Households and businesses might be forced to pay rates at an "unsustainable" level if the government keeps forging ahead with a 20-year plan to eliminate stamp duty, a parliamentary inquiry has warned.
The government should release its plans for the last stage of the tax overhaul project, due to be completed in 2032, the budget estimates inquiry said.
"The committee is concerned that general rates may be increased to an unsustainable level by the end of the tax reform program, in order to make up the shortfall from reduced conveyances duties," the inquiry's report said.
"The committee would like to see the forward plan for the final quarter of the tax reform program, which includes key dates, targets and revenue estimates to 2032."
An independent review of the budget commissioned by the Legislative Assembly's select estimates committee had earlier said dramatic changes to general rates and stamp duty would be needed if the ACT still wanted to meet its 20-year commitment to phase out conveyance duties.
"Unless the ACT government is going to announce some dramatic changes in forthcoming budgets in relation to both conveyance duties and general rates, then it is extremely unlikely the ACT government will meet its original deadline of eliminating conveyance duties following 20 years of tax reform," the Pegasus Economics report said.
The report said conveyance duty revenue would still be about 10 per cent of the ACT government's own-source revenue in 2029-30, with only two years left in the original 20-year timetable to overhaul the tax system.
The average residential rates bill, excluding levies, has increased by 21.9 per cent from 2021-22 to 2026-27. Wages have grown less than 19 per cent in the same period in the ACT.
Treasurer Chris Steel had defended the long-term tax system changes and said abolishing stamp duty for first home buyers, pensioners and people buying new unit-titled properties was a significant achievement.
"We have also made the commitment that we will continue to phase out stamp duty with changes in every budget, and we will continue to look at it in every budget to see how we can continue to reduce stamp duty," Mr Steel told a budget estimates hearing on July 21.
"And, for those who continue to pay stamp duty when they are purchasing a home, it compares very well to across the border, because we have reduced the amount of stamp duty that they pay."
Despite being pressed by Ed Cocks, the opposition's Treasury spokesman, Mr Steel would not say what date the government intended to fully abolish stamp duty, only that the government had committed to continuously phasing stamp duty out in every budget.
"We are far more resilient as a result of the change to land tax that has occurred over time, in a way that is respectful of both households and businesses," Mr Steel said.
The budget estimates committee report, released on Friday, made 62 recommendations and seven findings across a range of government responsibilities.
"The committee welcomes the inclusion of metrics detailed in this budget's fiscal plan. However, the committee remains concerned that the territory's level of interest repayments represents a clear and present risk to delivery of government services, at a time when the community is already facing cost-of-living pressures," the report said.
The committee said the government needed to clearly articulate what services were being reduced and what efficiencies were being found to reduce the number of staff working in the ACT public service.
But the committee called for more funding for areas including public housing, Legal Aid ACT, the Human Rights Commission, the Public Trustee and Guardian, the Canberra Institute of Technology, public libraries and incentives to encourage Canberrans to buy electric cars.
An ACT government spokesman said the government would prepare a full response to the report before the budget is debated.
"Yet again, an Assembly inquiry has provided a report that asks the ACT government to spend more across over 20 recommendations without a single recommendation providing a clear way to fund or support these initiatives," the spokesman said.
"The government presented a budget with a clear pathway to return the budget to balance and surplus, with a revised fiscal strategy that is being delivered upon ahead of schedule. We will continue to progress this work in this parliamentary term."
