Valuation Of Land Further Amendment Bill

About this Item
Speakers - Yeadon Mr Kim
Business - Bill, First Reading, Second Reading

VALUATION OF LAND FURTHER AMENDMENT BILL

Bill introduced and read a first time.

Second Reading

Mr YEADON (Granville - Minister for Land and Water Conservation) [10.19]: I move:

That this bill be now read a second time.

The introduction of this legislation to amend the Valuation of Land Act 1916 represents a new way of obtaining valuations for land in New South Wales. It is a significant departure from the current practice. It is all about a new way of obtaining land valuations which are necessary for statutory purposes such as the base for local government rating, State land tax and just terms compensation determinations, a new way which introduces competition in the procurement of land valuation services. This amendment bill clarifies the role of the Valuer-General. In doing so it removes the potential for conflict of interest to arise whereby the provider of land valuation services regulates the provision of those services, the so-called poacher and game keeper problem. This also enables greater independence in the process of review and ruling upon objections to land valuations by members of the public.

This amendment bill also provides for the introduction of competition in the purchase of land valuation services in a manner consistent with the Government's service competition policy and enables the State to comply with the national
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competition policy reforms agreed to by the Council of Australian Governments. The exposure of the statutory monopoly valuation activities of the Valuer-General's Office to competition will promote efficiency in the delivery of valuation services and ensure that the required valuations are provided in a manner consistent with industry best practice at minimum cost. Cost savings achieved through competition will reduce the subsidy required from the Consolidated Fund to support the Valuer-General and may be transferred in lower charges to local government and ultimately to ratepayers. Competition in mass valuation services also allows local government to participate in the selection of valuation service providers and removes the need for price regulation through the Independent Pricing and Regulatory Tribunal.

To give effect to these reforms the Government will, upon assent to the legislation, separate the regulatory and commercial activities currently provided by the Valuer-General's Office. The separation is to be achieved by establishing the State Valuation Office within the Department of Land and Water Conservation to undertake commercial mass valuation activities. The regulatory functions will continue to be performed by the Valuer-General, who will report directly to the Minister for Land and Water Conservation. Further, commencing with the 1997 valuation cycle, competition will progressively be introduced in the purchase of mass valuation services for the Sydney, Wollongong and Newcastle metropolitan areas through an open tender process.

Competition has been confined to these regions as it is anticipated that a contestable market for the provision of mass valuation services might already exist in the Sydney, Newcastle and Wollongong metropolitan areas. There are, however, legitimate concerns about introducing competition to mass valuation services in country areas. These concerns arise over the viability of regional contracts without significant price increases to councils and the Office of State Revenue, the thin nature of these valuation service markets and the complexity that would arise in relation to the probity of valuations provided by local valuers. These factors militate against contemplating the application of competition in these regions. Consequently, the State Valuation Office will continue to provide valuation services to country areas and progressively will be required to compete with the private sector for valuation contracts offered by the Valuer-General.

I shall now outline some of the key features of the amendment bill to explain how effect will be given to these reforms. The bill provides for the organisational separation of the regulatory functions from the provision of commercial valuation services. This is achieved in proposed section 4 by establishing the general role of the Valuer-General to encompass exercising functions with respect to the valuation of lands in the State, to ensure the integrity of valuations under the Act and to be the custodian of valuation rolls and lists under the Act. The regulatory and contractual role of the Valuer-General is further defined and clarified in proposed section 9, in which the functions of the Valuer-General are outlined in proposed subsections (1) and (2). They include:

(a) to establish and maintain valuation rolls and lists under this Act, and for this purpose to maintain such databases as the Valuer-General thinks appropriate,

(b) to enter valuations on such rolls, lists and databases on the basis of valuation recommendations made under this Act,

(d) to make valuations of land as required by or under this or any other Act,

(e) to deal with objections and appeals against valuations under this Act.

On behalf of the Crown, the Valuer-General may enter into contracts in connection with the exercise of the functions of the Valuer-General. In proposed section 13G provision is made for the State Valuation Office, which will comprise the valuation service capabilities formerly located within the Valuer-General's Office, to enter into contested and uncontested valuation service contracts with the Valuer-General; for the Director-General of the Department of Land and Water Conservation to enter into contracts and to do anything else on behalf of the State Valuation Office for the purposes of the Act; and for the director-general to delegate functions under the section to any public servant employed within the State Valuation Office. The general role and functions given to the Valuer-General and the provisions allowing the State Valuation Office to enter into valuation service contracts with the Valuer-General establish the organisational separation of the regulatory functions from the provision of commercial valuation services.

