Mr WETTENHALL (Tuesday 9 March 2010) (8.37 pm): In rising to participate in the debate on the Valuation of Land and Other Legislation Amendment Bill 2010. I would like to address the need to validate valuations issued prior to the commencement of the new legislation. There has been considerable public discussion about the impact of the Court of Appeal decision on past valuations if not addressed.
The government has moved to address that court decision which overturned decades of past practice in commercial property valuation. If not addressed that decision would have changed the way in which commercial industrial property was valued, resulting in property values falling, valuations falling by
up to 35 per cent and a consequential windfall reduction in the payment of rates and taxes.

However, of even greater concern is that under the current act the court's decision would have to be applied to the last three annual valuations dating back, in some cases, to 2002. This would have resulted in an estimated repayment of rates of more than $600 million and $300 million in land tax.

Who would have worn the cost of this? It would have been ordinary ratepayers. The government could not stand by and let that happen.

Consequently, the bill provides for an amendment that valuations issued prior to the commencement of the new legislation will be validated to be correct as at their effective date.

The bill also provides that existing provisions that require the chief executive to apply the decision to all commercial and industrial valuations over the past three annual valuations be turned off. Existing appeals will not be captured by these validating provisions. On the basis of proceeding in good faith and
without prejudice to negotiate settlements to these appeals, a new provision is being inserted in the bill to allow outstanding appeals existing at the time of the passage of the bill to be decided under the existing legislation up to and including 30 June 2010.

These provisions protect the interests of the state by validating those valuations that are not the subject of appeal and have been accepted by landowners as being correct, thereby ensuring that significant refunds in rates and taxes do not accrue. They also protect the interests of appellants, preserving their appeal rights and providing an opportunity to settle these matters on reasonable terms within a reasonable time frame.  Any outstanding appeals after 30 June 2010 will be decided on the amended legislation, if passed.

The Pacific Fair Court of Appeal decision has thrown into doubt the unimproved value methodology that has been used by State Valuation Services for many years. The court's interpretation of the legislation
has now created two methodologies as to how a valuation is to be determined-one methodology for commercial and industrial properties which delivers a huge reduction in the rates and taxes those property owners would have had to pay, and one methodology for residential property owners which would result in ordinary ratepayers having to pay extra in rates to subsidise the substantial loss of revenue to local governments.

This uncertainty cannot be allowed to continue, and the procedures set out in this bill restore surety to the revenue base.

The property industry has stated publicly through media releases that the implications of the amendments will prove to be a windfall for government in relation to land tax. In effect the amendments equate to a ‘business tax', as property owners who have developed their land to its highest and best use
are now being penalised for this.

I want to assure business owners throughout the state but particularly those in tropical North Queensland and my electorate of Barron River, particularly those involved with the tourism industry, that, contrary to the statements being made by the property industry in the media, this is not a new business tax which will penalise the people of Queensland. This is not even a tax; it is a land valuation.

I recognise that the tourism industry in Far North Queensland in my electorate of Barron River should not be burdened with additional costs, particularly in the current economic climate. Land tax and rates will not increase because of these amendments.

The amendments to the definition of ‘unimproved value' do not change the valuations that have been issued to every landowner in Queensland. Valuations will continue to be based on market sales. This legislation will validate all past valuations, with the exception of those currently under appeal.

This will provide the certainty that landowners and the property industry are seeking. I commend the bill to the House.