In the last fortnight, I’ve announced changes to address one of the major concerns I’ve heard while travelling across Tasmania.
We’ve taken immediate actions to soften the blow of water and sewerage billing and I have also foreshadowed restoring some of the cuts to public services we were forced to make by the global recession.
In both cases, I have listened to the concerns of the people and I have shown that I am willing to act.
Today, I am going further still.
I am announcing a shake-up of our land tax system.
Land tax is critical to Tasmania for protecting the public services the community expects.
It helps pay for our doctors, nurses, teachers, police, parks officers, hospital workers, justice officers and other important public service positions.
But in securing the revenue for these vital services, we need to strike a sensible balance between the public interest and the interests of those liable to pay.
We have to retain a test of basic fairness and reasonableness.
There are those who would say we have failed this test we have failed in recent times.
I accept that and I am sorry.
I understand your anger.
Know that I have heard your message.
Over the past year and a half, we have been driving a big reform agenda as a government.
We have been impatient in our desire to grow Tasmania and ensure a future where every Tasmanian has a good job and can build a better future for themselves and their families.
Perhaps we have tried to do too much all at once.
No one predicted the strong growth Tasmania would continue to experience during the global recession.
And we recognise we must respond to some of the massive increases in land tax bills triggered by property revaluations.
In years gone by, land tax was seen as a tax on the rich.
That is no longer the case.
Land tax is paid by people leasing business premises and battling to employ people.
It is paid by families with shacks, people running home businesses and by ‘mum and dad’ investors.
The recent round of revaluations has delivered some huge jumps in land tax liabilities.
As I have been talking to everyday Tasmanians, it is clear these jumps have caused pain.
A publican in New Town wrote and asked me to visit him when he received his land tax bill.
I went to see him and he explained that his bill has increased by 674 per cent in one year.
He has invested in his business and proudly employs seven staff.
How is he supposed to manage such a sizeable and unexpected bill without affecting his staff?
It’s a powerful argument – and one I hear loud and clear.
We have to deliver a fairer system that smoothes out the bumps and allows businesses to plan ahead and budget.
We have to deliver a system that allows businesses to keep employing Tasmanians so we retain the lowest unemployment in the nation.
These hikes have hurt businesses, hurt families and hurt ordinary Tasmanians battling to leave something for their kids.
I understand that.
The reason we have built the strongest economy in the nation is to allow us to look after people better and to relieve some of their financial pressures.
That’s why today, I can announce a package of land tax reforms that will put money back into the pockets of the hardest-hit Tasmanians – especially those who employ others.
This will free them up to invest and create new job opportunities for Tasmanians.
This is not an election promise – the most pressing of these changes will begin immediately.
I announce that the Government will:
Return around $18.5 million in land tax rebates to business in the current financial year. This will rise to $31 million in land tax savings to the business sector and broader Tasmanian community in 2010-11;
We will introduce a new flat rate of 1.5 per cent on land values of more than $350,000 across the board – to business and to private investors;
We recognise that due to some large land valuation increases, this cut may not compensate all businesses for their land tax rises. So we will put in place a safety net that will see no business in Tasmania have their land tax bill rise by more than 100 per cent in 2009-10 and in 2010-11;
Land tax will be abolished on shacks with a land value of up to $500,000 from 2010-11;
From 2010-11, intending first home-builders will be given up to two years to complete construction in order to be eligible for a full rebate on the land tax they have paid on their block;
The Valuer-General will receive up to $4 million in additional funding per year to move towards a two to three-year revaluation system that will smooth bill spikes caused by the current six-year revaluation cycle; and
Those Tasmanians running small businesses from home will no longer pay land tax on the part of their home used for business purposes. For example, this could be a family running a bed and breakfast hotel business out of their home or an IT consultant who works for home.
This is a package that means Tasmania will continue to have one of the most competitive tax systems in Australia.
This is a package that relieves pressure to those who have faced the steepest increases in land tax.
This is a package that Tasmania can afford without compromising public services.
And this is a package that will stimulate jobs growth and investment in Tasmania right now.
