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Industry Commission reference on taxation on financial policy impacts on urban settlement



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THE TREASURER

PRESS RELEASENo.120JOHN KERIN M P

STATEMENT BY THE TREASURER, THE HON JOHN KERIN MP - INDUSTRY COMMISSION REFERENCE ON TAXATION AND FINANCIAL POLICY IMPACTS ON URBAN SETTLEMENT

I am announcing today that I have forwarded to the Industry Commission a reference on the impacts of taxation and financial policies on urban settlement, for inquiry and report by 20 February 1993.

This reference follows consideration of the report of the Commonwealth/State Working Group on Patterns of Urban Settlement at the July 1991 Special Premiers' Conference.

That Conference agreed that, inter alia, urban consolidation should be promoted, planned and supported. Agreement was also reached that an intergovernmental approach should be adopted to achieve more efficient and equitable provision, charging and financing of urban infrastructure, and that government mechanisms for the planning and co-ordination of urban development should be improved.

Consequently, the Conference resolved that the Industry Commission would be asked to examine the taxation and financial policies of governments, including pricing policies, which lead to inefficient patterns of urban

settlement in Australia. A copy of the terms of reference is attached.

CANBERRA ACT

21 November 1991

COMMONWEALTH

PA R LIA M E N T A R Y l i b r a r y MtCAH

TAXATION AND FINANCIAL POLICY IMPACTS ON URBAN SETTLEMENT

I , JOHN CHARLES KERIN, in pursuance of my powers under Section 7 of the Industry Commission Act 1989, hereby:

1. refer the taxation and financial policies of governments, including pricing and charging policies, which lead to inefficient patterns of urban settlement in Australia for inquiry and report within fifteen months of the date of receipt of this reference;

2. specify that the Commission identify and assess the impacts of those taxation and financial policies of State, Territory and local governments and of the Commonwealth Government, which directly or indirectly reduce the efficiency of land

use in urban areas, including use for housing;

3. request that the Commission make recommendations on courses of action available to governments to ensure that financial and taxation policies promote more efficient patterns of urban land use in Australia, including, where appropriate, containment of the outward growth of cities;

4. specify that the Commission is to take account of economic,

social and environmental objectives of governments affecting urban planning and development and also take account of recent substantive studies undertaken elsewhere;

5. request that the Commission give particular consideration to the options for revision of pricing and charging policies to reflect the full capital and recurrent cost of new and replacement infrastructure including the following factors and their inter-relationships:

(a) costs of providing physical infrastructure; (b) costs of providing social services infrastructure; (c) costs which fall on third parties (eg increased pollution, congestion and private transport costs);

6. specify that in reporting on these measures, the Commission should identify and assess the impact of differences in current pricing and charging policies and rates of cost recovery, including implications for the provision of

infrastructure in particular States/Territories and capitals, and issues relating to subsidies which have been provided by the Commonwealth;

7. request that the Commission report on options to change

pricing and charging policies to improve efficient utilisation of existing infrastructure;

8. request that the Commission report on the implications of the tax and financial policies of governments on the private provision of infrastructure at household level; and

9. request that the Commission report on and assess the direct

and indirect negative equity impacts of current and proposed pricing and charging policies, particularly on housing affordability. The Commission is requested to provide options for consideration by governments to address such

identifiable equity impacts.

John Kerin 2 1 NOV 1331