FOR too long, the ACT Government has failed to provide adequate funding for the maintenance of roads, footpaths, public car parks and other public areas. Now, suddenly, it appears to have found its pot of gold.

It is proposing to spend $22 million on maintaining and upgrading the urban amenity of Canberra, as one of its 2012-13 Budget initiatives, by applying the money raised via the new Lease Variation Charge.

The LVC is the July 1 tax that brought into effect a massive new tax on residential housing, through the introduction of excessive charges for lease variations.

Provision of municipal services and maintenance of the public realm is what rates and land tax are supposed to cover, as everyone who benefits from it pays for it.

But the Government is attempting to spin a bad tax into something that looks like a community benefit, when in fact the community is the one carrying the cost for the new tax through less-affordable housing.

With this new announcement, the Government is also playing wedge politics by attempting to directly link the LVC to a program they will try to sell to the community as a “must-have”. That means anyone attacking the LVC will be linked with attacking this new fund.

In making the announcement, the Government also inferred that the property sector had been profiteering, with ACT Treasurer, Andrew Barr, saying: “It is only right that the money received from developers – who are profiting from Canberra’s livability – is put directly back into the community.”

Amid the political spin, Mr Barr seems conveniently to have forgotten that the Canberra property sector is the ACT Government’s cash cow, with more than 50 per cent of tax revenue coming from property.

One of the myths that the Government continues to perpetuate to justify these massive cost increases on redevelopment, is that developers have been making mega-profits at the expense of the community, and that the community has consequently been missing out.

However, the LVC does not affect developers’ profits, because banks and financiers won’t allow this to happen. In reality, where lease variations are higher, the amount a developer can pay to landowners goes down, so the community is in fact the loser.

Catherine Carter is ACT executive director of the Property Council of Australia