ACT Treasurer Andrew Barr has left the door open for further refinement of the rating system for units and apartments, after the architect of the ACT's tax reform, Ted Quinlan, called for "a more sophisticated solution".
The former treasurer hit out at changes to the way rates and land tax was calculated for multi-unit dwellings in last year’s budget, after owners in larger complexes were left paying more than those in smaller ones.
Before, rates were calculated after the property's unimproved value had been divided between the number of apartments of units there were on site.
That meant most apartments fell into the lowest tax bracket.
Now the rates are calculated on the entire land value, then divided between the number of units, pushing most unit owners into the top tax tier.
However that effect is distorted in larger complexes.
A multi-unit complex with an average unimproved value of $750,000 would have a valuation-based charge of $4039 per unit if it only had two units, but a charge of $4506 if it had 300 units.
Similarly, a complex with an average unimproved value of $1.05 million would have a valuation-based charge of $6219 per unit if there 10 units, but $6308 if it had 200 units.
Mr Quinlan - who is an apartment owner - said the revised system created an "inequity which penalises some owners within larger complexes compared to those in an establishment with a few individual units all other things being equal".
Speaking to Fairfax Media, Mr Quinlan said reforming the tax system was a “noble pursuit” but the changes were a “rough and ready solution”.
“I’m not telling the current treasurer how to do his job but they’ve used a fairly blunt axe,” Mr Quinlan said.
“They need to take it back to the drawing board and rework it from the ground up."
In question time on Thursday, Mr Barr said he did not believe the tax system he had created was unequal and that current treasurers did not have to agree with past treasurers.
However he did not rule out changes to the rating system when asked if he would rethink the method of calculation.
“The government of course makes changes to legislation, pertaining to rates and taxes and other matters each year in budget processes and sometime more frequently so I wouldn’t necessarily rule anything in or out Mr Speaker and I’ll look at the comments of former treasurer Quinlan as I would at comments from anyone else in the community,” Mr Barr said.
An inquiry is under way into the changes, however the findings will be delayed after the ACT Legislative Assembly voted to set up a privileges committee into the conduct of Canberra Liberals Alistair Coe, Elizabeth Lee and Candice Burch over a flyer they distributed to letterboxes last month.
The flyer called on people to file submissions about how increased rates and land taxes had negatively affected their families via a website registered to Mr Coe.
Mr Coe said all submissions were automatically forwarded onto the committee unchanged but Labor backbencher Bec Cody said there was no evidence of this, opening up the possibility the inquiry has been "biased" or "corrupted".
Ms Cody had suggested the privileges committee be given until the end of the year to investigate the potential breach of parliamentary rules, but Greens crossbencher Caroline Le Couteur put up an amendment to instead set a reporting deadline of July 31.
The rates inquiry can continue while the privileges committee conducts its investigation, however it cannot make its recommendations to government until after that date.
Ms Cody denied the privileges committee was a way for Labor to scuttle the inquiry.
“Labor supports all sorts of inquiries into government issues. This is no different. However I think it’s really important we ensure the committee process is not messed with in anyway shape or form,” Ms Cody said.
“It puts our democracy at risk if government inquiries are fundamentally fiddled with.”
Mr Quinlan said the delay to the inquiry could be good if the government “used the breathing space to come up with something productive”, but that the Liberals should have left the committee to do its job.
However Mr Coe defended Ms Burch and Ms Lee, saying it was the job of local members to “go out, have their say and encourage Canberrans to do the same”.
“The Labor party might not like the Liberal party putting out fliers, the Labor party may not like having their voices heard but we’re going to keep doing it, we’re going to keep working hard for Canberrans, for the silent majority of Canberrans who are struggling with the cost of living, struggling with this rates and land tax regime, and they will have their voices heard,” Mr Coe said.
Ms Le Couteur said she had no problem with Liberal politicians having opinions but she drew the line at them distributing “potential misleading” material.
“They should have known better,” Ms Le Couteur said.
Ms Le Couteur said the privileges committee should examine all third party tools that prompted people to file submissions to Legislative Assembly inquiries, and that the whole system should be overhauled.
That would include a Union ACT pro forma used to file submissions to last year's insecure work inquiry.