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Legislative Council - Fifty-Fourth Parliament, Second Session (54-2)
2021-03-17 Daily Xml
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Motions

Office of the Valuer-General

The Hon. J.A. DARLEY (15:56): I move:

1. That a select committee of the Legislative Council be established to inquire into and report on—

(a) the scope of operations of the Office of the Valuer-General in respect of state government and local government valuations for property taxation purposes;

(b) the scope of operations of the Valuer-General in respect of valuations for stamp duty, acquisition, disposal and other purposes required by government;

(c) the extent of compliance by the Valuer-General in respect of the Valuation of Land Act 1971 (SA);

(d) the extent of knowledge required by the Valuer-General to satisfy the legislative requirements of the various rating authorities;

(e) the standard of policy formulation and direction by the Valuer-General provided to Land Services SA to satisfy their contractual obligations with the SA government;

(f) the relationship between the Valuer-General's revaluation initiative of all properties in South Australia as announced in the 2016-17 state budget and the general valuation of all properties in the state which occurs each year;

(g) the effectiveness of the decision to privatise the valuation services of the state from 2016-17, including productivity gains/losses as a result of the privatisation;

(h) the efficiency in the process of objections to valuations and appeals to the South Australian Civil and Administrative Tribunal; and

(i) any other relevant matter.

2. That standing order 389 be so far suspended as to enable the chairperson of the committee to have a deliberative vote only.

3. That during the period of any declaration of a major emergency made under section 23 of the Emergency Management Act 2004, or any declaration of a public health emergency made under section 87 of the South Australian Public Health Act 2011, members of the committee may participate in the proceedings by way of telephone or videoconference, or other electronic means, and shall be deemed to be present and counted for purposes of a quorum, subject to such means of participation remaining effective and not disadvantaging any member.

4. That this council permits the select committee to authorise the disclosure or publication, as it sees fit, of any evidence or documents presented to the committee prior to such evidence being presented to the council.

5. That standing order 396 be suspended to enable strangers to be admitted when the select committee is examining witnesses unless the committee otherwise resolves, but they shall be excluded when the committee is deliberating.

I move this motion today following concerns expressed to me by members of the public and my own experience with the Office of the Valuer-General about services provided by that office that have deteriorated significantly over the last five years, and more particularly over the most recent two years. Briefly, I intend to outline some of these issues.

In July 2015, the Valuer-General made a poor policy decision in respect of the valuations and recording of living units within about 250 retirement villages in South Australia, which resulted in an increase in water and sewerage rates in the order of 770 per cent. Whilst attempts were made to convince the Valuer-General of the problem caused by their decision, the matter was finally corrected following a recommendation of a joint select committee inquiry to reverse the Valuer-General's decision, which was commissioned by the government in 2019 and is due to be implemented as from 1 July 2021.

In 2016-17, the Valuer-General embarked on a revaluation initiative, which was described in the 2016-17 budget papers as a rolling five-yearly revaluation of the state. It included updating valuations of industrial and commercial properties that had not been updated properly for approximately 16 years. According to the then Valuer-General, the first phase of the plan was delayed in year one due to the commercialisation of the rating and taxing valuations, otherwise known as the sale of the lands titles office and valuations to Land Services SA.

Year two of the plan was completed, with valuations in the local government areas of Unley, Walkerville and Adelaide Plains. Valuation increases in the commercial areas of Unley increased by up to 166 per cent over the previous valuations. The remaining areas of the state were deferred a number of times and will be completed by 30 June 2021, with effect for rating purposes from the 2021-22 financial year.

In 2014, the then Valuer-General implemented a valuation policy that gave a valuation concession to large-scale dryland farming properties in the peri-urban areas of the state that had been severely impacted by the development of housing, commercial properties and vineyards immediately adjacent to their dryland farming properties. In November 2020, the Valuer-General revised the policy, which reversed the original policy and gave the benefit to housing, commercial and vineyards. Complaints were raised with the Valuer-General from the agricultural sector, which resulted in the Valuer-General offering a solution to the problem that was completely impractical.

Back in 1981, the then Liberal government amended the Valuation of Land Act to allow for actual use valuations in South Australia. This provision included the principal place of residence of an owner and land used for the business of primary production and required the Valuer-General to disregard any potential this land had for subdivision or some higher use other than what the land was currently used for.

The current Valuer-General revised the implementation policy associated with actual use valuations in 2019 and introduced new interpretations of the provision of the act that were never intended and had, and are having, an adverse impact on the valuations of land for which the legislation was intended initially. The revised policy now provides erroneous direction to the private sector consortium Land Services SA, which is under contractual arrangements to provide valuations for rating and taxing purposes to the Valuer-General.

In respect of the matter of objections to the Valuer-General's valuations, the Valuer-General has been advising owners that the processing of objections will take about 12 weeks to finalise. The Valuer-General advises that the processing time will now take six weeks, bearing in mind that recent experience has shown that, if an owner objects to their valuation, it takes three weeks for the objection paper to proceed from the Office of the Valuer-General to Land Services SA, which is resident in the same building.

The Valuer-General advised the Budget and Finance Committee of parliament that their target for rating and taxing valuations was 90 per cent of current market based on current market sales evidence or adjusted asking price evidence. In South Australia, the Valuer-General reviews approximately 900,000 valuations each year. Most properties are not inspected, other than those that have recently been sold or are on the market for sale.

The court in the matter of Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of SA Ltd held that, where valuations are made for revenue purposes, any doubt should be resolved on a conservative basis, as opposed to acquisition purposes, which should be resolved using a more liberal approach. However, in practice there is evidence to show that the Valuer-General's valuations are often way above 90 per cent of current market sales evidence and in some cases over 100 per cent. Similarly, when valuations are contested in SACAT, the Valuer-General defends valuations using gross actual sales evidence where the original target is set at 90 per cent of current sales evidence.

These examples above are reasons for moving for a select committee of inquiry so that, at the end of the day, South Australians can be assured that the Office of the Valuer-General operates consistently and in an effective manner. I urge all members to support the motion.

Debate adjourned on motion of Hon. I.K. Hunter.

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