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Legislative Assembly for the ACT: 2004 Week 02 Hansard (Thursday, 4 March 2004) . . Page.. 733 ..

In relation to equity, we concluded that achieving equity in the impact of revenue-raising measures should be a fundamental objective. An important part of achieving equity is minimising avoidance, and where possible revenue-raising measures should be progressive in their application.

In terms of efficiency, we concluded that the ACT, as a small jurisdiction, is not likely to have the economies of scale with respect to the administration of taxing measures that other jurisdictions do. Consequently, some revenue-raising measures that lack efficiency, such as stamp duty, could be replaced wherever possible.

In relation to certainty and sustainability, we concluded that there are issues related to sustainability in raising revenue in the ACT and that the limited availability of land and the relatively high dependence on land-related revenue-raising measures in our revenue mix are of concern. There are also important questions about the methodologies adopted by the Commonwealth Grants Commission because of the implication of those methodologies for funding provided to the ACT, particularly with respect to such matters as the cost imposed on the ACT of being the nation’s capital. I think we all saw the reports yesterday indicating that there is potentially a reduction earlier.

The committee came up with 16 recommendations, and I will run through them quickly, Mr Speaker, because all merit consideration. First, in recommendation 1, in regard to the revenue that flows to the states from the GST, we believe it is important that we look at the real potential for the increased revenue to flow, particularly given that over a number of years the estimates that have appeared in budgets have been very inaccurate. We have to be clear about what it is that the GST means to the people of the ACT. That also means that you can look at the adequacy of compensatory measures that are put in place to offset the effects of the GST. That is very important if we are to achieve equity.

Recommendation 2 looks at the next stage of tax reform in this country given that, under the intergovernmental agreement, there was the potential to abolish certain other revenue-raising measures. That is due in about 2005 and we would be urging the government to assess whether there is the potential to remove some taxes as the revenue from the GST increases.

I have already looked at recommendation 3—that we do more to educate the public on revenue raising and how we spend revenue. Recommendation 4 is particularly important, and it goes as follows:

Without compromising social considerations, the Government review those tax lines which have been assessed by the Commonwealth Grants Commission to be below the average revenue raising effort with a view to improving the ACT’s overall revenue raising effort.

This is important and it is linked very closely to recommendation 12, which is about gambling. What the Grants Commission has done is say, “This is what you should be able to raise from these sorts of revenue and we think you ought to make sure that you get 100 per cent of it.” The committee has some grave concerns about the fact that one of those lines is gambling. What the Commonwealth Grants Commission seems to be saying is, “Yes, get more out of gambling,”—out of people who have a problem with

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