May 3, 2016

Turnbull clueless on property tax

Malcolm Turnbull must explain to Australians exactly what he means about using value capture to pay for infrastructure after he was unable to explain in Question Time today whether it would involve higher taxes and charges on existing property owners.

Last week Mr Turnbull launched a pale imitation of Labor’s 10 Point Plan for Better Cities in which he failed to commit a dollar of new funding for infrastructure but proposed funding projects by taxing people whose property values rise because of the construction of those projects.

In Question Time today, Labor asked Mr Turnbull three times whether value capture would apply to existing properties that had their value increased by the provision of new infrastructure.

He failed to answer the questions, dissolving into waffle.

Australians deserve to know exactly what Mr Turnbull means when he says value capture.

As Property Council of Australia Chief Executive Ken Morrison said in a statement last week:

Value capture is not a magic pudding and the risks of damaging the economy with naive approaches are very real.

Does the Federal Government propose introducing new taxes or just encouraging state governments to do so? At the moment we have no idea.

It is time Mr Turnbull moved beyond vague statements and clarified his plans for Australian cities and the way in which those plans might affect existing property owners.

A Shorten Labor Government will invest directly into roads and railways and create a $10 billion infrastructure financing facility to leverage more private investment into infrastructure.

We will augment public investment with sensible value-capture arrangements, such as selling the development rights to space over new railway stations.

Indeed, the former Labor Government committed funding in 2013 to important public transport projects the Melbourne Metro and Brisbane’s Cross River Rail Link which involved elements of value capture.

But the incoming Coalition Government scrapped these projects, as part of more than $4 billion in cuts to public transport funding.