Page 2836 - Week 07 - Thursday, 7 June 2012

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MR SPEAKER: Mr Seselja, a supplementary question.

MR SESELJA: Treasurer, what would be the cost of living impact on household budgets if the utilities tax and parking fees were included?

MR BARR: It would depend on the utilisation of a motor vehicle and/or telecommunication utilities and it would depend, of course, on where that individual householder worked and to what extent they were paying parking fees to the ACT government or to a private parking provider or, in fact, whether their car parking was provided free as part of their job. It would depend, and circumstances would vary. There are a number of different employment locations within the city where there are no parking fees charged at all.

MR SPEAKER: Mr Seselja, a supplementary.

MR SESELJA: Treasurer, what other taxes, fees and charges which fall directly on ACT families and households have you left out of the cost of living statement?

MR BARR: I do not believe we included the big cuts in insurance tax that are a big part of the tax reform package that I announced earlier in the week. Every Canberra household that has home contents insurance, motor vehicle insurance—indeed any form of building insurance or in fact life insurance—will start to see big cuts in the amount that they pay. And that is a real impact on people’s cost of living. It puts in the shade anything that has been proposed by the Leader of the Opposition to seek to ease cost of living pressures. It is many hundreds of dollars a year for every Canberra household that has insurance, and it is one of the most economically efficient ways to make a transition away from a tax that is inefficient, distorts activity and is a discouragement for investment. By abolishing it we are making a real difference to people’s cost of living because almost every Canberra household has some form of insurance—many in fact have multiple insurance policies—and the amount that they pay in insurance each year can be into the thousands of dollars.

Removing this tax is a significant win. It reduces cost of living pressures and reduces distortions in the economy. It is the most inefficient tax that is levied by state and territory governments, and its abolition in the ACT has been universally welcomed by economists, by the Insurance Council, by the Financial Services Council. In fact, even the former New South Wales Liberal leader, John Brogden, in his new position working in the financial services area, has come out and endorsed this reform as being one of the most significant tax reforms this country has seen.

The ACT is taking a leadership role in this area.


MS PORTER: My question is to the Treasurer. Treasurer, can you please outline to the Assembly why it is important to support the local economy and local jobs?

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