Barr faces Liberal attack on rates rises

ACT Chief Minister Andrew Barr has defended his government's record on a 2012 pledge that a 20-year tax reform agenda would be "revenue neutral" during an opposition parliamentary attack.

Mr Barr made the claim when selling the reforms to move from stamp duty to rates revenue as the territory's treasurer in 2012, making the ACT the first state or territory to go down the path many economists recommend.

Chief Minister Andrew Barr defends his record on tax reform. Picture: Elesa Kurtz

Chief Minister Andrew Barr defends his record on tax reform. Picture: Elesa Kurtz

Since then, ABS data has shown a more than 130 per cent rise in rates, vastly outpacing growth in other jurisdictions, while the territory's stamp duty revenues have fluctuated but stayed largely above $200 million since the reform began.

The 2012 pledge also followed former treasurer Ted Quinlan's tax review, which recommended that land tax also be abolished along with stamp duty, a recommendation the government did not adopt.

The government has also equivocated on the election pledge in the years since as it has faced opposition pressure to abandon the reforms, amid Assembly inquiries into various parts of the ACT tax system.

Among those in recent times was an inquiry into the government's unexpected move to change the balance of rates revenue that has seen Canberra's unit owners facing exponential rates increases in the past two years.

But the inquiry in September last year urged the entire rates and land tax system be overhauled, a call the government has ignored, despite Mr Barr expressing some regret over how commercial rates had increased during a recent hearing of a separate inquiry.

Opposition Leader Alistair Coe opened question time on Tuesday by asking Mr Barr if he stood by his pledge that tax reform would be revenue-neutral given the 134 per cent increase in rates revenue, to which he said yes.

The Chief Minister then recited the government's agenda, which had also abolished insurance duties and stamp duty for first home buyers, while increasing the ACT's payroll tax threshold.

Mr Barr also defended the abolition of stamp duty and move to a further land tax-based revenue system given it was a more efficient revenue source.

Asked by opposition MLA Mark Parton how much more rates revenue would increase over the rest of the 20-year reform, Mr Barr said that rates had increased every year since self-government, and would continue to do so.

While the government has been reticent to release any long-term forecasts, possibly in part given the volatile nature of such estimates, he cited budget forecasts that rates revenue was expected to rise about 6 to 7 per cent for the next four years.

He also said that in the 2016 election campaign no one had argued anything else. He said the opposition's policy at the time would have led to even greater taxes for Canberrans, while the government was cutting some taxes.

Mr Coe has since promised that if elected, the Liberals would abolish the government's $500 million-a-year payroll tax and cut rates and land tax.

While the tax reform program has seen rates revenues increase an average of 19 per cent since reforms began, Mr Barr told the chamber that the heaviest lifting had already passed.

He also said people were already voting with their feet, citing 2016 census data that the territory had the highest population growth in the nation.