NO POLITICIAN worth his salt should stand by and see families and farmers on the urban fringe pay a tax that no other landowner in Australia has to pay, argues MICHAEL HOCKING
Hundreds of families on Melbourne's fringe seem set to receive a tax blow so big, some will never recover.
After holding out for 15 months the National-Liberal Coalition looks set to cave in to the Victorian Government's proposal to introduce a Growth Area Infrastructure Contribution tax targeting landowners in the process.
A deal has been struck between the Coalition and the Government that sees land within Melbourne's expanded boundaries incurring an upfront property tax when sold.
Land less than 10ha with a habitable dwelling is exempt when sold, as is vacant land under 5ha. However, a tax of $95,000 a hectare will be indexed and payable when the land is developed.
But all land of more than 10ha will incur an upfront tax. So if you own one square metre above the 10ha threshold, you will incur at least $285,000 in tax when the property is sold.
If you are lucky enough to own eight or nine tax-free hectares your land is now probably worth considerably more than your neighbour who owns 10 to 12ha.
No logic can justify taxing a property owner more than a quarter of a million dollars for owning one square metre more than someone else.
When first announced the GAIC tax was deemed to be so flawed that not only landowners and opposition parties opposed it but the entire development industry represented by the Master Builders Association, Housing Industry Association, Property Council of Australia, Urban Development Institute of Australia and the Australian Property Institute.
These groups signed an open letter to the Premier calling for a change to how the GAIC would be levied.
In February this year opposition parties united to defeat the GAIC Bill in the Upper House. Democracy at work and most would have thought that would be the end of the matter, however Premier John Brumby drew on a little known piece of legislation that allows defeated Bills to be brought before a Disputes Resolution Committee.
This Labor-dominated committee ensures rejected Bills can be reworked and presented again to the Upper House. One would think a flawed Bill that has simply been rebadged would fail again. But here's the twist.
If it is rejected for a second time the Government obtains the right to call an early election gaining a potential tactical advantage over the Liberal-National Coalition particularly this year when the Brumby Government had previously committed to a November election.
The threat of an early election seems to be the tipping point for Ted Baillieu who has until now steadfastly supported landowners.
The Dispute Resolution Committee is supposed to meet in private. The chairman, Peter Bachelor, announced the committee's secret findings to Parliament this week and within a matter of minutes both sides of politics voted to support amendments.
If Mr Brumby gets his much maligned upfront GAIC tax it will be because Ted Baillieu voted for it under threat of an early election. Forgotten in all the political wrangling are several hundred devastated landowners who happen to live in Victoria, the only state in Australia to tax landowners for the cost of infrastructure.
Mr Baillieu has one last chance to right this wrong. He can defeat this Bill for a second time in the Upper House. No politician worth his salt should stand by and see families and farmers on the urban fringe pay a tax that no other landowner in Australia has to pay.
Across the border in NSW farmers can sell to other farmers, and lifestyle property owners can sell to families moving from the city to the country without payment of an infrastructure tax.
Regardless of land size, if you apply for and are granted approval to develop land in NSW that is when a development tax is levied. That process is simple and fair and Victorian landowners deserve no less. Show us what you are made of, Ted.
- Michael Hocking is chairman of lobby group Taxed Out.
