ACT Budget misses the mark

While unfair taxes and charges remain a sticking point in the 2016 ACT Budget, the property industry remains committed to a partnership with the ACT Government to build the world’s most liveable city.

The Property Council of Australia has long supported the ACT Government’s focus on urban renewal, but warns that inequitable fees and charges continue to apply a handbrake on efforts to revitalise Canberra, in particular the city centre.

“In handing down today’s budget, the Chief Minister says he wants Canberra to be the ‘most liveable city in the world’. However, this budget overlooks a key driver of the ACT economy – the commercial property sector – which has an essential role to play in the Government’s urban renewal agenda and in attracting investment to our city,” says the Property Council’s ACT Executive Director, Catherine Carter.

 

Fire and Emergency Service Levy (FESL)

“We are disappointed with the 25 per cent increase in the FESL, which comes on top of the 35 per cent increase in 2015. This levy can translate into tens of thousands of dollars each year for commercial property owners,” Ms Carter says.

“The most logical, efficient and fair way of funding fire and emergency services is from general revenue. Instead, the tax burden falls heavily and inequitably on the commercial property sector, with no relationship to risk or the probability of having to call on fire and emergency services.

“Unfortunately, the forward estimates contemplate further substantial increases over the next three years. In 2014 the FESL raised $43 million and in 2018-2019 it’s forecast to raise in excess of $80 million. On this basis, it’s clearly time for a rethink by government and for steps to be taken to reduce the unfair and ever increasing burden on property.”

Lease Variation Charge (LVC)

The ACT Government is forecasting an increase in revenue from the LVC, from $14.2 million in 2014-15 to $16.3 million in 2015-16, due to cessation of the remissions available under the economic stimulus package.

“It’s clear to anyone visiting Canberra that the LVC has been a massive obstacle to adaptive reuse in our city for a number of years. If we want a vibrant city centre, we need supportive policies that encourage adaptive reuse, not taxes that stifle redevelopment,” Ms Carter says.

 

Urban renewal

“Despite the Chief Minister’s publicly stated commitment to urban renewal, very little has been earmarked to assist with revitalisation efforts in our city. The $4.1 million to upgrade to the Canberra Theatre and $1.5 million over two years for lighting and footpath improvements in Braddon are welcome, but the sums are very modest,” Ms Carter says.

“Projects such as a new hospital, City to the Lake, the renewal of public housing stock and new roads are all important projects, but they are not new, and are not part of a targeted urban renewal program.

“We are particularly disappointed to note that no major projects or initiatives have been earmarked for the renewal of our tired city centre which is in desperate need of attention. Revitalising our city centre is essential for Canberra to remain competitive and attractive in the 21st century, and it is disappointing that this is not a priority in this year’s Budget.

“In spite of this, there are great opportunities for our city and our future can be bright.

“Taxes and charges like FESL and LVC act as handbrakes on investment and urban renewal of our city centre. Securing Canberra’s place as the world’s most liveable city demands strategic incentives that encourage rather than hinder investment.

“While we are disappointed with a number of aspects of the budget, we remain determined to work with the ACT Government to get the best possible outcomes for the people of Canberra,” Ms Carter concludes.

Media contact: Catherine Carter |M 0412 330 079|P 02 6248 6602