Page 158 - Week 01 - Wednesday, 17 February 1993
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Goods and Services Tax - ACTEW
MRS GRASSBY: My question is directed to the Minister for Urban Services. Can the Minister inform the Assembly of the effects of the GST on the cost of services provided by ACTEW?
MR CONNOLLY: As the Prime Minister indicated yesterday, the GST affects everybody. When you go home and have your shower, or when you press the flush button, or when you turn the light switch on, it is Dr Hewson's hand in your pocket. The GST will have the effect of putting 15 per cent on everybody's water and electricity charges. But, Madam Speaker, that is only the half of it. You have to think of what that means. ACTEW generates sales revenue of some $300m a year. It was a bit over that last financial year, but we will round it down to $300m a year.
Let us accept all the benefits that you claim for Fightback and the GST. Let us accept that the GST means a reduction in the fuel excise. At the moment fuel excise costs ACTEW about $300,000 a year. Let us accept that the GST means the abolition of payroll tax. Payroll tax costs ACTEW a bit under $3.5m a year, but let us be generous and say that there is $4m worth of benefit to ACTEW in your tax reductions that you talk about so much. ACTEW does not pay sales tax on its purchases, nor do all the other taxes you talk about affecting business apply to ACTEW. The imposition of a GST of 15 per cent on $300m worth of sales will cost $45m. Madam Speaker, $45m will transfer from ACT ratepayers to the Commonwealth Government.
Let us be generous and talk about a $4m taxation benefit, although of course payroll tax is neutral to the ACT if we believe you. If we believe you, Mr Kaine, at best payroll tax is neutral. But what is new and what has not been considered is that there will be an additional slug on ACT taxpayers. Forty-five million dollars that is now not paid in tax will go straight to the Commonwealth Government. Madam Speaker, there is nothing in the Fightback package mark 1 or mark 2 - or mark 10 or mark 12 or whatever we are up to now as Dr Hewson runs around the country inventing new give-aways - that provides a compensation mechanism.
The GST is a new form of taxation taking $45m away from the ACT and directing it to the Commonwealth. Madam Speaker, the ACTEW dividend is now about $20m. That $45m means a significant reduction in ACT expenditures. To give an idea of what $45m means to the ACT, I ask you to contemplate that the police budget is about $50m. That is the scale of what this new taxation, the GST, will take away from the ACT community and transfer to the Commonwealth. We have no compensation mechanism.
Election Campaign Sign
MR WESTENDE: My question is directed to the Minister for the Environment, Land and Planning. I refer the Minister to page 5 of the Canberra Times of today, which shows a photograph of the two Federal members for the ACT and a sign. Could the Minister indicate whether the sign shown in the photograph was officially approved by the Government and legally constructed in accordance with building regulations? Was it approved by the Minister or an authorised person? If not, will charges be laid in accordance with section 12 of the Roads and Public Places Act 1937?
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