Page 1112 - Week 04 - Tuesday, 8 April 2008

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The Canberra community benefits from the government’s service provision remaining above the norm for other states while the taxation effort is essentially on the average.

MS MacDONALD: Mr Speaker, I have a supplementary question. Treasurer, can you say what comparisons of taxation effort across jurisdictions reveal in relation to the growth in the rate of taxation in the ACT, other states and the commonwealth?

MR STANHOPE: Once again, I thank Ms MacDonald for raising an important question. Meaningful comparisons are important as they provide a measure of reasonableness. I note that a suggestion has been made that the government is comparing itself only with other governments which are all high taxing. The proposition that all Labor government are high taxing could again be tested with a reference to their expenditures or with reference to a Liberal government.

Between 2000-01 and 2005-06, the fiscal imbalance between the commonwealth and the states and territories increased. The commonwealth’s share of total taxation by all levels of government has increased. The share of taxation by state and local governments has actually decreased. In 2000-01 commonwealth taxes comprised 82 per cent of the total taxation by all levels of government. In 2005-06 that share had increased to 82.3 per cent.

Commonwealth taxes grew at a much faster rate compared to states and territory taxes. From 2000-01 to 2006-07 commonwealth taxes increased at an average annual rate of 6.6 per cent. On the other hand, state government taxes increased at an average annual rate of 5.8 per cent. ACT taxes grew at an even slower rate of 4.2 per cent per annum.

Despite increasing its share of taxation, the commonwealth reduced its contribution to key services such as acute care, disability services and housing assistance. State governments were left to make up the difference in costs as the population ages and housing stress increases.

For the ACT specifically, between 2001-02 and 2005-06 per capita specific purpose payment funding decreased by more than 10 per cent in real terms. In other words, the commonwealth contributed in real terms 10 per cent less in 2005-06 than it contributed in 2001-02. In 2001-02 the commonwealth contributed 31 per cent of the acute care costs in the ACT. By 2006-07 that had dropped to 23 per cent.

In summary, Labor states’ taxation grew at a smaller rate than that of the Liberal federal government. Over the last five years the highest taxing jurisdiction with the greatest increase annually in taxation was the one and only Liberal government in Australia. The highest taxing government in Australia between 2000-01 and 2006-07 was the one Liberal government in Australia.

I ask that all further questions be placed on the notice paper.

Cultural Facilities Corporation—quarterly report

Paper and statement by minister

MR STANHOPE (Ginninderra—Chief Minister, Treasurer, Minister for Business

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