ACT government slashes health levy to $100 as part of budget deal with Greens
The levy was unveiled in the ACT budget last week and was to be attached to rates notices every year until 2029-30, bringing in an extra $205 million over four years to help pay for health services.
But the ACT Greens said they wouldn't support what the party called an "unfair and regressive tax".
After days of negotiations, the levy has now been reduced to $100 for residential and rural property owners, but will remain at $250 for commercial properties.
Treasurer Chris Steel said the agreement followed constructive discussions with the ACT Greens about revenue measures in the 2025-26 budget.
"The levy will raise necessary revenue to fund record investment in Canberra's public health system, which now accounts for more than 33 per cent of the ACT Budget," Mr Steel said.
The revised levy has only been agreed to for one year, and will be reviewed annually.
To offset the lower levy, Mr Steel said the government would introduce a higher payroll tax rate of 8.75 per cent for large businesses with national payrolls exceeding $150 million. The new rate is expected to come into effect from January 1.
"This outcome reflects the government's commitment to working collaboratively to ensure vital services are funded responsibly, without the need for deep cuts to public services or infrastructure investment," he said.
ACT Greens leader Shane Rattenbury said his party could not support the levy in its original form.
"Through these negotiations we recognise it is vital for government to raise the revenue that is needed to pay for key community services in this territory," Mr Rattenbury said.
He said the flat levy was unfair but there had been "significant pressure" to reach an agreement quickly, with the rates determination having to be signed off by midnight on June 30.
"There needed to be a decision today to enable the government to put that determination in place in the legislative time frames, and so we've had to work quite quickly," Mr Rattenbury said.
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The City Plan forecasts that the West End, including areas around Grote Street, West Terrace and Whitmore Square, can accommodate more than a third of the population growth needed to reach 50,000 residents. But other areas like North Adelaide, North Terrace and the East End are earmarked for much less growth, partly due to their high-level of heritage protection. "To get to 50,000, we don't want to destroy the city," Dr Lomax-Smith said. "It would be easy if we just demolished every building in the city and built tower blocks — 50 tower blocks, easy, get to 50,000 — but they would probably be mainly single-person units, and it would damage the character of our city. "One of the most important things is to protect the quality of life." Finding space for 50,000 residents is one thing — getting them to live in a city is another. "Australians on the whole have not been used to living in a house without a garden and off-street parking," Dr Lomax-Smith said. In the decades after Charles Reade lectured Adelaide about its slums, families flocked to the suburbs in search of more space. From 1947 to 1972, the city's population dropped from about 35,000 to 14,000, according to the council's archives. "Everyone was concentrated on building a house on a quarter-acre block and having their own place to live with their families," said Professor Emma Baker, director of the Australian Centre for Housing Research at the University of Adelaide. "So, there was kind of a gutting out of the city over those years, and it probably reached the kind of peak in the 1980s." While the CBD's population is growing again, it is more to do with migration and international students than suburban families attracted to city living. Most City of Adelaide residents either live on their own (40.8 per cent) or with their partner (25.6 per cent), according to the 2021 census. Just 8 per cent of city households — 970 in total — are couples with children. "The city has become a place where young people live maybe temporarily while they're studying," Ms Baker said. "About a quarter of the people who sleep in the city every night are students, so that's roughly the same proportion that Cambridge has. "So, we're a student city, we're a rental city, and people tend to … move into the city, live there for a while and move out later on as they get older." It's a vastly different picture than the early 20th century when big families lived in small city houses, or "slums". The average size of an Australian household in 1911 was 4.5 people; it is now just 1.7 in the City of Adelaide. Planning Institute of SA president Cate Hart said without families in the city, "what the city council is trying to strive for won't occur". "Single bed apartments to meet a student demand is not going to reach your 50,000 people," she said. "You actually need to build development that will accommodate three and four people per household." Ms Hart, who supports the council's plan, argues the public and private sector need to drive a "culture of living in the city" through good design and a diversity of housing. "Apartment living is not for everybody, and cookie cutter apartments will not drive a new culture," she said, adding that the city would need townhouses, "shop top living" and mid-rise development. The council will need help from the private sector to reach its target, but pulling off a major housing project within the CBD is not always easy. "It's not enough to just zone an area and think 'job done'," said Planning Minister Nick Champion. "Because the nature of private development is it comes in fits and starts, they have to get feasibility and capital, and they have to struggle against construction costs which are quite high at the moment." Further complicating matters is that the City of Adelaide is not the only local government area with housing growth on the horizon. The whole of Greater Adelaide will need another 315,000 houses by 2051, according to the state government's 30 Year Plan released last year. Around a third of this growth is earmarked for the sprawling northern suburbs. Jamie McClurg, executive chair of a real estate developer, said the suburbs are "typically a safer investment" for developers. "Certainly, those sort of markets are easier to produce and deliver stock," he said. It comes as his company nears completion on a major mixed-use apartment development on the former North Adelaide Le Cornu site. The land stood vacant for more than 30 years after various development plans fell over. "There's available land that can be just developed on straight away — it tends to be caught up in a lot of conversations and not probably enough action to my mind," Mr McClurg said. He is sceptical that the 50,000 population target will be reached. "I think that we have seen through the last couple of decade people set targets and not be responsible for achieving them," he said. "I just would expect the people that are leading us to understand the math that they're committing to and deliver on it."
