Dr. Miche?l Collins:

It is an interesting issue to raise. I think that a site value tax is the way to go if one could do it. There are, however, significant challenges for doing that for residential property. The previous commission did look at that aspect and ruled it out for that reason. My read of the commission's work is that it was a pragmatic response to say that the LPT is there and we should keep it. In fairness to the commission, and it is something I have also said, it is important that the tax is frequently rebased and that the yield increases over time. Otherwise, it is not sustainable and it will wither away. There are good examples. We came very close to that and maybe we are still quite close to that with the local property tax: in relative terms, it brings in a small amount of resources. It would be easy in a budget to abolish it, to be very honest, given how small the resources are. Were that to happen it would be detrimental to local government. I emphasise the need for that to increase over time.

We also should not miss the point that the commercial rates system in this country is broken. It does not work and is not sustainable. In fact, that has withered on the vine for decades. We can see all sorts of problems and inequities as we move around the country from local area to local area in the structure of that. It is not really feasible for this to continue into the future. The commission's pointing towards the site value tax is sensible in that regard, in that it would then be one system that operated across the country. There may be some local authority deviation, and there is some merit in that, but it would bring much greater stability to that important area of funding as well. It is a move in the right direction. I would hate to see the LPT go now that we have it there, because I am very concerned that if it went it may never come back at all, or any version of it.