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Legislative Assembly for the ACT: 2000 Week 5 Hansard (9 May) . . Page.. 1325 ..

MR HUMPHRIES (continuing):

Why did the Assembly agree to reduce betterment at that time? If it believed there needed to be inquiry, fair enough. An inquiry could occur even while betterment stood at 100 per cent. Why did it need to reduce betterment levels? The reason, Mr Speaker, was very simple.

At the time, as planning minister, I was approached by building unions and businesses, construction firms in the ACT, jointly, with the view that by reducing betterment levels we would stimulate what at that stage was a quite sluggish ACT economy, and an economy, what is more, whose construction sector was in serious trouble. There was a real need to be stimulating economic activity to create employment in the construction industry.

You might argue that we do not need that stimulus right now, today. You might argue that, and that is probably not an unreasonable argument given that there are quite healthy levels of activity going on in the ACT across the board, as members have heard from my stats given in this place during question time today. Nonetheless, we have to accept that if we thought in 1997-I think it was 1997-that lowering the betterment tax was going to produce economic activity and create jobs, why do we not believe that will be the case today?

We might say we do not need the jobs; that we can put the jobs to one side. That is a reasonable argument. But we cannot say that lowering betterment does not produce more jobs because we believed that in 1997. That is why the Assembly agreed in 1997, with the support of the Australian Labor Party at the time, to lower betterment levels.

Mr Speaker, the Assembly did not agree to lower betterment levels in order to create some kind of test tube for Professor Nicholls to be able to better analyse what happens when you lower betterment levels. That is not why we agreed to do that. We agreed to lower betterment levels in 1997 because we believed that that would produce jobs. Mr Speaker, if we accepted it then, we need to accept it now, because the argument is no different. The argument is absolutely the same. If economic activity is affected by taxation levels and you desire to produce a degree of activity in a particular area of the economy by reducing taxation on that level of the economy, then it makes sense to reduce taxation in this level if we want to create jobs in construction.

If members opposite want to say we do not need those jobs in construction at the moment, that is fine; let them say that. But I predict, Mr Speaker, that at some point in the future if the ACT economy looses its buoyancy, if we find-

Mr Berry: It doesn't make any difference. It just puts dollars in some people's pockets.

MR HUMPHRIES: Mr Speaker, I heard the other speakers on that side in silence, and I ask for the same courtesy in my case.

Mr Moore: That is because you were out of the chamber.

MR HUMPHRIES: I was out of the chamber for part of the time. Anyhow, I was silent. Mr Speaker, if we accept that that economic activity needs to occur, and I think we do, then we should support the means for it to take place.

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