Proposed section 13A makes provision for the Valuer-General to negotiate and enter into contracts for the procurement of land valuation services. The section will also establish basic terms and conditions for inclusion in valuation service contracts and establishes that contract valuers are not agents of the Valuer-General, except where expressly provided for in the contract or under the Valuation of Land Act or any other Act. The basic terms and conditions of valuation contracts outlined in the proposed section include setting out the principles and methods according to which valuation services are to be carried out, incorporation of performance indicators to assist with assessing the efficiency and effectiveness of the valuation services that have been carried out, identifying the persons and their qualifications to perform certain valuation tasks, regulating the manner in which specified functions are to be exercised, imposing restrictions on the performance of specified functions, authorising contractors to exercise functions or discretions belonging to the Valuer-General, and setting out the contract valuers' obligations in assisting the Valuer-General, particularly in relation to objections and appeals.

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Proposed sections 13B and 13C specify the types of valuation contracts to be made available. They will enable the Government to stage the competitive tendering of valuation services and identify the types of persons who can submit tenders for contested valuation service contracts. Specifically, the two kinds of valuation service contracts to be made available are those to be contested through open tender and uncontested contracts offered to the State Valuation Office. The State Valuation Office may also compete for contested contracts with private sector valuers. The Minister may direct the Valuer-General to invite tenders for contested valuation service contracts in specified parts of the State and/or for specified purposes. To submit a tender for a contested valuation service contract, a contractor, or at least one of its directors or employees, must be a qualified person within the meaning of the Valuers Registration Act 1975.

Proposed section 13D allows the Valuer-General to negotiate and enter into uncontested valuation service contracts with the State Valuation Office in areas not made available to competition and for areas made available to competition for which there are no successful tenderers. Proposed sections 14A and 14B establish the relationship between the Valuer-General in performance of his regulatory responsibilities and the valuation services purchased from the contract valuers. The Valuer-General will continue to make the valuations required under the Act. Contract valuers may exercise any relevant functions or discretions that belong to the Valuer-General in formulating a recommendation in connection with a valuation. The Valuer-General may then make a valuation on the basis of a contractor's recommendation. In making a valuation, the Valuer-General is required to monitor and make general assessments of the standards of accuracy of recommendations. Further, if a contractor fails to make a recommendation or to revise it, the Valuer-General may make the valuation or valuations concerned without the need for such a recommendation.

Alternatively, the Valuer-General may enter into an uncontested valuation service contract with some other contract valuer to provide relevant recommendations. The legislation also contains provisions relating to the monitoring of contract valuers and termination of contracts. Proposed section 13E will allow the Valuer-General to terminate contracts at any time, subject only to the terms of the contract. In proposed section 13F the Valuer-General is required to monitor the standard of valuation services provided under valuation service contracts and to make assessments of the contractor's compliance with procedural and other requirements of the Act, the regulations and the relevant valuation contract. Sections 15 and 74 of the Act have been amended to extend the powers previously conferred on the Valuer-General by those sections to include contract valuers when performing their contracted valuation tasks.

The legislation also makes provision in amendments to the Valuation of Land Regulation 1996 for the Valuer-General's administration of the process for responding to objections and appeals lodged by affected parties to correspond with similar appeal provisions in other State taxation legislation. As I mentioned previously, the contracting of valuation services will be introduced progressively in the purchase of valuation services for the Sydney, Wollongong and Newcastle metropolitan areas, commencing with the 1997 valuation cycle. The progressive introduction of competition in these areas will allow the Government to test and foster the development of the market for valuation services. Further, it will allow for the impacts on the present staff of the Valuer-General's Office to be staged.

The Government's service competition policy will apply to staff affected by the competitive contracting of valuation services. This policy requires preference amongst the private sector bidders be given to those who provide employment opportunities for existing Valuer-General's Office staff, subject to satisfaction of value for money and other relevant requirements. Finally, where in future it becomes necessary for staff to be displaced to alternative activities they will be assisted according to the Government's policy on managing displaced employees. This policy is based on the premise of no forced redundancies. It provides for redeployment and voluntary redundancy of displaced employees. I commend the bill to the House.

Debate adjourned on motion by Mr D. L. Page.

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