Page 3241 - Week 09 - Tuesday, 19 August 2008
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MR MULCAHY: Mrs Burke says I have never thought it is a problem. The fact is that Mrs Burke knows that, for 67 per cent of the people in Molonglo, their biggest single asset is their family home. If she is saying to me today, “Let’s erode the value of that,” I am delighted to hear that, because I know the people of Canberra want to hear that message! On top of her new-found commitment to the Stanhope tax regime, it is really becoming a point of differentiation. Basically, what housing affordability means to Mrs Burke is: “Flood the market, devalue the family home and good luck to you, if we can get a couple of votes by giving people on $200,000 a year a subsidy.”
I acknowledge that the government has taken certain steps in relation to improving housing affordability, but I do not think that the government has done anywhere near enough to assist in relation to the burden on families through its tax regime. I think it is quite hypocritical to get up here and wax lyrical about a deep commitment to affordability, at a time when there have been substantial increases in the level of taxation attached to the ownership of property and to basic utility expenses.
During this term of the Assembly, the government have substantially increased rates and charges and continue to increase this tax in real terms every year. Their policy of indexing rates and charges by WPI ensures that the people of the ACT will face a growing tax burden in real terms every year. In addition, the government have introduced the utilities tax, which has increased the cost of basic utilities for all families in Canberra. This tax has particularly hit people on low incomes the hardest, since it is those families that spend the greatest proportion of their income on basic utilities.
The government has also introduced the fire and emergency services levy, which has increased rates on properties in the ACT. Whilst the bulk of this tax falls on commercial properties, it has nonetheless increased the burden on families. Indeed, since this government came to power in 2001, total taxes, fees and fines in the ACT have increased by over 66 per cent, which is more than 7.5 per cent per annum—almost twice the rate of inflation. Growth in taxes has massively outstripped the CPI, the WPI and the rate of growth of the economy.
I was talking to someone the other day in relation to what goes on in the property market. Whilst I am sure that the commissioner for revenue has worked this out, I was staggered to hear about the number of people in Canberra who are now going to agents to buy places in Queensland. Why are they doing it? It is because they get out of paying land tax and other duties. So just as whacking on high taxes, as we are about to consider in relation to motor vehicles, will guarantee that a lot of people will have friends across the border, and you will see even more New South Wales plates on vehicles around this town, similarly a lot of people say: “Well, I’ve got some spare capital. I won’t put it in the Canberra market because of the taxes and the land tax; I’ll put it up in Queensland where they’ll take your investments.” They get their return, they do not have the tax burden and the people of the ACT miss out because there is less investment in housing here. Anyone who assumes that you can make these taxation decisions without having any impact on the market is simply running contrary to the fundamentals of economics.
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