Thursday, September 29, 2016

Your rates aren't rising to pay for light rail

Your rates aren't rising to pay for light rail. Taxation reform introduced following the 2012 election has seen inefficient taxes removed and stamp duty start to be phased out. Rates and land tax has risen as a result. The reasons for taxation reform are that the ACT requires a reliable revenue stream, and the stamp duty income is heavily dependent upon land sales and real estate booms.

These articles explain this quite well:

The idea to eliminate stamp duty was the result of best practice, non-partisan recommendations from taxation specialists, primarily the Quinlan review. Read the ACT Taxation Review from May 2012 here.  

Rates are also increasing because of our compounding capital and maintenance costs of the city's infrastructure, namely roads, sewerage and draining systems, electrical distribution network, telecommunications, waste management, parks and gardens upkeep, etc. 

This ever expanding infrastructure liability, spread over a very low density taxation base, i.e. Ratepayers, means that each of us has a bigger and bigger bill as we spread our suburbs further into the surrounding countryside.

Light rail and its associated land use relationship is proven to actively combat the problem of suburban sprawl. Making use of already existing infrastructure and attracting development within the established urban footprint it will increase the taxation base such that Canberra will be more than able to afford future infrastructure capital and maintenance liabilities.

Plus, with the uncoupling of the city's reliance on stamp duty as a source of income, we can also combat suburban sprawl by not being reliant on the sale of land to fund these things.

The two graphs below illustrate two things:
  • That light rail is a small component of the ACT Budget
  • That there is no possible way that rates increases are driven by light rail in the context of all other government spending

But aren't our rates skyrocketing? There is no question that peoples rates are increasing. They have not tripled. No ones rates have tripled. Increases have been due to stamp duty reduction and the associated increase in rates, and the increase in your property value since 2012. As property values increase, so will your rates. 

This graphic from the Riot Act demonstrates this well.

For more frequent updates on Capital Metro and light rail related news, please visit our Facebook page 'Light Rail for Canberra'.  

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