Crispin Hull

Major changes to dual occupancy

By allhomes staff

Major changes to the dual occupancy regime were announced today by Planning Minister Simon Corbell.

Under the new regime:

0 Dual occupancy will be allowed on any block throughout Canberra over 700 sq m.

0 Title can be divided.

0 Change of use charges (of 75 per cent of the change in value) will apply throughout Canberra. Previously there was no change of use charge in older areas where lease purposes were described as “residential” without stipulating how many dwellings.

0 Canberra suburbs will have “core residential areas” defined. They will be the areas within 200m of shops, give or take according to section, roads, paths and so on. The rest will be called suburban areas.
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Once again, the diagram illustrates three houses, but with land values now ranging from $0.25m to $5m. The real rate of growth in land values is now assumed to continue at historical rates of 3.5%. The tax liability will consequently be far greater than in the previous examples considered. Indeed, it will quite frequently exceed the property’s total land value. In such cases, optimising agents will presumably defer tax payment until death, at which time the government appropriates the entire land value, but (perhaps) not the liability in excess of the land’s value. This highlights an important difference between a wealth tax and a land tax. A wealth tax is a ‘stable’ tax instrument, whereas a land tax can be ‘explosive’. With a wealth tax, as the tax starts to bite, the level of wealth falls. This in turn induces lower average rates of tax, so that the level of wealth eventually stabilises at some lower equilibrium. With a land tax, as the tax starts to bite (eg $X per period), the level of wealth falls. But this time, even though the level of wealth is falling, required tax payments do not fall, because the land value is not falling! Eventually, real wealth can fall to zero, but the land tax keeps on biting: the same tax payment ($X) or more must still be paid each period.
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The sad case or Arkie Whiteley – daughter of the Australian painter Brett Whiteley — illustrates the need to keep an up-to-date will.

Maybe people do not because think they are immortal; don’t want to think about death; or think that because they will not be around it does not matter.

Arkie’s will has caused great uncertainty and friction. The only certainty is that lawyers will take a significant part of the estate. Arkie’s will was, in fact, up to date. It was made on the day she died. But the fact it had to be made in such a hurry meant it has had some odd results.

Arkie died aged 37 of adrenal cancer. It is incurable. Patients usually get about three months’ notice of death. Still Arkie left the will – literally – to the final hours. Her estate was valued at $14 million. Remarkably much of that was inherited from her father in the form of artworks after an expensive and protracted court battle over uncertainties surrounding the will. You would think a family would learn.
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The Minister for Revenue Senator Helen Coonan was in strife this week over property taxes.

Her strife highlights the illogical, haphazard tax base in Australia.

Coonan shares a house in Woollhara with her husband of 20 years, former NSW Supreme Court judge Andrew Rogers. Rogers had been married before and had property from that earlier married, including a house on the northern beaches which has been held in the name of a family trust/company and later in his name.
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Next week 400 or so faceless men (and women) of the ACT Liberal Party will determine who is to be Senator for the ACT to replace the retiring Margaret Reid.

It is not an open or broadly democratic process, despite it have the largest number of electors in any pre-selection in Australia. Usually, the major parties have smaller numbers in pre-selections for both House and Senate seats.

It is going to be a closed-door affair and the result will be the nomination of a person to represent us. Senate vacancies are filled upon the nomination of the Governor of the State (after a parliamentary vote) or on the nomination by a Territory Legislative Assembly. Before 1972 it was always the convention that the state would nominate a person of the same party as the departing senator. After the convention was flouted in 1974 and 1975, the convention was converted by referendum into a constitutional requirement.
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Once again Australian television and telephony consumers will be shackled with special arrangements, favouritism and patching up past mistakes.

This week the Australian Competition and Consumer Commission finally came to what it (and other commentators) naively imagine will be a rescue of Australia’s pay television industry.

It agreed to authorise what would otherwise be an illegal anti-competitve arrangement whereby Australia’s two main providers of pay television Foxtel and Optus would be able to share pay TV programming and each would be able to bundle telephony, internet and pay TV services into one package with one bill.
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Defence Minister Robert Hill appears to have adopted the adage that “attack is the best form of defence’’.

The adage often works well in soccer matches, but its application to world affairs carries grave threat.

Hill argues that Article 51 of the United Nations Charter should be changed to take account of different world circumstances as a result of rogue states having weapons of mass destruction and the threat of non-nation-states using them in acts of terror.

One of the key aims of the United Nations was to try to apply one of the four great progressive themes of the 20th century to nation states – namely the rule of law. And Hill’s ideas contradict some basic elements of the rule of law. These include objective rather than subjective tests; rules with universal application; and submission of individuals (or individual nation states) to the collective authority.
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The ousting of Solomon Lew from the board of directors of Coles Myer Ltd reveals some serious defects in Australia’s corporations law.

Lew said after his ouster (or failure to get re-elected), “More than 170,000 households filled in a proxy and voted for me and it gives me some kind of mandate.’’

Not only that, about a quarter of the shareholders by value voted for him.

But despite that, he will not get a place on the board. Lew is right. He does have some kind of a mandate.

The basic trouble is that under the Corporations Act 2001 (and all the law before it) shareholders rule the roost. In most cases a simple majority of shareholders is enough to elect all the directors. In an extreme case, a person controlling 51 per cent of the shares gets to elect every director, with no room for any representation for the people controlling the remaining 49 per cent.
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It does not take much to stir up the repeated cry: “We don’t want self-government we just want a local council.”

But events of the past week might show the truth of Oscar Wilde’s adage: In the world there are only two tragedies. One is not getting what one wants, and the other is getting it.

The local-council brigade naively imagine that a local council will be more efficient; that rates and charges would fall; and we would live happily under the benign dictatorship of a federal minister.

In Alice Springs this week, at the meeting of the Local Government Association of Australia, it was made fairly plain that local government has inefficiencies and deficiencies which are felt everywhere in Australia except the ACT.

Federal MP David Hawker, who chairs the House of Representatives Standing Committee on Economics, Finance and Public Administration, painted a fairly grim picture of the funding for local government.
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Fact file

GETTING THERE:

Air Canada offers the most direct access to Vancouver to join cruises through Alaska. It operates daily two-class Boeing 767 services from Sydney, via Honolulu, to Vancouver. Fares vary seasonally but are the same from Sydney, Melbourne and Canberra. Air Canada also offers Air Passes which permit discounted travel to other centres in Canada and the USA, but they must be bought in Australia.

More information phone 02 92868900 or 02 92868917
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