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Legislative Assembly for the Australian *Estimates - QTON No. E16-21 LEGISLATIVE ASSEMBLY FOR THE AUSTRALIAN "CAPITAL TERRITORY SELECT COMMITTEE ON ESTIMATES 2016-17 MR BRENDAN SMYTH MLA (CHAIR), MR JAYSON HINDER MLA (DEPUTY CHAIR), Ms Joy BURCH MLA, MR STEVE DOSZPOT MLA ./• \ ANSWER TO QUESTION TAKEN ON NOTICE DURING PUBLIC HEARINGS 2 4 JUN 2016 Asked by Mr Hinder on 20 June 2016: Mr Barr took on notice the following question(s): Ref: Hansard Transcript 20 June 2016, page 214. In relation to: MR HINDER: Treasurer, the authors of the Pegasus report spoke about having reservations about the government's ability to realise the identified offset or the full quantum of identified offsets. Is Treasury able to produce a list of the offsets so we can put that to bed? Mr Barr: Yes, I think that is- MR HINDER: I build into my question a supplementary: can we ask Treasury to produce, if possible, a response to the Pegasus report- Mr Gentleman: The answer to the Member's question is as follows:- As Acting Treasurer I have provided a Government's Response to the Pegasus Economics Report on the 2016-17 Budget to the Committee. Additional details regarding the offsets are presented at Attachment A to the Government's Response. Approved for circulation to the Select Committee on Estimates 2016-17 Date: .2A/,t/, ,b By the Acting Treasurer, Mick Gentleman MLA *Estimates - QTON No. E16-22 LEGISLATIVE ASSEMBLY FOR THE AUSTRALIAN CAPITAL TERRITORY SELECT COMMITTEE ON ESTIMATES 2016-17 MR BRENDAN SMYTH MLA (CHAIR), MR JAYSON HINDER MLA (DEPUTY CHAIR), Ms Joy BURCH MLA, MR STEVE DOSZPOT MLA ~CElv~ ~ c ANSWER TO QUESTION TAKEN ON NOTICE DURING PUBLIC HEARINGS 1 2 JUL 2016 Asked by Mr Doszpot on 20 June 2016: Mr Barr took on notice the following question(s): Ref: Hansard Transcript 20 June 2016 pages 102-103. In relation to: Retirement villages and general rates MR DOSZPOT: Will this change in rating methodology that you refer to apply to retirement villages? Mr Salisbury: With retirement villages, different rating methodologies apply, depending on whether they are commercial or whether they are charitable. There is not a simple answer to that. It will really depend on the structure of the retirement village. ·MR DOSZPOT: What about retirement villages such as, say, Ridgecrest in Page, which is unit plan? How will it affect them? Mr Salisbury: I am sorry, I do not have the detail on that particular unit plan. Mr Barr: Are they individually titled? MR DOSZPOT: I understand so. I will have to- Mr Barr: If you give us some information in relation to- MR COE: I understand it is unit title. Mr Barr: Yes. MR DOSZPOT: Yes. MR HINDER: But is it a retirement village, then? Mr Barr: We are happy to look at it. If there is a particular case you would like to bring forward, we are happy to look at that. MR DOSZPOT: There are retirement villages that fall into two different categories, as we have seen. An example we were asking about is a situation where residents of, say, Ridgecrest at Page pay much higher rates than residents in nearby Villaggio Sant' Antonio and Coral Park, which are on adjoining blocks. But because of- Mr Barr: It would depend on the nature of the arrangements for those and the leases. MR DOSZPOT: Yes, that is correct. These are some of the- Mr Barr: We will certainly happily look at that, but if that is the case now then I do not think this change is going to dramatically impact upon them. If they are already paying differential amounts, that will reflect the commercial nature or otherwise of those particular retirement villages. But happy to lc:>ak at the detail. MR DOSZPOT: We will put it on notice. Mr Barr: Sure, yes. MR DOSZPOT: Thank you. I Mr Barr: The answer to the Member's question is as follows:- Most retirement villages/nursing homes do not pay rates as they are owned by charitable organisations. Some retirement villages are not associated with charitable organisations and the dwellings are unit titled. Where the dwelling is unit titled, the resident purchases the property and pays rates and other costs. The new rating methodology will apply to unit titled properties. Un.der current arrangements residents of retirement villages/nursing home run by a charitable organisation do not pay rates (directly or indirectly), while residents of unit titled dwellings in retirement villages do pay rates. This will not change under the new methodology. Approved for circulation to the Select Committee on Estimates 2016-17 Signature: ~;;:,_, Date: 1:z.. '1. '' By the Treasurer, Mr Andrew Barr MLA Page 2 of 2 *Estimates - QTON No. E16-23 LEGISLATIVE ASSEMBLY FOR THE AUSTRALIAN CAPITAL TERRITORY SELECT