Property tax falls short of forecasts
Liberal Treasury spokesman Brendan Smyth criticised Wednesday's property tax result. Photo: Rohan Thomson
The ACT government collected less than a quarter of the money it expected from its controversial ''change of use charge'' in the September quarter.
Treasury's quarterly snapshot of the territory's finances, published on Wednesday, shows that just $1.3 million was raised from the tax out of an expected $5.9 million and the Canberra Liberals were on the attack, branding the charge a ''failed tax''.
But the government insists that it is owed $21 million in Lease Variation Charge (LVC) revenue.
The levy on property developers building multi-unit developments was introduced in 2010, amid opposition from the Liberals, with an expectation that more than $23 million would be raised in the 2011-2012 financial year but only $8.7 million was paid.
Elsewhere in the report, Treasury notes that the budget balance sheet is strong with an $81 million surplus recorded for the quarter but a hefty deficit of $381 million is predicted for the end of the financial year.
''The Territory's Balance Sheet remains strong,'' the authors note.
''However, Net Debt and Net Financial Liabilities have deteriorated mainly due to additional borrowings undertaken to support the Territory's Infrastructure Program and a decrease in cash and deposits.''
Liberals Treasury spokesman Brendan Smyth seized on the LVC figures yesterday, branding it a ''bad tax''.
''The lease variation tax is a bad tax, as it stymies redevelopment proposals, and this latest data reinforces how this tax is failing to realise the expectations the Labor Government has placed on it,'' Mr Smyth said.
''The Labor government has put a lot of emphasis on the potential for the lease variation tax to raise additional revenue and yet we have seen that this potential has not been realised.
''There was the dismal performance of this tax during the last financial year - when it only raised $8.7 million after the government budgeted for revenue of more than $22 million.''
The Liberals frontbencher said the tax was holding back development in the capital. ''It now appears that, even though there are many redevelopment proposals which could proceed across the ACT, these projects will not get off the ground while the lease variation tax continues in its current form.
''The lease variation tax is a dead weight on the economic potential for the ACT and should be reviewed immediately.''
But Treasurer Andrew Barr dismissed Mr Smyth's attack as ''nonsense'' saying that the success or failure of the tax could not be determined until the end of the financial year.
''The quarterly report shows the variance in revenue equates to less than 1 per cent of total quarterly revenue,'' Mr Barr said.
''What's more, it's important to wait for the end of the financial year when a complete picture of revenue and expenditure is available.
''As such, it's nonsense for the Liberals to suggest the variance in LVC revenue demonstrates a need for budget cuts.''