Page 430 - Week 02 - Tuesday, 15 February 2005

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the community sector and walk the talk about ecological sustainability and good planning.

MR QUINLAN (Molonglo—Treasurer and Minister for Economic Development) (5.24), in reply: I thank the house for the general support of the bill. I would like to respond to a couple of comments—and Dr Foskey got it right—that the abolition of these taxes is part of the intergovernmental agreement that facilitated states’ and territories’ acceptance of the introduction of the GST. So it was a very brave move to go to the electorate last year promising to cut a tax. If you look at our budget from last year or the year before, you will see that these taxes are scheduled to be phased out anyway—and they have been phased out, consistent with an agreed timetable that was associated with the intergovernmental agreement.

But what concerns me out of today’s debate is Mr Mulcahy starting to mouth the right wing orthodoxy that, if you lower cost to business, everybody will gain. I am just a bit suspicious of that. With what little understanding I have of economics, I do not believe that there are many perfect markets and very many perfect balances that can be struck and there is no certainty that a reduction in any business tax will necessarily flow back to the benefit of the community of the ACT.

Through you, Mr Speaker, I would counsel Mr Mulcahy that, to actually become a cipher for the federal Treasurer by name-dropping, on the one hand, and in fact repeating his opinion, he might be doing this territory squarely in the eye. What has followed from the introduction of the GST—and if you have not been under a rock you will know it—has been a succession or a conga line, as we like to say these days, of federal ministers who have claimed the states and territories have done so well out of the GST that they ought to take more responsibility for aged care, health, education or whatever.

There is a process now being peddled—and has been peddled over the past year or two—by the federal Treasurer of cost-shifting to the states and territories. If you want to be complicit in that, you will, as I said, be doing a grave disservice to the territory that you are supposed to serve. That process will continue and, mark my words, we will see at the Treasurers Council next month a stronger run at the abolition of taxes and the abolition of state revenue by the federal government—a federal government that over the years, particularly over recent years, has had a far greater growth in its total share of the tax cake than have the states and territories. That is a fact.

So what needs to be done, what people in this Assembly need to do, is, in the first instance, remember that they represent the people of the ACT. There will be considerable pressure on special purpose payments, on state government agreements in various areas, applied by the federal government to all the states including the ACT.

You mentioned, in terms of the benefits that accrued to the states and territories, a sum of money that included national competition payments. They have just been withdrawn. The territory is now in an arm wrestle over what is euphemistically termed special revenue assistance. But it should be genuinely assessed funds and grants that should come to the ACT via the Grants Commission to put us in an equal position with other states and territories but, because he can, the federal Treasurer is working to abolish those, to pinch the miserable $14 million a year from the territory. That is his attitude. So

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