A returned Labor government will push ahead with residential and commercial rate hikes from next financial year, despite calls to halt any increases until the full economic toll of the coronavirus pandemic is known.
Chief Minister Andrew Barr's $4.9 billion economic recovery package sets out plans to start the third phase of Labor's tax reform program in 2021-2022, with rates to rise an average of 3.75 per cent each year.
Most homeowners have been spared a rate increase this financial year, while significant rebates have been extended to commercial property owners, as the government attempted to ease hip pocket pressure amid the virus-induced downturn.
The ACT Property Council on Thursday called for the next ACT government to halt any rate increases, as it expressed concern that commercial property owners were being forced to shoulder a disproportionately large burden during the crisis.
The group's executive director, Adina Cirson, warned that rate hikes could stifle investment at a time the ACT economy, and property owners themselves, could least afford it.
"What we know is that on the ground, increases to rates, particularly at this time, will potentially mean less investment [and] less office, retail and mixed use developments, resulting in a narrower tax base as businesses drift over the border," Ms Cirson said.
But Mr Barr was unapologetic about reimposing rate increases as soon as next year, saying the ACT government would need the revenue to fund essential services.
"We have taken a massive hit in GST revenue and on all of our revenue lines. There is less tax being collected by government at this time," Mr Barr said.
"The question is, if you didn't have some increase in your own-source taxation, what is the consequence? The consequence is either less investment or you have to start cutting jobs and services."
Mr Barr sought to apply pressure to Canberra Liberal leader Alistair Coe, claiming the opposition's plans to freeze residential rates for four years would put public sector jobs and services at risk.
The Liberals have hinted at plans to ease rates pressure on commercial property owners, although they are yet to announce a formal policy. The Canberra Times understands an announcement is imminent.
Mr Coe launched his own attack on the Chief Minister after he handed down Thursday's economic statement, saying his government had squandered the revenue from the "astronomical" rates bill it collected each year and left the ACT budget in a weakened state before the pandemic struck.
"The ACT should have been in a very strong position to weather an economic storm," Mr Coe said.
"Every year this Labor-Greens government takes more and more from Canberrans through staggering increases to rates."
Treasury analysis of the tax reform program thus far showed it had been broadly revenue-neutral, running contrary to claims the government has been raking in exorbitant sums as it slowly weans the ACT off stamp duty.
A separate independent analysis showed low-income homeowners have been the biggest losers from tax reform, while first home buyers were among the most likely to benefit.