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Legislative Assembly for the ACT: 2003 Week 12 Hansard (19 November) . . Page.. 4326 ..

MR QUINLAN (continuing):

size of and the accoutrements in a house might change. He is suggesting a substantial decrease by shifting the thresholds. Typically he did not say by how much. He did not recognise, I do not think, that the housing market may soften, and should it soften then revenue would decrease anyway.

But the major flaw in the Smyth thesis, repeated I have to say a number of times in recent months, is the assumption that overall costs are the determinant of house prices. That ignores market forces. That ignores supply and demand. I think they are in lesson 1 in economics 1.01-supply curve, demand curve, price point.

If you do not believe that, if you think somehow cost influences the price of housing these days, just look at the first home owners grant where people were given $7,000 and $14,000. Where did that go? As I have said in this place before, that went onto the price of housing; that went to the sellers. Should that not be some indication to Mr Smyth, who would be Treasurer, that maybe it is the market that is determining the price of houses and not the cost structure?

So what comes out of this debate? I will tell you what comes out of it. Mr Smyth got his name in the paper and in the electronic media, and I suppose that was the primary objective-we have descended a little in standards in recent times. But it also exposes Mr Smyth's shallow thinking. In government, Mr Smyth would set long-term objectives, long-term expenditure levels, based on the good times. This territory cannot afford that sort of shallow thinking. The territory cannot afford commitments for immediate gain, immediate exposure, without any thought to the long-term impacts. That thinking is dangerous.

This government will keep an eye out for revenue streams, their fairness, how they are applied and the actual reasons for their movement through time. We will not be involved in the shallow thinking of the Brendan Smyth variety.

MR HARGREAVES: Mr Speaker, I ask a supplementary question. Treasurer, is there any assessment of the impact of Mr Smyth's proposal on the budget bottom line?

MR QUINLAN: Thank you, Mr Hargreaves. As I said in the answer to the original question, it is a bit difficult to do so because Mr Smyth was typically non-specific. He is just gunna do something. But if you moved thresholds by $100,000 you could have-it would depend on how you do it-maybe $25 million; maybe $50 million if you moved the thresholds even more.

The word "substantial"was used a couple of times in Mr Smyth's press release, so I am assuming that he wants to make some substantial change. So, Mr Smyth, I will put you down for $50 million. Let me advise you that the recording of that on the spendometer has commenced. We have got a few other items like the Convention Bureau funding of $200,000 and tourism of $12 million. Mr Pratt was out in public saying that he was going to increase the number police officers, dogs and horses. I think that was out of future economic growth, so we have not costed that one yet.

While you were not looking, while you were on the honeymoon, Bill spent $8 million on the dragway. So, Mr Smyth, just to keep you up to date, in your first year, not counting Mr Pratt's commitment, you are over $70 million. But we will be counting.

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