Page 3613 - Week 12 - Thursday, 13 October 1994
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Madam Speaker, if the motion were passed, the effect of it would be simply to lead to a return to a rate differential between New South Wales and the ACT from 1 November 1994. I would expect that, even if that were to be the case, there would be no benefit passed on to ACT motorists. That has been our experience, and I believe that that would again be the case. So, instead of allowing our revenue base to be eroded, what the Government has done is to seek to reduce petrol prices in the ACT through the introduction of competition in the retail market. These reforms have seen a genuine reduction in the price of petrol for ACT consumers, without damaging our ACT petrol revenue base. Mr Connolly will be addressing that matter in greater detail, I imagine; but even Mr Humphries in his remarks conceded that there had been a real reduction in the price of petrol in the ACT.
I might just touch on that reduction. It has seen the difference between Canberra and Sydney in the retail price for unleaded petrol fall from a high of 8.6c per litre in January 1994 to only 1.2c per litre in June of this year. That is a real benefit that has been passed on to ACT motorists. Madam Speaker, the Opposition's motion smacks of hypocrisy. For example, they supported my move to align with New South Wales in terms of the decision on the petrol tax threshold. They thought that that was a good idea. But now they will not support a measure which will not increase the real rate of tax but which simply maintains the status quo. I find that a hypocritical stance on their part, and I suspect that Mr Humphries is posturing on this matter.
There are a couple of other issues that I would like to touch on. I think that, in his remarks, Mr Humphries has confused the Government's action in terms of indexation with its action in terms of competition. Indexation maintains the real level of tax, but it does not allow the tax base to be eroded. Madam Speaker, if there were not that indexation, then the erosion of the tax base would not be by conscious decision of this Assembly or of the Government, but more or less by stealth, simply through the effects of inflation. I am sorry that Mr Humphries is not listening. On the other hand, competition policy is directed at reducing the prices by reducing the excess profit that is made by the oil industry compared to their profits in other markets such as Sydney. So, we are looking at a different strategy - a competition strategy. There is no comparison between the two measures - the policy of indexation and the policy of competition. Indeed, I believe that the cost of indexation to the consumers is more than offset to the consumers by our competition policy. Mr Connolly will make that even more clear. Mr Humphries has also conveniently ignored major changes in the Territory's circumstances since the franchise fee was first introduced by the Alliance Government. One of those major changes has been an unprecedented reduction in Commonwealth funding. That occurred in 1992. There was about a 20 per cent reduction in our general revenue grant. It remains the case that the overall tax effort in the ACT is generally less than that in the States, as measured by the Grants Commission. That is also a matter of record.
Madam Speaker, I believe that Mr Humphries, in moving this motion, is being consistent with his attitude last year; but I do not believe that it is a totally responsible attitude. He has certainly given us no indication whatsoever of where he would raise the money that would be lost to the Territory if his motion were to be successful.
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