Page 2514 - Week 09 - Tuesday, 6 August 2013

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MR BARR: The first budget of this parliamentary term includes a wide variety of measures to build a stronger economy. The government, of course, continues our nation-leading tax reforms to create a stronger and more vibrant business community, which importantly reduces taxation on those two most mobile factors of production—labour and capital. It is very important that in setting your taxation policy you ensure that those factors of production that are highly mobile and competitive between jurisdictions are taxed as low as possible while ensuring a sufficient revenue base in order to fund the activities of the territory government.

The government has the right policy mix there. It is endorsed by every sensible economist not just in the country but in the world. In terms of which areas of tax you should apply, all economists agree on this point: inefficient transaction taxes are the worst way for governments to raise revenue. We will, of course, continue the implementation of our business development strategy to diversify our economy and to create new jobs.

The dividends from that policy are seen in the statistics I was able to provide to the Assembly, the facts on our economy and the performance of this economy in recent times. Through our investment in capital works, in the infrastructure that this city needs, through our policy decisions to support the residential construction sector and to support new land release in commercial and industrial estates, we are providing the right policy settings for this jurisdiction. We have the lowest unemployment. We have the highest growth of the non-resource economies. It is a good story for the ACT.

MADAM SPEAKER: Mr Smyth, a supplementary.

MR SMYTH: Treasurer, if all the economic indicators are, as you quote, so good, why is the budget performing so poorly—as the bipartisan budget report said, a budget full of debt, deficits and deceit?

MR BARR: The budget is performing very well, supporting this level of economic performance. Our policy settings are deliberate. The policy choices are for our economy to be $250 million bigger or $250 million smaller. You want it to be $250 million smaller, according to the sort of muddled thinking that you put forward in your estimates committee report.

The government’s view is that we are not crowding out any private investment and if we were not investing in this economy now, no-one else would be. The challenge for the Liberal Party is to provide a convincing argument as to why the economy would be larger if we adopted a different fiscal policy stance. If we were to contract our spending now, what would come in to replace it? Nothing. Our economy would be smaller, fewer people would be in employment and infrastructure would not be being delivered. That is the policy choice. And if you want to take the austerity path, feel free. You have that space; it is all yours. You can be the miserable sad sacks who think that our economy should be smaller. You can be the people who believe our economy should be smaller.

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