Page 1193 - Week 04 - Thursday, 17 March 2005

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budget. This forecast is consistent with the market expectations, which were of a 0.25 percentage point rise in the first half of 2005, and there are projections of a further increase, I believe, of about that magnitude. So the projections clearly were there.

The expertise is obviously there to anticipate the changes that have occurred. So the government certainly cannot go into the media, as the Chief Minister did, and say: “We have had this increase in interest rates, so we have this terrible drama ahead. We are going to have to have a horror budget. You are going to have your taxes raised or your services slashed.” The Treasurer has advised his colleagues that this was coming, the treasury officials have clearly advised the Treasurer that this was coming, and catastrophe was not being forecast in terms of the rate coming out of left field.

The Chief Minister said that the end of Canberra’s property boom and a slowing of Australia’s economy meant that the government needed to increase its revenue or slash expenditure if the 2005-06 budget was to remain in surplus. We had this sort of dramatic weekend forecast put out by the Chief Minister, but there seems to have been, since then, some confusion as to how serious the policy will be in terms of increasing taxes. I have not been able to get a satisfactory definitive response on that issue. Certainly, if there is any talk of slashing expenditure, which is what the Chief Minister alluded to as needing to be done, we are told that it is just the Liberals wanting to cut wages.

I note from the government’s latest update that the midyear review of the budget has revenue from property increasing over and above the budget estimate for 2005-06. The government now expects to get more from the property boom next financial year than it forecast a year ago. Conveyancing revenue increases from $177 million to $184 million, although I saw reports yesterday that that figure could be as high as $192 million. I am not sure if that is more current data or from some other source. It has been projected for land tax to increase from $58 million to $60 million. So the relevance of the property market in the government’s figuring is obviously of importance. It is important, therefore, that the Chief Minister’s and the Treasurer’s statements are consistent with their own budget forecasts.

In terms of GST, the latest data from the federal government shows that the estimated revenue for the ACT will exceed the forecasts made in the ACT’s 2004 budget. As the ACT is a territory, it really should be doing well, and our level of indebtedness and the like do suggest that we are in better shape than some of the other jurisdictions. But the problem is the way in which the territory’s affairs are being managed. The government here seem to have a policy of spending the revenue that comes in. There is not a policy of looking for a deteriorating situation, as seems to be the case.

This government’s tax policy seems to be almost a non sequitur. It is one of “let’s try this but we won’t proceed now”. An example of that is that they proposed a different rates policy, but then that all got too hard. Then there was going to be a bushfire tax, but then we had the insurance situation suddenly emerge and they changed their mind. Then there was another bright notion that we were going to have a parking space tax. I guess somebody talked to their colleagues in WA. I think they tried that out there and sparked a new civil war. Before long after they had announced this idea in Canberra, we had people in the city—property owners, hotel operators and the like—with near heart failure over the consequence of this measure on their already struggling enterprises.

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