Page 2140 - Week 06 - Thursday, 26 June 2008
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symptomatic of how this government has treated infrastructure. It seems that it is patch-up jobs and it is catch-up jobs, rather than planning ahead and putting in place real and serious infrastructure improvements.
We have made comment about the government’s land rent scheme—I covered that in a speech yesterday—and certainly we have real concerns about it. We have real concerns based on the answers that were given to us by Treasury. We have concerns about negative equity. We have concerns about people on low incomes getting themselves into more trouble as a result of this scheme. And we see the very small numbers that will be part of this scheme. The government is budgeting for 120 blocks a year—that is what it is expecting will be the take-up rate at this point—and Treasury tells us that after five years it expects that 20 blocks will have been purchased, with 20 per year every year after that; so it is very small.
But that is not the major problem. We are talking about four per cent of first homebuyers being expected to take up these blocks. The major problem is the issues around stability and the issues around negative equity. We think this could be a detrimental scheme that might hinder rather than help first homebuyers and see their dream of house and land ownership drift further away. We see the risks associated with owning a house, but we do not see the security that goes with owning land. If you do the numbers and compare it to actually renting in the private market at the moment, the costs are not all that different, yet when you rent, of course, you do not have the risks that are inherent in taking out a large loan and having an asset which is a depreciating asset. So this is a scheme that we have real concerns about.
We put those concerns on the record and I take the opportunity again to put on record that this is a scheme that has not been well thought through, despite the Chief Minister’s protestations. We do need to put the numbers into stark contrast. We have the Treasury saying 120 blocks per year will be taken up and on these assumptions that after five years only 20 families in Canberra will have been able to purchase land as a result of this scheme. We do not think that it is worth the money that is being allocated, especially considering the significant risks of negative equity and financial instability that are inherent in this scheme.
MR MULCAHY (Molonglo) (8.48): Discussion of the Treasury portfolio is obviously central to the discussion of the budget, and I am pleased to be able to speak on this topic. We have seen the government take a consistent direction in this territory in favour of expanding the size and dramatically increasing taxes to fund its large increases in expenditure. In the 2006-2007 budget, the government introduced new taxes and made large increases in rates and charges, allegedly on the basis that this was required to balance its budget. The government did not look to curtail its spending in a serious fashion but instead simply forced taxpayers to pick up the bill for its profligate attitude.
The justification for tax increases was shattered when, over the last few years, it has emerged that the government have substantially underestimated their tax revenue or, probably more accurately, Treasury have significantly underestimated tax revenue in the advice they have given to government and, in fact, the government have received substantial windfall revenues that they were not expecting. The forecasts in relation to the budget have not been close to the mark in the four years I have been in this place
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