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Legislative Assembly for the ACT: 2000 Week 5 Hansard (11 May) . . Page.. 1459..


MR SMYTH (continuing):

context of documents when you lash out in this way. You speak of censorship. You were caught out by David Gower. You have now been caught out by the fact that you have not quoted the entire document.

Federal Budget

MR HIRD: Mr Speaker, my question is to the Treasurer, Mr Humphries. Minister, I noticed in this chamber this morning that Mr Stanhope was questioning your assessment that the tax reform package and the cancellation of the East Timor levy would benefit ACT taxpayers by $150 million. Can you tell the parliament whether this figure is accurate?

MR HUMPHRIES: Mr Speaker, in the heat of the federal budget, obviously fully accurate economic modelling is very difficult to do. It is often very difficult to get that done entirely accurately. I have to advise that the assessment undertaken by my department is somewhat inaccurate. I have not taken the issue up with my department and asked how it could be that they have arrived at an inaccurate figure, but I will take it up with my department in due course. I have asked them to explain how their work was actually done to reach a figure for the total of the effect of the federal government's package on the ACT and I will set out the calculations that they have used and try to give a net figure to the Assembly so that it can see the total picture.

The income tax cuts themselves are worth in the order of $235 million to the ACT next year. That figure has been derived from the taxation statistics published by the Australian Taxation Office. These statistics give a detailed taxpayer profile which can also be used to estimate the ACT's share of the Timor levy, which my department has estimated would have taken another $22 million from ACT taxpayers. As members know, Tuesday's budget effectively gave that back.

There are also indirect tax issues, Mr Speaker. The benefits of the abolition of the wholesale sales tax will be offset to a small extent by the introduction of the wine equalisation tax and the luxury car tax. The incidence of these taxes is much harder to calculate, but they gradually fall more heavily on higher income earners who buy the luxury goods which are subject to wholesale sales tax. The net effect of the abolition of wholesale sales tax offset by the wine equalisation tax and the luxury car tax will put an estimated $356 million back into the pockets of ACT taxpayers. On this basis, the gross benefit of the tax deductions for the ACT will be around $613 million.

Offsetting that is the goods and services tax. Based on the ACT's share of total household spending, the GST will collect an estimated $440 million in the ACT. Mr Speaker, the figure I gave the house yesterday was wrong. The net benefit to the ACT is not $150 million; in fact, the net benefit to the ACT is $172 million. I do apologise for misleading the house on that matter, Mr Speaker. I will have another motion of censure against me for having misled the house, I am sure; but I am sorry. My department tells me that they tend to estimate things conservatively and that is the basis on which the figure was rounded down to $150 million, but $172 million is the figure, and that is how it has been calculated.

Mr Stanhope might dispute the accuracy of the figure, but I am not sure that Mr Quinlan, his deputy, would. He issued a media statement on 23 September 1998 which reads:


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