Page 851 - Week 03 - Thursday, 30 March 2006
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I table the paper and move:
That the Assembly takes note of the paper.
Debate (on motion by Dr Foskey) adjourned to the next sitting.
Duties Amendment Bill 2006
Debate resumed from 9 March 2006, on motion by Mr Quinlan:
That this bill be agreed to in principle.
MR MULCAHY (Molonglo) (12.15): This bill abolishes duty on the sale or transfer of non-property business assets, and for that reason the opposition support this bill. This is one of the many taxes imposed by the ACT government that were marked for abolition in return for the GST under the intergovernmental agreement—IGA as it is known—in 1999.
From 1 July 2006 duty will no longer be payable on the sale or transfer of business assets such as goodwill, intellectual property, statutory licences or permissions under commonwealth or territory law and franchise agreements, except for franchise agreements longer than 30 years. It is a small step, but it is a correct step and it is in the right direction. The saving to business from this amendment is estimated to be around $2 million per annum. This is better than nothing, but we need to see this in perspective.
Duty of some $160 million in terms of receipts will remain on the sale and transfer of real property; that is, land. The big tax remains. The recently retired Treasurer foreshadowed that removal of duty on non-property business assets would be followed by the abolition of duty on rental arrangements in 2007-08, which will represent an estimated saving of around $3 million; lease duty in 2009-10 with a saving of $4 million; and duty on unquoted marketable securities in 2010-11 with a saving of $10 million. The total saving, including the $2 million from this amendment, to businesses by 2010-11 will be $19 million per annum.
The government had an opportunity to remove these and other inefficient taxes much earlier, of course, when its revenue was booming, but instead it committed itself to a spending program on all sorts of new schemes that we have seen in recent times such as the arboretum, the prison and—I am not quite sure where this one sits—the Civic-Belconnen busway. We are just not sure whether it is in the loop or out of the loop; it depends on which minister is talking to the media. Now that the government’s budget is well into the red, and is expected to be even worse next year, the scope for bringing forward the tax cuts has virtually vanished. There is now even less prospect of removing the biggest disincentive to commercial property investment in the ACT: stamp duty on commercial conveyances.
I believe the government have got themselves into a bit of a corner where they now simply cannot afford to give tax relief and have to wear the consequences of reducing the attractiveness of Canberra as a place to live and do business. Frankly, I can understand their predicament, and it makes me very reluctant publicly to advocate new initiatives
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