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Legislative Assembly for the ACT: 1998 Week 9 Hansard (17 November) . . Page.. 2579 ..

MS CARNELL (continuing):

Mr Speaker, I think one of the more interesting moments of the Premiers Conference was when Mr Kennett gave Mr Carr a lecture on social equality in terms of horizontal fiscal equalisation. The agreement on principles, which I will now table for the information of members, records the objections of New South Wales and Queensland on these two quite specific points. The rest of the document is agreed with all States and Territories - a rather remarkable achievement in itself.

Members will be able to read through the agreement for themselves; but, in summary, it covers processes for implementation; specific taxation reform measures by both the Commonwealth and the States and Territories; distribution of GST revenue; transitional arrangements to ensure no State or Territory is worse off; improved local government finances; the establishment of a first home owners scheme; arrangements for managing the GST rate and base; application of the GST to State and Territory governments; reciprocal taxation arrangements; and provisions for the ACCC to take legal action against business pricing decisions inconsistent with tax reform.

For the ACT, the agreement means that we will certainly be no worse off during the period of transition to the new scheme than if current arrangements continued, that is, real per capita increases. When the transitional period ends the ACT will immediately be better off by at least $20m per annum on current estimates, with that figure growing each year as the GST pool grows. It is also worth noting, Mr Speaker, that under the tax reforms Canberrans will be paying less tax overall, as a result of significant cuts to personal income tax rates. These personal income tax rates will put between $200m and $300m a year back into the pockets of Canberra taxpayers. Of course, that gives taxpayers more spending power that flows into the economy in areas such as retail sales.

Mr Speaker, the agreement on principles reached on Friday is the start of a process that will see a great deal of work done between now and the next Premiers Conference in April to develop a detailed intergovernmental agreement on the new financial arrangements. As always we will be pursuing the best deal possible for the ACT, but with an eye also to the benefits to the nation as a whole that will flow from the reforms to, I have to say, what is very much a ramshackle taxation system.

Mr Speaker, the interesting part of this Premiers Conference was that, whether a State was Labor or Liberal, or CLP in the Northern Territory's perspective, the agreement was very solid. The States and Territories do need access to growth revenue. The GST will certainly bring that to the States. It is interesting, Mr Speaker, that no discussion whatsoever was brought forward by Labor States during the conference with regard to the GST. In fact, the agreements reached were, from my perspective, very heartening.

What it does show, though, when you actually look at the figures, is that the ACT is one of the big winners from the whole package. It does mean that we can look forward, as long as the Senate does the right thing, to a situation where, in the not too distant future, the ACT will have access to growth revenue, something that we have not seen since self-government. In fact, we have seen the opposite, Mr Speaker. That is something that, I would assume, all members of this Assembly would embrace, whether or not they like the GST. The fact is that it is growth revenue. That is more money for health, education, police, and community services.

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