The Property Council of Australia has today welcomed news that the ACT Legislative Assembly is to consider a bill to repeal the Fire and Emergency Services Levy (FESL) introduced in 2006.
The FESL, introduced in July 2006, applied a flat $84 charge per household per annum, irrespective of the size or location of the dwelling (pensioners are eligible for a 50 per cent rebate). For commercial property owners, the fire levy is calculated as a percentage (0.4875%) of the land value and generates bills for many property owners of tens or sometimes hundreds of thousands of dollars.
Property Council ACT Executive Director, Catherine Carter, said: “Fire services are a public good and the most logical, efficient and fair way of funding fire and emergency services is from general revenue. This system provides transparency and a clear connection between taxation and benefits. Prior to 2006 the ACT Government actually had this model.
“Today, what we now have, are services which are available to the entire community being narrowly funded by only one segment of the community – property. The tax burden now falls heavily and inequitably on the commercial property sector, with no relationship to risk or the probability of having to call on fire and emergency services. Furthermore, Canberra property owners do not have the benefit of a ‘cap’ to protect them from escalating levy bills driven by rising property values.
“Other states have considered and rejected similar models. In fact, following an 18-month inquiry by the NSW Public Accounts Committee (PAC) into whether to introduce a property based fire services levy in that state, the PAC recommended that the NSW Government refrain from introducing a property based levy citing inequity and unresolved problems this would have on the commercial property sector.
“The tax increases introduced by the ACT Government in the 2006/2007 Budget have created a significant impost on property and a major disincentive to doing business in the Territory. The FESL is an example of particularly poor tax design.
“Property seems to be a continuing easy target for taxation revenue in the ACT. Given the ACT Government now has an apparently unanticipated Budget surplus of over $100 million, largely as a result of land sales and stamp duty on commercial property, the Government can well afford to do away with such a regressive and inefficient tax”, Ms Carter said.
For further information contact:
Catherine Carter, Executive Director, 02 6248 6902 or 0412 330 079