COMMITTEE ON ESTIMATES 2016-17 - 1 JUL 2016 ANSWER TO QUESTION TAKEN ON NOTICE DURING PUBLIC HEARINGS Asked by Alistair Coe MLA on 20 June 2016: Andrew Barr MLA took on notice the following questions: Ref: Hansard Transcript 20 June 2016, Page 217 to 219 In relation to: Methodology for calculating rates for units MR COE: A top-floor penthouse-type apartment is therefore going to be valued much higher than the comparable floor plan on level 2 of that same building if it is a 12 or 14 storey building. It is quite an important question. What is the answer to that? Mr Nicol: We do not intend to change the relativities between the number of units and the AUV of the block. Rates are based on AUV, not on market value of a property. The new arrangement will be based on the AUV of the block. Rates are calculated on that AUV. That total is then divided into the number of units, rather than the current methodology where we divide up the AUV amongst the units and then apply the rating factors on the smaller AUV values. But we can give you a detailed explanation of exactly how it will work in those situations. Mr Corbell: The answer to the Member's question is as follows:- Under the current arrangements, the land value (average unimproved value (AUV}} for each unit is used to determine how rates are calculated. Under the current system, the land value for the entire property is determined using the standard valuation methodologies. That land value is split amongst units on the property according to their unit entitlement, and then the marginal rate is applied to each ofthose individual land values to calculate the variable component of general rates for each unit. Unit entitlement is determined when the development application for the building is submitted to the Environment and Planning Directorate, and it is determined using professional standards which take account of such factors as: the amount of floor space, the number of parking spaces and the view and aspect of the unit. The unit entitlement can be seen as a relative value of each property within the development. The unit entitlement is also used to determine strata title fees and strata rights. Under the new arrangements to apply from 2017-18, the variable component of general rates for the entire property will be determined first (based on the land value) and then this liability will be split according to unit entitlements. There will be no change to how the land value of the block is calculated. All units will continue to pay the general rates fixed charge, which is the same for all residential properties. The following example demonstrates the difference under the current general rates arrangements and the new method that will commence from 2017-18. In this hypothetical example, a complex is made up of nine separate unit dwellings. Eight units have a 0.1 unit entitlement, and one unit has a 0.2 unit entitlement. The AUV of the complex is $1 million. The rates, thresholds and fixed charge used in this example are: Threshold Marginal Rates Oto $400,000 0.20% $400,001 to $600,000 0.35% $600,001 to $900,000 0.45% $900,001 and above 0.55% Fixed charge $500 Existing calculation of rates Formula for general rates liability= (Complex AUV x unit entitlement) x rating factors+ fixed charge Units 1 to 8 (unit entitlement 0.1) = ($1 million x 0.1) x rating factors+ $500 = $700 Unit 9 (unit entitlement 0.2) = ($1millionx0.2) x rating factors+ $500 = $900 Total rates $6,500 New calculation of rates (from 2017-18) Formula for general rates liability= (Complex AUV x rating factors) x unit entitlement+ fixed charge Units 1to8 (unit entitlement 0.1) = ($1 million x rating factors) x 0.1 + $500 = $840 Unit 9 (unit entitlement 0.2) = ($1 million x rating factors) x 0.2 + $500 = $1,180 Total rates $7,900 Approved fcion t the Select Committee on Estimates 2016-17 Signature: .. --=> Date: :------~-+--~---.,e.- ·{ By the Acting Treasurer, Mr mon Corbell MLA Page 2 of 2 *Estimates - QTON No. E16-24 LEGISLATIVE ASSEMBLY FOR THE AUSTRALIAN CAPITAL TERRITORY SELECT COMMITTEE ON ESTIMATES 2016-17 ANSWER TO QUESTION TAKEN ON NOTICE DURING PUBLIC HEARINGS Asked by Alistair Coe MLA on 20 June 2016: Andrew Barr MLA took on notice the following questions: Ref: Hansard Transcript 20 June 2016, Page 219 In relation to: General rates calculation for units from 2017-18 MR COE: How is it and why is it that this will see 20 per cent next year and 20 per cent the year after? Is it simply because of- Mr Barr: 20 and 15. MR COE: 20 and 15; is it simply because the factor is going to be changing or is it due to a phasing in of the new factor? Mr Nicol: It is the latter.
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