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Australian Capital Territory (Planning and Land Management) Amendment Bill 1997

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1997   

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 



AUSTRALIAN CAPITAL TERRITORY (PLANNING AND LAND MANAGEMENT) AMENDMENT BILL 1997

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

(Circulated by the authority of  the Minister for Regional Development, Territories and Local Government, the Hon Alex Somlyay MP)

 

 

10975 Cat. No. 97 1622 X ISBN 0644 36470X



 

Australian Capital Territory (Planning and Land Management)

Amendment Bill 1997

 

OUTLINE

 

The Australian Capital Territory (Planning and Land Management) Act 1988 provides for the planning of the Australian Capital Territory and the management of land in that Territory.  The Act provides (at s29(3)) that the term of an estate in Territory Land granted on or after Self-Government Day shall not exceed 99 years or such longer period as is prescribed, but the estate may be renewed.

 

This Bill will amend the section to extend the maximum term of an estate to 999 years and remove the provision for prescribing longer periods.  This will clear the way for the Australian Capital Territory Government to issue new leases over Territory Land for periods longer than 99 years.

 

Background

 

Most sections of the Australian Capital Territory (Planning and Land Management) Act 1988 took effect on 31 January 1989.  Section 29 took effect on 11 May 1989, Self-Government Day.  The Act established the National Capital Authority and provided for the creation of a National Capital Plan and a Territory Plan.  It also makes provision for the division of land in the Territory between National Land and Territory Land. 

 

National Land is so declared by the Minister by notice published in the Commonwealth Gazette and includes only land used or intended to be used by or on behalf of the Commonwealth (section 27).  Land that is not National Land is Territory Land (section 28).  The ACT Government manages Territory Land on behalf of the Commonwealth and under subsection 29(1) may, subject to section 9 of the Seat of Government (Administration) Act 1910,  grant, dispose of, acquire, hold and administer estates in Territory Land.

 

The ACT Government has sought an amendment to the Act to remove the 99 year restriction from Territory Land leases.

 

 

FINANCIAL IMPACT STATEMENT

 

The Bill will have no direct effect on Commonwealth expenditure or revenue.

 

 



REGULATION IMPACT STATEMENT

 

Section 9 of the Seat of Government (Administration) Act 1910 provides that no Crown lands in the Territory may be sold or disposed of for freehold estates. 

 

 

Problem or issue

 

An amendment to the Australian Capital Territory (Planning and Land Management) Act 1988 is proposed to address a perceived disincentive to business and other investment in Canberra, brought about by the limit of land tenure to 99-year estates, as distinct from freehold title enjoyed elsewhere in Australia.

 

 

Specification of the desired objective

 

The objective of the proposed amendment is to strengthen land tenure security for both residential and business purposes and thereby increase the attractiveness of Canberra to potential investors, by enabling 999-year leases.

 

 

Identification of options (regulatory and non-regulatory)

 

The options for achieving the objective are as follows.

 

1.         That section 29(3) of the Australian Capital Territory (Planning and Land Management) Act 1988 (The Act) be amended to increase the maximum period of an estate in Territory Land from 99 to 999 years.  The amended section would read:

 

            “The term of an estate in Territory Land granted on or after Self-Government Day shall not exceed 999 years, but the estate may be renewed.”

           

2.         To introduce a regulation under section 29(3) of the Australian Capital Territory (Planning and Land Management) Act 1988 prescribing a period of 999 years for all, or a specified range, of leases over Territory Land.

 

3.         To amend section 29(3), or introduce Regulations, to provide that all estates in Territory Land, or specified classes of estates, could be automatically renewed to 999-year terms.

 

 4.       To leave the legislation unchanged and rely on the ACT Government to address the perceived disincentive to investment through policy and public information, for example by undertaking to grant renewal of existing leases without fees.

 

 

 

  Assessment of impacts (costs and benefits) of each option

 

1.         Simple amendment of section 29(3) to increase maximum term of estate to 999 years.

 

 

            The benefits of this option are:

·       its clarity and simplicity

·       that it offers an opportunity for Parliament to debate the proposal

·       it gives the ACT Government maximum control and flexibility in administering estates in Territory Land

·       it delivers to ACT business and residents benefits more closely aligned with those enjoyed elsewhere in Australia where land is freehold.

·       A change as significant as this is appropriately made by Act of Parliament rather than by regulation.

 

            The costs are:

·       The opportunity for the ACT Government to raise revenue through fees for renewal at the end of a lease would potentially occur only once every 999 years instead of 99 years.  However, revenue can still be raised for changes in lease purposes.

 

2.         Increase of term of estate by regulation.

 

            The benefits of this option are:

·       Regulations provide a simpler mechanism for changing the maximum term of an estate.

 

            The costs are:

·       The maximum term  of 99 years would remain expressed in the Act, perhaps failing to address the perceived disincentive to investment.

·       The opportunity for the ACT Government to raise revenue through fees for renewal at the end of a lease would potentially occur only once every 999 years instead of 99 years.  However, revenue can still be raised for changes in lease purposes.

 

3.         More complex amendment of section 29(3), or Regulations, to provide for automatic renewal of all estates, or a specified class of estates.

 

                        The benefits of this option are:

·       No requirement for lessees to surrender old leases and negotiate new ones.

·       Less paper work and administrative costs for the ACT Government.

 

            The costs are:

·       Less control for both the Commonwealth and the ACT Government over estates in Territory Land.

·       Possible unintended consequences, for example by extending temporary easements, or leases that were intended to be for shorter terms.

