The NSW government has been challenged by one of its own backbenchers to change the state's statutory land valuation system.
Matt Kean, the youngest member of parliament and, prior to his election last year an audit manager at PricewaterhouseCoopers, chairs the parliamentary committee on the Office of the Valuer General.
He said NSW needed to review both the governance structure of the Valuer General and the Valuation of Land Act. "I want to see a system that is fair and equitable, and understandable by the people affected."
Mr Kean said he had deep concerns about the exposure of the state government to litigation; about the way the NSW economy had been affected by the land valuation system; and about unjust compensation paid on compulsory acquisitions.
The Minister for Finance and Services, Greg Pearce, said the government had noted the hearings of the Valuer-General committee to date.
"The government will await the full findings of the committee and consider any report or recommendations in due course," he said.
The NSW president of the Australian Property Institute,
Robert Dupont, said NSW had
a pretty good valuation system. "Since it was overhauled and refined around six years ago, it now ranks as one of the better systems in the world for mass appraisal valuations," he said.
"There is a fair degree of independence there. Any mass appraisal system will always have holes in it."
This week, the Valuer General, Philip Western, was grilled by the parliamentary committee about those holes in the system and about his independence.
Mr Western oversees the valuation of 2.4 million lots a year.
He told the committee that objections are lodged on around 0.5 per cent of valuations issued and about half of those result in changed valuations.
One member of the committee, the Labor member for Cessnock, Clayton Barr, asked about the changes.
"How do we get a property worth $22.5 million that is worth $1 [million]? How do we get a $30 million property now valued at $10 million? How do we get it that wrong?" he asked.
Mr Western said that in a lot of those cases, more information, such as the degree of contamination, had become available.
In other cases, the legal system took over. "Often, when valuations go to court . . . there can be some decisions made from a valuation perspective which do not quite weigh up," he said.
Read the full article in the Australian Financial Review here.
