Option 1 status quo – Efficiency Though initially designed principals of cost recovery, the status quo schedule of fees is outdated and does not accurately reflect costs. This schedule of fees would approximately $25 million of costs from users of the Victorian land registration system. This represents a situation where these users are cross subsidising the general taxpayer. Over-recovery of costs is scored negatively under the efficiency criteria as the excessively high fees send incorrect price signals to users of Land Victoria’s services. However, given that under the base case there are no prices signals at all, Option 1 is still considered to be more efficient than the base case. On this basis, efficiency is scored at +2.5 under this option relative to the base case. Equity From a vertical equity perspective, Option 1 does not have any specific features whereby with greater means might contribute proportionately more than those with lesser means. Nonetheless, when compared with the base case, Option 1 is considered to be more vertically equitable as users of Land Victoria’s services (i.e. those transacting and subdividing land) have a greater capacity to pay for those services than the general taxpayer, which includes individuals on low incomes. On this basis, equity is scored at +5 under this option relative to the base case. Effectiveness From a general perspective, the status quo option is considered to be more effective than the base case as it involves charging fees to collect revenue to the cost of providing the relevant Land Victoria services, rather than charging no fees at all and relying on an alternative, less efficient, funding source. However, this option also involves a high level of over-recovery of costs and is therefore ineffective to a certain extent. On this basis, effectiveness is scored at +2.5 under this option relative to the base case. Calculation of scores the scores assigned for the assessment criteria in each section above and the weightings discussed in Section 4.1, the weighted scores for Option 1 are calculated in Table 4.3. Cost recovery fees assessment of Option 1 against criteria – Criterion Score Weighting (%) Weighted Efficiency 2.5 33 0.83 Equity 5.0 33 1.67 Effectiveness 2.5 33 0.83 Total 3.33
Option 1 – status quo Efficiency Though initially designed principals of cost recovery, the status quo schedule of fees is outdated and does not accurately reflect costs. This schedule of fees would approximately $25 million of costs from users of the Victorian land registration system. This represents a situation where these users are cross subsidising the general taxpayer. Over-recovery of costs is scored negatively under the efficiency criteria as the excessively high fees send incorrect price signals to users of Land Victoria’s services. However, given that under the base case there are no prices signals at all, Option 1 is still considered to be more efficient than the base case. On this basis, efficiency is scored at +2.5 under this option relative to the base case. Equity From a vertical equity perspective, Option 1 does not have any specific features whereby with greater means might contribute proportionately more than those with lesser means. Nonetheless, when compared with the base case, Option 1 is considered to be more vertically equitable as users of Land Victoria’s services (i.e. those transacting and subdividing land) have a greater capacity to pay for those services than the general taxpayer, which includes individuals on low incomes. On this basis, equity is scored at +5 under this option relative to the base case. Effectiveness From a general perspective, the status quo option is considered to be more effective than the base case as it involves charging fees to collect revenue to the cost of providing the relevant Land Victoria services, rather than charging no fees at all and relying on an alternative, less efficient, funding source. However, this option also involves a high level of over-recovery of costs and is therefore ineffective to a certain extent. On this basis, effectiveness is scored at +2.5 under this option relative to the base case. Calculation of scores the scores assigned for the assessment criteria in each section above and the weightings discussed in Section 4.1, the weighted scores for Option 1 are calculated in Table 4.3. Cost recovery fees – assessment of Option 1 against criteria Criterion Score Weighting (%) Weighted Efficiency 2.5 33 0.83 Equity 5.0 33 1.67 Effectiveness 2.5 33 0.83 Total 3.33
Transfer-of-Land-Fees-Regulations-2015-and-Subdivision-Registrars-Fees-Regulations-2015.docx