The Canberra Liberals' plan to cap rates would cost the ACT's budget bottom line nearly $100 million more than the party expected, an independent Treasury costing has found.
The costing comes after a campaign dominated by sharp debate over the price of promises made on both sides, with Labor having had to wind back claims the Liberals' policies would significantly reduce government revenue.
While the Liberals' forecasts on rates caps were lower than Treasury's estimates, the election costing process found the opposition's payroll tax cuts would cost 40 per cent less than expected.
The Liberals said the costings showed its payroll tax cuts and rates caps would be about $200 million, which was what the party had estimated the combined cost of the commitments to be.
The policy would also deliver "much needed cost-of-living relief and ensure Canberrans are paying on average between $1500 and $2000 less in rates than what they will under Andrew Barr".
"With the limited resources the opposition has, the Canberra Liberals followed the process and submitted our policies for costings and have been upfront and transparent with the community about what they will cost," Opposition Leader Elizabeth Lee said on Friday.
The Liberals have promised to implement a 2.2 per cent annual cap on residential and commercial rate rises, with Opposition Leader Elizabeth Lee saying Canberra households would be nearly $2000 better off on average over the next four years.
The 2.2 per cent proposal from the Liberals would apply to all household and commercial ratepayers. This cap is based on the 10-year average of the wage price index.
The party requested a costing for the policy on October 11, saying it would cost $77.04 million in foregone revenue over three years after the new cap was introduced in 2025-26.
But Treasury said the policy would cost $172.3 million over three years in foregone revenue for the ACT budget. The figure is significantly lower than Labor's $400 million estimate of the policy's cost.
"Treasury's costing is consistent with the general rates revenue forecasting methodology. The base 2024-25 revenue is increased in line with changes in average general rates for existing properties and additions to the property stock base," Treasury said.
"The costing assumes an increase in average general rates of 2.2 per cent in 2025-26 and thereafter, before a cap of 2.2 per cent is applied."
Treasury's costing was based on a two-step implementation, where average general rates would rise by 2.2 per cent and then a 2.2 per cent cap would apply to individual properties.
"This would typically result in a final increase in average rates of less than 2.2 per cent," Treasury said.
The Liberals have also promised to establish an independent valuation office to calculate the value of unimproved blocks in the capital.
"Rates will always be lower under a Canberra Liberals government. We will provide certainty with a 2.2 per cent cap on rate increases in the first term, and we will be transparent with how rates are calculated with the establishment of an independent valuer," Ms Lee said in June when she announced the policy.
The Liberals' costing request said the proposal had been costed by a third party but this proposal was not public.
Treasury said the costing was sensitive to the distribution of average unimproved values for properties in future years, meaning the difference between the most expensive and least expensive residential land values.
"A wide distribution results in more properties with increases in general rates significantly below average, extending below the proposals cap of 2.2 per cent, and results in a lower increase in average rates under the proposal. Treasury's costings are based on the currently available expected distribution of AUV changes in 2025-26," the costing said.
Treasury said the policy would cost $24.7 million in 2025-26, $56.5 million in 2026-27 and $91.1 million in 2027-28.
Disagreements over costings have featured heavily through the ACT election campaign, with Labor having to back track on high costing claims after the Liberals clarified how their policies would work.
The Canberra Liberals have accused Labor of failing to have their "signature" policy of employing 800 extra healthcare workers costed. Labor said the policy was partially funded in the most recent budget and had been spread across other costing requests.
Ms Lee on Friday accused Mr Barr of lying about the cost of the policies and said: "Andrew Barr is still refusing to cost his 800 health workers policy - announced in May this year - and his trades policy which combined will cost Canberrans almost $1 billion.
"He's also been caught out by the Electoral Commissioner for his misleading political advertising. Canberrans cannot trust anything that comes out of Andrew Barr's mouth."
The staff would cost "hundreds of millions of dollars" over five budgets, a Labor spokeswoman said.
The Liberals have also sharply criticised Chief Minister Andrew Barr for claiming their payroll tax cuts, combined with their rates caps, would cost the budget $1 billion over four years. Ms Lee described the figure as "absurd".
Labor wound back the $1 billion claim after more detail about how the Liberals intended the policy to work was made public, but Chief Minister Andrew Barr warned the tax policy would be a disincentive to business growth.
The Liberals expected their payroll tax cut for businesses with annual wages between $2 million and $5 million would $80 million over four years. Treasury found the policy would cost just $48 million over four years.
The ACT is more than halfway through a 20-year program to phase out stamp duty and replace the lost taxes with revenue from residential rates.
This program is split into four phases, in the current stage residential rates rise by an average of 3.75 per cent a year. Under the current plan this is expected to stay in place for another year.
But the 3.75 per cent average is not applied to individual's rates bills. Some households are expected to receive up to a 9 per cent hike in their annual rates the most recent budget shows.
The Canberra Liberals also plan to abolish stamp duty but Ms Lee has indicated the party may not stick to the current phase out timetable. It is currently expected to be completely scrapped by 2032.
