Page 2403 - Week 09 - Tuesday, 6 August 1991
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The question that is tackled by this budget strategy is to cut back on the capital works, the effect of which is to transfer that money from the capital works program to the recurrent program. It is something which I have suggested a number of times and which I am delighted to see finally implemented. I wonder, though, whether the extent of the move is adequate. We must recall that last year the Alliance Government increased capital expenditure significantly, and the move of the Labor Government is to put back what was added to the capital expenditure and add some $5m in that transfer process. So, I wonder whether, apart from restoring things to how they were before the Alliance stuffed it up and then adding some more, it is enough.
My recommendation, as a reaction to this budget strategy, is first and foremost to consider making that capital works figure even lower than $192m. I am not talking about some $20m; I am talking about perhaps easing it back another $3m or $4m because I am aware of the ramifications of cutting back capital works in terms of employment, projects and business and the effect that that will have in tight financial times. Nevertheless, it is, in principle, fair to say that people look around them and see that we have good capital infrastructure but to continue spending at the same rate on capital is not the appropriate way to go.
I would now like to move on to the one per cent land tax about which Mr Collaery has jumped on his white horse and which he has taken to task. The beauty of the one per cent land tax is that it is a tax on speculation rather than on productivity. It is another issue that I have raised again and again in this Assembly. I can remember that on a number of occasions when I raised it people said, "You have been reading Bill Mason again", and there is some truth in that, of course. I am sure that all of you have been approached by Mr Mason, who espouses the Henry George theories. As far as he is concerned, that is the whole solution to the problem.
What we have seen here is a very small step towards taxing speculation rather than taxing productivity. The Canberra Times recognised - it was something that I had mentioned on radio some days before - that the advantage of the one per cent land tax is that it would be a tax deduction from the Federal Government; therefore, the effect of it is to charge the people of the ACT some $3m while at the same time raising for the ACT over $6m. I think that is a very wise move.
The other part that I think needs to be taken into account when you are looking at land tax is the fact that over the last six months or so we have had significant drops in interest rates. People who have invested in this way are not necessarily the wealthy. I have never suggested that they are the wealthy. On many occasions the people who will be taxed are those who are trying very, very hard to put aside a nest egg for when they retire. It is important
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