Page 641 - Week 03 - Thursday, 15 March 2007
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The impact on the revised budget position of changes to ACT government taxation in the 2006-07 financial year.
MR MULCAHY (Molonglo) (3.47): I wanted to focus in particular on the midyear review of the ACT government’s financial position, which has shown that we can expect the territory to have a positive net operating balance by the 2008-09 financial year. In 2005-06, the net operating balance was in deficit to the tune of $140 million, but in this financial year it is expected to have a deficit of $42 million.
The Chief Minister has touted this review as evidence of good financial management by the ACT government. After all, this is $98 million less of a deficit than last year and we will eventually, if things go to plan, get into surplus. I suspect that could be achieved earlier than even forecast.
We have seen press statements by the government telling us that this is a result of good management. Sadly, the figures in the midyear review and the experiences of Canberrans tell a rather different story. This projected surplus has been achieved by two main factors. The first is large-scale increases to taxation, which are hardly cause for celebration, and the second is large increases in forecasts for long-term gains from superannuation assets. Since this is the job of fund managers, this also is hardly a consequence of good management by the territory government, despite the claims being made. In fact, increases in taxation revenue and in projected superannuation gains account for a massive 85 per cent of the decrease in the deficit.
In the 2005-06 financial year the government collected some $782 million in taxation revenue. This year they estimate they will collect $827 million. As I have made clear in previous statements to the media, the whole point of avoiding deficits is that they impose an inevitable burden on people in the future, whether that be through increased taxes or through decreased levels of service. Sadly, we have won on both counts here. We are copping the increases in taxes but we are also seeing the deterioration in levels of service. The whole idea, of course, is to avoid these results.
The only way that these results can be avoided is by greater efficiency in government. This is the only viable way to reduce the tax burden while delivering services, by reducing spending on wasteful projects and inefficient management. We have seen wasteful proposal after wasteful proposal by this ACT government. The last fiasco, an expensive bronze statue to remind us all how great the Labor Party is, is just one in a long line of projects by a government with more dollars than sense. Sadly, they are not their own dollars; they are the dollars that are provided by the people of Canberra in greater and greater quantities.
I am quite convinced that the public are becoming more and more alarmed at the level of reckless spending by this government, and the crescendo of concern is growing. The government were warned that their spending binge would lead to deficit, and it certainly did. But instead of learning a lesson, instead of curbing the spending, they have decided the way to go is just to take more of our money. I am reminded of a skit by comedian Jerry Seinfeld, who remarked that helmets were invented so that humans could continue living their head-cracking lifestyles; that rather than abstaining from activities which crack our heads open, we simply chose to invent a device that will allow us to continue with these activities.
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