The ACT border should be moved to encompass the NSW side of the cross-border Ginninderry development, says Chief Minister Andrew Barr.
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Meanwhile, development director David Maxwell confirmed NSW-side residents would be expected to pay NSW stamp duty if the border stayed put.
A recently released proposal document said they would pay ACT-level rates on top of a $100 charge per household to fund a conservation trust of a nearby river valley.
Mr Barr said during question time in the Legislative Assembly on Wednesday the border move was not an "immediate concern" but it was "the most sensible outcome".
"I think it's fundamental that the border move," Mr Barr said.
The cross-border development in Canberra's west is expected to create 11,500 new homes, with 5000 of them planned for the NSW side of the development, dubbed Parkwood.
Yass Valley Council and Riverview - a joint venture between the ACT government and developers that will oversee the Ginninderry development - released their proposal for Parkwood for public consultation last week.
A spokeswoman for Mr Barr said the ACT government would be making a submission to the council on the proposal.
The joing proposal said Parkwood residents would be expected to pay ACT-style rates and be part of a legal "buffer zone" where ACT law would be enforced, but residents would vote in NSW state and Yass Valley council elections.
Yass Valley Council would be expected to contract out the majority of services to the ACT under the proposal, including waste collection and emergency services.
In the Assembly, Greens MLA Caroline Le Couteur asked if Parkwood residents would also pay NSW stamp duty.
Mr Barr said the question was hypothetical and not an urgent issue, but should be considered in the future when the development is closer to completion by 2030.
When contacted on Wednesday, Riverview director Mr Maxwell said Parkwood residents would be expected to pay NSW stamp duty because they were NSW residents.
Mr Barr said the border move was an ongoing discussion between the ACT, NSW and federal governments as well as Yass Valley Council.
Ms Le Couteur also asked Mr Barr if the proposed workings of Parkwood amounted to "a proposal for taxation without representation".
In response, Mr Barr reiterated there would be no residents in Parkwood until 2030.
"There is a lot of time to resolve this issue," Mr Barr said.
Labor MLA Bec Cody asked what services ACT rates would cover that would be unavailable to NSW residents.
"The two are not comparable. Clearly the remit of local government in NSW is much narrower," Mr Barr said.
Mr Barr, also the capital's Treasurer, said ACT rates also paid for more than what council rates would cover including health, education, emergency services and Canberra's tourism development.
The only crossover was in waste collection and some planning services.
"This is one of the complexities in any cross-border arrangement," Mr Barr said.
Mr Maxwell suggested Yass Valley Council could establish a service depot in Parkwood from which it could run relevant council services or subcontract them out.
He said Riverview's proposal could be seen as a future model for similar developments across the Canberra region, which he said would reach one million residents by 2033.
"There are more efficient ways of doing it (providing council services) and this is an opportunity to have a pilot policy project area," Mr Maxwell said.
