the Government’s scheme to refund half of the first year rates on well-designed houses is an indictment on its land and and planning a management. The criteria it suggests that will lead to this special reward are the very criteria that it should insist upon for (ital) every (ital) new dwellings: being in a character with the townscape (or setting worthwhile radical new benchmarks); being well related to its site; having good open space; interesting and harmonious plants; environmentally responsible construction; and energy efficiency.