Page 854 - Week 03 - Thursday, 30 March 2006
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I know we have got good economic figures. I did not hear the Chief Minister yesterday give any concession or ground whatsoever to anyone having anything to do with this other than himself. But, of course, we have been fortunate that the federal government have been able to expend substantial amounts in the territory, creating significant numbers of jobs in the defence sector, and that has led to housing demand, both within the territory and the region. It is a pity that we do not give some credit to that aspect of the economy. They do contribute substantially to employment, to the arts and to the infrastructure of the territory, and that has contributed to the position of the ACT.
But our lack of growth in population is a matter of serious concern. The government has argued that, since the ACT is surrounded by New South Wales, taxes in the ACT should be brought into line with New South Wales. As a result, we rank with that state as the highest taxing jurisdiction in Australia. When we look at the head tax figures paid by people of the ACT, we are really getting it in the neck. I would suggest that, rather than slavishly following New South Wales, we should set ourselves apart from other states and territories. Tax reductions should not be seen as a handout to business but, rather, removal of impediments to investment, job creation and the attractiveness of Canberra—and the GST certainly was intended to give us the opportunity to do just that.
The bill does contain some transitional antiavoidance provisions, which expire after five years, to counter transactions that the executive might deem designed to defer or avoid duty. The antiavoidance measures are designed to thwart attempts to avoid payment of duty prior to 1 July 2006 by methods such as options or any other action that the executive believes is not adequately covered by this bill. I have no issue with ensuring that people cannot sidestep their obligations with respect to the ACT taxing arrangement.
The scrutiny of bills committee has commented adversely on these antiavoidance measures. Specifically, it is critical of clause 14 of the bill, which confers powers on the executive to modify the act in order to catch anyone who might otherwise be able to slip through the antiavoidance net. Although any change made by the executive may ultimately be subject to disallowance, the scrutiny of bills committee warns that conferring such powers represents a transfer of the law-making role from the legislature to the executive. This should be avoided because it undermines the principle of the separation of powers; the Chief Minister has spoken on that previously and would be aware of that principle, and obviously is.
No doubt the Chief Minister/Acting Treasurer will argue that since no duty applies after 1 July 2006 there is only a three-month window during which duty avoidance schemes could be used—for that reason I was reluctant to propose amendments and decided not to—so it would not be practical to require the executive to come back to the Assembly, after having discovered a new loophole, with a new measure to close it in the three remaining sittings of the Assembly before 1 July.
The opposition acknowledge there is a trade-off here between the principle of not allowing the executive to usurp the law-making role of the legislator and the practicality of implementing an effective antiavoidance message in time to stop loss of revenue from tax avoidance over the next three months. However, given that the potential scope for avoiding duty will cease on 1 July 2006 because no duty applies after that date, I would be grateful for the Treasurer’s explanation for why the transitional antiavoidance
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