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Legislative Assembly for the ACT: 2003 Week 10 Hansard (23 September) . . Page.. 3560 ..

MR STEFANIAK (continuing):

Key questions that were raised included: why should a community that had contributed millions to bushfire appeals be subjected to an additional tax? Would the tax be applied to those who had lost their homes? Would it be a progressive tax? If not, would it apply to low income earners? What about those people who had experienced damage to their homes and properties?

The notion of a bushfire tax was very much a shooting from the hip response. Even if it were a legitimate response, it should have been discounted when all the potential funding sources were identified. I also reject the suggestion that that tax should have been implemented in any event. That sort of suggestion comes from those who typically are not responsible for imposing taxes and who are not therefore concerned about the overall impact of taxation on a community.

I need to be careful in characterising the actions of the two ministers over the cost of the bushfires, but I think that an element of scaremongering can be seen in what they said. The reality has been that the actual impost on the territory has been much smaller than initially thought-indeed, a comment my colleague the shadow Treasurer has been making pretty well since the disasters occurred. The ACT did significantly benefit from insurance policies put in place by the previous government in about 1996 and 1997. I recall that very well, having had something to do with it at the time. Certainly the cost, thank God, was a lot less than what was bandied about to start with.

Each minister spoke about the need for increased taxes, apparently without being aware of the provisions of the Commonwealth government's natural disaster relief arrangements. I think that a more prudent approach would have been to acknowledge the magnitude of the disaster and been less dogmatic about the consequences of the disaster. I know that it might be difficult during times of extreme emergency to make comments that take account of all the facts and that are fully considered. Nevertheless, the end result of some inappropriate comments made by the Chief Minister and Treasurer in the early days has been that the ACT-our government and our community-has been made to look somewhat silly over the whole response to the fires in terms of finances, perhaps unnecessarily so.

Mr Deputy Speaker, I turn to the Treasurer's budget for the current financial year to talk about the proposed loan security duty or tax. The consideration of this tax has not turned out to be a fine example of public policy making, due to a mixture of sloppiness and laziness in research and approach. We were first informed of the loan security tax when the budget was brought down on Tuesday, 6 May. It is interesting to note the words used in budget paper 3 about the proposal. It was said that the proposed duty would "bring the ACT into line with the rest of Australia". That statement was incorrect, because the Northern Territory does not have that tax. We also read that "the ACT has become a haven for companies which borrow large sums of money without paying duty". It is apparent that this use of "haven"was pejorative, yet there was no evidence presented as to why the ACT should not be such a haven.

Why should we encourage these types of transactions? The Treasurer has not provided any analysis of the economic benefits that flow from such transactions. Indeed, evidence to the estimates hearings was that these transactions did not bring any particular economic benefit to the ACT. Where is the evidence? Moreover, the Treasurer has been

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