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Legislative Assembly for the ACT: 1996 Week 2 Hansard (28 February) . . Page.. 398 ..

MRS CARNELL (continuing):

There are a number of reasons why the decision was taken in relation to CRA. First and foremost, it was because the Commonwealth Government's instruction to the Commonwealth Grants Commission was that corporate restructuring for which States or Territories gave stamp duty exemptions should not be taken into account when it came to Commonwealth Grants Commission funding. Why was that? Because it was perceived by the Commonwealth Government that micro-economic reform in this country should be something that goes ahead and is encouraged. The ACT grant allocation was, therefore, not adversely affected by the exemption sought by CRA.

CRA made it quite clear to the Government that the proposed restructuring would not proceed in respect of the ACT incorporated entities if the exemption sought was not granted. Therefore, it is no money lost at all - not one dollar lost, not one cent lost. CRA have not gone ahead with their restructuring in any State that has not offered the exemption. New South Wales and Victoria, the other two States that have been involved, have waived the stamp duty. Therefore, a restructuring has gone ahead in both of those States.

Whether Ms Follett understands it or not, there are clear national benefits in micro-economic reform. The Federal Labor Government, at least at one stage, realised that micro-economic reform was a good thing for Australia and, therefore, a good thing for the ACT. We can actually produce evidence that CRA would not have gone ahead, because they simply have not gone ahead in States that have not offered this approach.

What would that mean to the ACT? To answer Ms Follett's question, if we send out a message that the ACT is a place that you cannot afford to incorporate in because we have a government that does not understand business, then all of the flowthroughs from having incorporation in the ACT go by the board. It means that all of the ongoing stamp duties, fees, charges and all of the rest of the things that go with having large companies - and, for that matter, smaller companies - incorporated in the ACT go by the board. It also would be detrimental to business confidence in the ACT.

Those opposite say time and time again that they want to encourage business to Canberra. Ms Follett used to get up in this place all the time and say, "Yes; I understand totally that the only new jobs in this city will be private sector based". We have all heard her say that.

Ms McRae: Why do you not answer the question?

MRS CARNELL: That is exactly what I am doing. We have all heard her say that all of the extra jobs in the ACT will be based upon the private sector. If we put out a definite discouragement to companies to incorporate in the ACT, what does Ms Follett think that will do both to our revenue base and to our job growth in this city? We lost not one cent by going down this path; but the message that we sent out to business was that it was safe to incorporate here, that it was safe to employ here and that it was a place where you can actually do business and do business in the confidence that you will be able to get on with the job of employing. That was without any doubt.

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