Page 2174 - Week 07 - Tuesday, 15 August 2006
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bewildered as to why they are being punished so severely here in this territory through the territory government’s budget. The Howard government is delivering the employment services and other assistance, including vocational rehabilitation, to successfully assist more unemployed Australians into the work force. If we want to talk about the local job market, the real point to understand here is that the strong economic management of the Howard government has in fact delivered record low unemployment and more than 1.8 million new jobs.
Why has this not happened in every other part of the world? It is because Australia has been prudently, sensibly and cautiously managed by a government that has had the reins under control since it took office in 1996 and has managed to wind back that massive level of debt that it inherited from the Keating government and his predecessor. All of us have stood to benefit from that economic prosperity in this country.
It was interesting that, in the last budget, the 2005-06 budget, $360 million was provided to assist the very long-term unemployed get back into paid employment. It is interesting that it is a Liberal government that is creating this employment and a Liberal government that is creating this prosperity.
It is the Stanhope government that is benefiting from the initiatives that I am citing here. Indeed, the territory has been probably the biggest beneficiary of the Howard government but, despite their contributions in the ACT, despite their contributions towards stimulating employment in the ACT, they are continuing to be subject to relentless attack from the Chief Minister and his colleagues on all manner of peripheral issues. The real issues that people in Australia care about are their jobs, their taxation levels and the like. Increasingly, people have come to realise that in fact it has been the federal government that has delivered them these benefits, and they are looking now with horror at the ACT government removing those funds and those gains from their after-tax position through various hikes in charges and rates.
It was interesting that in the recent budget Mr Stanhope claimed that, due to the dominance of the public service within the ACT labour market, the ACT had significantly higher per capita payrolls than the Australian average per capita payroll collections, due to the inability to tax the Australian government, contributing to the territory’s below-average capacity to raise revenue. This was the excuse for all manner of problems he is facing.
The fact of the matter is that the ACT government expects to receive grants of $1.2 billion, over $65 million more than its 2005-06 estimates, and this included compensation for deficiencies in payroll tax receipts. The reality is that the payroll tax rates that the ACT misses out on due to commonwealth government exemptions are more than compensated for by extra commonwealth grants that are received. Put simply, payments from the commonwealth take the place of tax revenue forgone.
If we are going to talk about economics, the simple economics of our situation suggest that over the years ACT government revenues have been more than sufficient, after taking into account its single-tier structure and its receipt of commonwealth grants. This territory government has been taking advantage of increasing GST revenues without holding up its end of the bargain by reducing taxes and charges.
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