·       Introduction of issues of uncertainty, for example in the effect on estates in remainder or contingent leases.

·       Increased potential for challenge to validity of leases.

·       The opportunity for the ACT Government to raise revenue through fees for renewal at the end of a lease would potentially occur only once every 999 years instead of 99 years.  However, revenue can still be raised for changes in lease purposes.

 

4.         No legislative action.

 

            The benefits of this option are:

·       Maximum Commonwealth control over the term of estates in Territory Land.

·       Potential for raising revenue through renewal fees.

 

            The costs are:

·       Continued perceived disincentive to investment in Canberra.

·       Higher administrative costs.

 

 

Impact group identification

 

The groups likely to be significantly affected are:

 

·       ACT Government - increased opportunity to attract investment in Canberra.

·       Commonwealth Government - opportunity to deliver benefits to the ACT.

·       Business - greater attractiveness of Canberra as a place to do business; potential for increased certainty of tenure

·       Rural and residential residents - greater attractiveness of Canberra as a place to live; potential for increased certainty of tenure.

 

This amendment will have no impact upon native title as the proposal would not change the nature of any estate granted; it merely deals with the possible period of estates in Territory Land.  The exercise by the ACT Government of the power to grant estates may affect native title in some cases.  However, in exercising that power the ACT Government is, and would continue to be, bound by Commonwealth Native Title legislation.

 

 

Assessment of costs

 

Government

There are no direct financial implications for the Commonwealth.  In the longer term, the loss of a potential revenue source for the ACT Government will have fiscal implications for the ACT and may therefore have indirect fiscal implications for the Commonwealth.

 

 

Business

There will be a cost only to those businesses which take advantage of the potential to obtain a longer lease over their land.

 

Automatic renewal would not be possible under the proposed legislative change.  Businesses wishing to obtain a lease longer than 99 years would have to surrender their old lease and apply for a new one under the new limitation of 999 years.  The ACT Government has indicated that this is likely to involve only a nominal administrative charge, provided the other terms of the lease were not changed.

 

Consumers

Similarly, other consumers would be required to apply for a new lease in order to obtain the benefit of a longer lease period.

 

 

Assessment of benefits

 

The proposed change would see land tenure in the ACT more closely aligned with the benefits enjoyed elsewhere in Australia under freehold land systems.  It would remove what is seen by many lease holders and potential investors as being an undue restriction.  This may in turn bring economic benefits to the ACT.

 

 

Restrictions on competition

 

The proposal does not involve any restrictions on competition.

 

 

Effects on small business

 

Small business would stand to benefit from the changes.

 

 

Effects on trade

 

There are no perceived effects on trade.

 

 

Consultation

 

The proposal to increase the maximum term of an estate in Territory Land from 99 years to 999 years has been agreed to by the Hon Chris Miles MP, on behalf of the Prime Minister, and by the Hon Daryl Williams AM QC MP, Attorney-General.  It is supported by the Department of Transport and Regional Development, the Department of the Prime Minister and Cabinet, and the ACT Government.

 

The proposal will potentially benefit business and consumers in providing increased security of tenure and possibly consequent increases in land values.  It will have no involuntary impact on these groups.  The Canberra Business Council, Property Council of Australia (ACT) and the ACT & Region Chamber of Commerce and Industry Ltd have been consulted.  No objections to the proposal have been raised by these groups.

 

 

Conclusion and recommended option

 

The preferred option is to amend subsection 29(3) of The Act to replace “99 years or such longer period as is prescribed” with “999 years”.  The section would then read:

The term of an estate in Territory Land granted on or after Self-Government Day shall not exceed 999 years, but the estate may be renewed.

 

This option best addresses the objectives of increasing the attractiveness of Canberra to potential investors and strengthening land tenure security for both residential and business purposes.  The other options are more cumbersome, less certain, and/or inadequate to meet the objectives.  An Act of Parliament will provide greater certainty and reassurance than would Regulations.

 

 

Implementation and review

 

Leasing in the ACT is administered by the ACT Government on behalf of the Commonwealth.  If and when the proposed legislative changes are enacted, the ACT Government has indicated that it intends to introduce legislation into the ACT Legislative Assembly to amend the Land, Planning and Environment Act 1991 (ACT) to facilitate renewal of estates for longer than 99-year terms.

 

Any associated administrative burden will fall on the ACT Government. 

 

A ‘sunset’ clause is not appropriate for this legislation.

 

The National Capital Authority will report in its Annual Report to the Federal Parliament on any significant issues for the Commonwealth resulting from the changes.

 



 

Australian Capital Territory (Planning and Land Management) Amendment Bill 1997

 

 

Clause 1:          Short title

 

Clause 1 provides that the Bill may be cited as the Australian Capital Territory (Planning and Land Management) Amendment Act 1997.

 

Clause 2:          Commencement

 

Clause 2 provides for the Act to commence on the day it receives the Royal Assent.

 

Clause 3:          Schedule(s)

 

Clause 3 provides for the amendment of the Acts specified in the Schedule to the Bill, as set out in the Schedule.

 

Schedule 1 - Amendment of the Australian Capital Territory (Planning and Land Management) Act 1988

 

Item 1:              Subsection 29(3)

 

This provision changes the maximum term of an estate in Territory land from “99 years or such longer period as is prescribed” to “999 years”. 

 

Item 2:              Application

 

Item 2 provides that the amendment made by item 1 will apply to estates granted on or after the commencement of this proposed amending Act.  This provision is included to ensure no past estates granted in breach of section 29(3) would be validated by the amendment.