Page 1468 - Week 05 - Wednesday, 14 May 2014
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the states and territories. There are also impacts that flow through to the broader economy and hit a range of other parts of the territory budget.
We fare worse because the cuts from the commonwealth are concentrated in the territory. We are hit twice. Not only do we lose the payments, like all other states and territories, but also we have the double whammy of the commonwealth’s contraction in employment and spending hitting all other aspects of the territory economy, particularly the performance of the private sector.
For example, in health, we are the hardest hit. On top of the GP co-payment, the commonwealth has ceased funding for a number of national partnerships. The commonwealth has ceased funding in other areas. The national partnership on Indigenous early childhood development helps to fund essential services at the West Belconnen Child and Family Centre. This is just one example of where the commonwealth’s decision to withdraw from national partnerships—to withdraw from, seemingly in the medium term, any responsibility for health and education services in this country—is very concerning, and should be for all Canberrans.
The initial estimation flowing through the range of different revenue lines impacts on payroll, on stamp duty and on our land revenues, combined with the withdrawal of commonwealth payments both in terms of those that relate to health and education specifically. That series of national partnerships sees the impact on the territory budget of certainly north of $100 million each year and probably around $150 million each year and rising in the future, particularly with the new indexation arrangements that the commonwealth have announced for health and education funding from 2017 and 2018 respectively.
That will ensure that all state and territory budgets come under extreme pressure and the majority will likely be permanently in deficit unless there is a significant cut to services or a massive increase in taxation at a state and territory level because, as we all know, this level of government does not have the wide-ranging taxation powers that the commonwealth government does.
So it is all well and good for the commonwealth to be improving their bottom line, but all they have done last night is pass the problem to the states and territories and to each individual household in this country. (Time expired.)
MADAM SPEAKER: Supplementary question, Ms Porter.
MS PORTER: Treasurer, how else do economic conditions affect the revenue lines you mentioned?
MR BARR: The cuts to employment will flow through to lower spending in our economy, meaning our private sector and our households will take a hit. The expected flow-on effects will head into a number of our revenue lines, as I indicated. Payroll tax revenue reflects expectations of growth in employment and wages in relevant sectors of the economy. General rates revenue is dependent on changes in the wage price index and, of course, in new property growth. Conveyance duty revenue is directly dependent on transactions in the property market and can now be expected to
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