Page 1328 - Week 05 - Tuesday, 5 April 2005

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Treasurers conference

MS MacDONALD: My question is directed to the Treasurer. Can he report to the Assembly on the outcome of the Treasurers conference recently held in Canberra?

MR QUINLAN: This is an important question to raise in the house. A couple of weeks ago I attended the Treasurers council. It went according to form—it is usually a bit of a set piece—other than an item called “review of state taxes”. It boiled down to the fact that the federal Treasurer has demanded that taxes that it was agreed in the intergovernmental agreement that supports the GST would be reviewed would now be abolished.

In fact, I think Mr Costello is effectively rewriting the intergovernmental agreement. The intergovernmental agreement was signed in June 1999 by John Winston Howard, Robert John Carr, Jeffrey Gibb Kennett, Peter Douglas Beattie, Richard Fairfax Court, John Wayne Olsen, James Alexander Bacon, Kate Carnell and Denis Gabriel Burke. The point of listing those names is to advise the house that, of the eight states and territories that signed that agreement, three were Labor and five were Liberal.

The Treasurer—having been part of this—claims all the credit for the introduction of the GST. He has claimed that these taxes put forward in the intergovernmental agreement to be abolished and taxes to be reviewed were those put forward by the states. It is important to recognise that the states and the people of the states have since changed many of the governments that signed this agreement. I would think that all states and territories would be bound by the agreement. There is no argument that we are bound by what is the letter of the agreement.

The states and territories have in fact abided by the letter of the agreement. However, it is being re-interpreted. One would assume that, if it were to be re-interpreted in some way or other, it would be re-interpreted by the governments of today. And those governments of today, of course, are of a different balance. It is unlikely that the balance of states would focus, as the previous group did, on business taxes, particularly business taxes alone.

What we have from the federal Treasurer is a rewrite of the agreement—his own reinterpretation. And we have some fairly thinly disguised, if disguised at all, threats—ill defined, but nevertheless definite threats—in relation to the continuation of the intergovernmental agreement and the GST arrangements now in existence.

All state representatives, no matter what side of politics they represent, should be very concerned about this matter. A number of taxes were to be subject to this review: they number seven all up; three of them are not applied in the ACT these days anyway, and four are. From those four, next year we expect to gain about $50 million. If we abolish them all immediately, that is $50 million off our revenue.

The push from the federal Treasurer is more for phased abolition of those taxes. But $50 million! To put that into context, we are about $50 million ahead on GST, until you take into account the elimination of productivity payments; until you take into account the fact that the ACT has been singled out and corporate regulatory fees have no longer

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