Page 474 - Week 02 - Wednesday, 5 March 2008

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At the same time that the federal Labor government is going some way towards reducing the size of government in Australia, its ACT colleagues are still wedded to an unshakeable big government mentality. They are taxing and spending with impunity, with Canberrans picking up the tab for their waste. They have squandered a great many opportunities to create a more efficient and effective government throughout their terms in office. They have squandered the opportunity to reform the ACT tax system when the GST was introduced. They have increased existing taxes and introduced new ones. More recently, they have squandered an opportunity to provide relief by refusing to repeal the utilities tax.

The government are awash with money. It is a matter of public record. They are receiving more revenue than ever before, and they are, in fact, in a position to provide much-needed tax relief. The December quarter financial report has continued the trend of revealing underestimation of tax revenues and has demonstrated that the current tax regime in the ACT is excessive. The report showed $57 million in allegedly unanticipated tax revenue, including $23.1 million in commercial conveyance revenue, $23.4 million in residential conveyance revenue and $9.5 million in stamp duty on shares and securities. This has been a continuing trend in the ACT government. Each quarterly report shows a higher and higher level of allegedly unanticipated tax revenue, and the ACT Treasury seem either unable or unwilling to adjust their estimates to reflect their consistent underestimation.

The people of the ACT have been told for years that the taxes imposed by their government are necessary to fund services. They have suffered the burden of increases to taxation, with the government assuring them that such measures were a necessary evil. However, the necessity of these taxes has been consistently belied by the actual revenues reported in the quarterly reports. The revised forward estimates in the December quarter report show an anticipated surplus of $196 million. The revised estimate for the total taxation revenue for this financial year has now broken the $1 billion mark.

To put this enormous figure into perspective, I note that the total taxation revenue for the government in the 2001-02 financial year, when the Stanhope government first took office, was $631 million. Since then, taxation revenue has increased by 58.5 per cent, which is an increase of almost eight per cent per annum. In the last decade, we have seen the introduction of the GST, which was supposed to be accompanied by state and territory tax reform. Whilst the government has repealed some ACT taxes in order to satisfy its minimum obligations under the intergovernmental agreement on the GST, it has, at the same time, introduced a range of new taxes and dramatically increased its existing rates and charges. This action, in my view, has been in clear contrast to the spirit of the agreement, which was to allow states and territories an opportunity for comprehensive taxation reform. Instead of taking this opportunity to reform its tax system, the ACT government has used the GST as a cash cow whilst continuing to raise many other taxes.

Turning particularly to the utilities tax, which was introduced in the 2006-07 ACT budget, it was a quite ill-considered and unnecessary measure which was justified at the time on the basis of shaky revenue figures issued by the ACT Department of

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