Page 1564 - Week 05 - Thursday, 11 May 2006
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nor Mrs Dunne want to know about the most important subject of relative taxation levels within the ACT? Why do you not want to know the truth of the matter?
Mrs Burke: Let’s hear the truth.
MR STANHOPE: It gets down to truth, I suppose, doesn’t it? Let us hear the truth. The truth is a subject that does require some airing and some discussion in this place, and by some within this place. If one were to wonder why it was that Mr Mulcahy might assert that we had the highest taxation levels or rates within Australia, one would be forced perhaps to conclude that he had borrowed Mr Smyth’s guide to politics, the rules of Liberal Party politics for the ACT.
MR SPEAKER: Order! Come to the subject matter of the question.
MR STANHOPE: There are some hints, though, to be gained from that Liberal Party rule book. It is important that we do put the lie to these allegations that we are the highest taxing regime in Australia. We are quite clearly and palpably not. As I said, and was in the process of saying, the ACT takes relatively less tax per person than it did in 2000-01. In 2000-01, under the last year of the Liberal government, we were the third highest taxing regime in Australia after New South Wales and Victoria. In fact, as I was saying, the Liberals taxed at a per capita level of over $270 higher than the national average.
Over the four-year period since Labor took office in the territory, the ACT has had the lowest increase in taxation revenue of state and municipal taxes of any state or territory in Australia, at nine per cent. Taxes in the ACT under this government have increased by nine per cent in the period of government, against taxation increases in every other jurisdiction of between 11 per cent and 43 per cent, with a national average of 22 per cent. In the ACT, we have increased taxation at the rate of nine per cent against the national average of a 22 per cent increase, including 24 per cent at the commonwealth level and up to 43 per cent in other states and places.
The Commonwealth Grants Commission also assesses taxation effort of a jurisdiction in the context of its capacity to raise tax; that is a different measure from the one published by the Australian Bureau of Statistics. The ACT has a relatively lower capacity as, of course, it cannot impose payroll tax on commonwealth agencies. The grants commission takes that into account in its deliberations on this. The Commonwealth Grants Commission’s 2006 update, this year’s update, on relative fiscal capacities indicates that the ACT’s own source revenue is on a par with the average at 100.27 per cent, and lower than Western Australia, South Australia, Tasmania and the Northern Territory. Once again, the commission confirms the Australian Bureau of Statistics assessment that the ACT is not a high-taxing government. Once again, assertions that Mr Mulcahy has made cannot be sustained. They are wrong.
A measure that economists generally use when comparing taxation is the ratio of taxation to gross state product, the size of the state/territory economy, noting once again that we cannot tax the commonwealth. The taxation to GSP ratio for the ACT is 3.9 per cent, well below—one-third below—the national average of 5.6 per cent, and the second lowest in Australia after the Northern Territory. That is a third measure of comparative taxation effort and revenue gathering that proves that Mr Mulcahy was wrong.
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