Page 1365 - Week 05 - Tuesday, 5 April 2005
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view—and I have heard it now several times—that if you help business, there is no benefit to the rest of the community.
It is a fundamental failing in this government’s understanding of economics to divorce the buoyancy of business in the territory from the wellbeing of the people. There is no question whatsoever that, if business prospers in the ACT, they will employ people. People in business do not hoard money and say; “Well, that’s terrific. That’s a windfall we won’t spend.” They employ people, they become more productive, they generate better profits, they pay more taxes and they spend. That is what business people are about. You do not go into business simply to do nothing. So it is incumbent on governments to create an environment that is positive for business and not to burn them with crazy taxes involving more paperwork than gain. I take strong exception to the point of view advanced earlier today and on a few other occasions that stimulating business is not supportive of the economy. It is not a view, frankly, that I have heard coming even from many on the Labor side.
The states and territories signed the intergovernmental agreement back in 1999. A raft of taxes went. Wholesale sales taxes on petroleum, liquor and tobacco were abolished. Bed taxes were abolished and, from July 2001, financial institutions duty and stamp duties on marketable securities were abolished. The ministers agreed to abolish debit taxes from 1 July 2005, although their friends in New South Wales managed to beat the other states out of the starting blocks by abolishing debit taxes on 1 January 2002. Other states were listed for review. There was no formal decision on a timetable to abolish those taxes, but they were to be reviewed at this time. These include taxes on hiring arrangements, leases, mortgages, life insurance and business acquisitions.
Through recent weeks we have seen the ACT’s battle on this issue, this alliance that was blindly formed with New South Wales. I find it intriguing that when the Treasurer was away in the Middle East on his business mission, his colleague the New South Wales Treasurer made statements to the effect that they wanted to reduce what the ACT was getting out of the pie. They are not our friends and they are not the friends of the ACT community. But we are told that it is in the interests of the world that we get alongside New South Wales. New South Wales wants our cut of the action and I am staggered that the territory government is putting party allegiances ahead of the territory’s interests by simply lining up with Dr Refshauge on these matters.
Mr Quinlan: Didn’t you read the next day’s paper?
MR MULCAHY: I did read your statement, Mr Treasurer. I find it extraordinary that party discipline is compelling you to line up with your colleagues interstate even if it means that the ACT gets a smaller cut of the pie, which will, of course, only add to your pressures in balancing the books.
There are other initiatives that the ACT should look at. We should look at making modifications on payroll tax. I remember that the Business Coalition for Tax Reform urged reform on the federal Treasurer. In fact, he resisted that. But, of course, with the windfall gains that the states and territories have had, they could have actually made changes. The states and territories have been big winners but, sadly, they have lost the opportunity, particularly in the ACT, to benefit from that. Now they are saying, “We need more money and we cannot afford to make any reductions in those tax levels.”
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