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Legislative Assembly for the ACT: 2006 Week 10 Hansard (Wednesday, 18 October 2006) . . Page.. 3205 ..

advice that comes to me and presumably to the Chief Minister is that if it is not allocated for water resource management there may be a problem with its legality. This Liberal opposition does not oppose the water abstraction charge but it is very cautious about the way this government spends it.

MR MULCAHY (Molonglo) (11.55), in reply: Mr Speaker, I am thrilled that Mr Barr is back in the chamber, because at least we will now have somebody on the other side who understands a little about economics and has some economic literacy. Before the minister came into the chamber, Mr Seselja was referring to the concept that there is no gain whatsoever from tax reform and tax reductions. Of course, Mr Seselja refuted this very quickly by citing the wonderful company taxation reforms the Howard government has initiated. The Howard government was able to reduce tax levels and, in fact, generate an increase in revenues, because suddenly some of the mechanisms available to people were no longer attractive.

I was reminded by Mrs Dunne about how the Thatcher government in the UK some years ago decided to reduce the exorbitant personal income tax rates of 80 to 90 per cent. As a consequence of those reforms, a whole lot of money that had been parked in all sorts of islands and places around the globe came back into the UK because the income tax rates no longer became such a burden on people trying to generate income in the UK. In fact, the UK economy gained from those tax reforms. The Chief Minister trots out in this place the simplistic notion that if you lower land tax you will lose money and all the hospitals will fall over. I do not think I would even say this is economics 101. I do not think he would get a grading for such a simplistic analysis of what the opposition is putting forward.

I was delighted to hear Dr Foskey’s comments. Dr Foskey and I may be not perceived as being of an identical ideological view in most matters; there is a smidgen of difference on one or two matters. However, I was concerned to hear that my staff were cheering when she spoke. I hope that does not amount to disorderly conduct upstairs, Mr Speaker—I will have to urge them to be restrained. But Dr Foskey saw through the Chief Minister’s rant, to use Mrs Dunne’s terminology, because she realised that he was wanting to reconstruct what I am putting forward here today, what the opposition is advocating, and in fact not tackle the issue.

We have identified a serious issue. What is happening is hurting a lot of people, and not just the people Mr Seselja spoke about who might be forced to sleep outdoors. I have spoken briefly on that issue before in this house. Certainly, a couple of members of this side of the house have gone out at night and helped to deal with the needs of homeless people and others. But I am also concerned about young people who want to come to Canberra and work here. What often happens when people are offered employment is that they come to the city to check it out and see if they like it. They also check the people they are going to work with. Usually they look at the Canberra Times to determine the availability of rental accommodation. I have heard too many stories of people who have knocked back jobs because it is too hard to get rental accommodation or it is too expensive here, so they move on.

To say, “We are not going to tackle land tax, and the opposition’s suggestion that the only way to deal with it is to abolish it is a terrible idea,” shows a very limited outlook in terms of solving problems in our community. Are we seriously being told here that,

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