In March 2008 the Queensland Government rammed through amendments to the Valuation of Land Act via a “guillotine” debate. This was supposedly in response to a Land Court ruling involving the Chermside shopping centre. DERM had been adopting an aggressive interpretation of the Act essentially utilising a “top down” methodology by deducting the value of improvements from the total “market” value of the property to arrive at a land value. They were copping a hiding at the Courts.
So, despite further Appeals still before the Courts, the rules of the game were manipulated before full-time to influence the outcome. To achieve that, the amendments were made retrospective. The Land Appeal Court subsequently noted : … “the Amendments appear to be targeted at altering the outcome of this appeal” … “it seems clear that Parliament intended to remove from the appellants any rights they might have had” … “The Court is not aware of any previous examples of legislative amendment targeted at specific tax payers in Queensland”.
There were howls of concern at the time from across the property industry as to the implications of the new amendments on the other property sectors. That fell on deaf ears.
The then Minister stated in Parliament “With the exception of the prescribed 30 large regional shopping centres, this bill does not propose to change the current practice of valuing highly developed properties. Let me make this crystal clear for members of the opposition: this bill does not propose to change the current practice of valuing highly developed properties.” Mind you, it’s no longer an offence to lie to the Queensland Parliament.
It seems that the worst fears are now being realised. At a recent Court facilitated conference DERM openly threatened to review 2007 valuations of major industry sites, applying the subsequent yet retrospective amendments, if the owners continued to proceed with the existing Appeals. This would have probably led to assessments 3 to 4 times higher than those already issued. It’s tantamount to the thuggery and stand-over tactics of a school-yard bully.
The audacity and belligerence of the Government and DERM should underline for all concerned the determination they have to target major business and industry. DERM now have a new weapon with multiple warheads. The fallout of a strike should not be underestimated.
According to DERM, the amendments may permit the inclusion of external infrastructure services such as road, rail, electricity, pipelines etc and feasibility studies, planning and environmental approvals, licences, permits etc. Notwithstanding there is much debate to be had about the “added value” of such items, it is clear that highly developed properties in particular will experience massive increases in unimproved land valuations, in spite of the “real” market dropping. Sectors in the firing line include tourism and hospitality, mining and minerals processing, petroleum, aviation, ports, specialised agriculture and any major enterprise that requires substantial pre-planning and/or specialised services.