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Legislative Assembly for the ACT: 1997 Week 5 Hansard (15 May) . . Page.. 1517 ..

MS TUCKER (4.11): The Greens will be supporting this Bill. Taxing is never a very popular exercise; and, as far as taxes go, the debits tax - a tax on withdrawals from financial institutions with cheque writing facilities - is certainly not one that you would rate highly in terms of either efficiency or equity. As far as I can see, it also does not meet any other taxation objectives, such as meeting environmental objectives. It is, however, a tax that all other States have, and it is estimated to bring in some additional revenue for the ACT. We will also soon be part of a national scheme that will extend the debits tax to all accounts.

State taxes generally tend to be regressive. I know that I have said it before, but I would like to reiterate that a commitment to improving the tax base and making it more equitable should be a priority for a Federal government. Unfortunately, it is not; and this week's Federal budget is a terrible disappointment in this regard. As a proportion of GDP, revenue is decreasing, according to the budget forecast. The Greens are always interested to look at new revenue proposals. We do, however, have considerable concerns about this tax before us today, because it will, in our opinion, impact disproportionately on lower income people without meeting any other taxation objectives. So, we have to look at other ways of mitigating the impact on poor people in Canberra.

One of the first concerns I have about this tax is that, from personal experience, I know that people on lower incomes are often much more likely to have to pay bills in small instalments over longer periods of time. That means that they are likely to make withdrawals more frequently than people on high incomes do. Although, on the face of it, making the tax lower for smaller withdrawals appears to somewhat mitigate the regressive nature of this tax, if you are forced to make five smaller withdrawals or write five small cheques for a bill of $100 rather than pay in one go, you will be paying $1.50 rather than 70c. So, you can see how the better-off person who can write just the one cheque is actually advantaged.

The Government has proposed to offer a rebate to some social security recipients - people in receipt of an age pension, a disability support pension, a carer pension, a sole parent pension, a widowed person allowance, a wife pension or a Veterans' Affairs pension. The Government has also included a provision for charitable organisations, some hospitals, universities, colleges and schools to hold accounts that are excluded from the tax. The Opposition has come up with some amendments to extend this scheme to all health care card holders and also to make the exemption up front, with the introduction of certificates of exemption. Their argument, which I think has merit, is that, if we are targeting one group of lower income people, we should target all of them and not single out particular groups. I think this is a very important point to make in the discussion this evening, and it will be made in the discussion of the proposed amendments.

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