Page 2617 - Week 08 - Thursday, 24 August 2006
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charges at a level that is designed to give the government more money. In fact, it is unfair and is not typical of the way in which people’s incomes grow. To my knowledge, there would not be a government in Australia that would be game to do that. I have talked to federal colleagues about this. They think it is a grossly unfair initiative. They do not believe any political party should do this sort of thing. I think we will see a lot of people hurt.
As we go down the track, I will be looking at the rate at which default occurs in relation to territory charges. It is most significant in that regard that just a year ago—and that question is avoided—this territory had about $15 million owing to it in relation to a whole range of fines, fees and the like. Here we are a year later and that is up to around $22 million. There are only two, or there could be three, reasons why that would be happening.
First of all, the rate of fees has increased dramatically: well, it is just starting to increase now, so that is not a convincing argument for the value of that increase. The second reason would be that we have dropped the ball in Treasury, whose budget we are now debating, in relation to the effectiveness of their collections. That may be the case. I do not know. I remember asking Mr Quinlan in estimates whether the people responsible for the collection of outstanding fees and fines were going to be subject to the same cutbacks. He said no; that they were untouchable. They were off-limits because they bring money into the territory.
I am assuming that that area has not suffered the chop as other areas either have done or will do. I can only assume one other economic factor will come into play—that is, capacity to pay. I think that figure is going to blow out further. The Treasurer said in public comment that I was going to have everyone lined up against the wall for not bringing their library books back on time. The component of fines relating to library fees was in fact $1 million last year out of the 15. So there is a lot more to it than people not bringing their books back to the libraries Nevertheless, $1 million is a lot to be owed. There is clearly a need for a better system to be put in place.
I am concerned that there is a lot of hurt in this. I raised the issue of WPI with a witness, Mr Craig Sloan, who is chairman of the Canberra Business Council as well as being a well-recognised accountant. I asked him if he was aware of any other jurisdiction—state, territory, local or federal—that uses WPI as a method of increasing charges. He answered as follows:
I have no idea why the WPI would be there. In the current climate, and as history would have it, there is no doubt that the WPI is by far a higher rate than the CPI. Obviously it loads up the rates, the income and revenue coming back to the ACT government, at a greater level than the CPI would do.
Chris Uhlmann of the Canberra Times believes that the switch to WPI means that a rates charge of $1,000 this year will result in a cumulative difference of $729 to a household over 10 years. That means that, under WPI, Canberrans will be $729 worse off than under CPI. You have to realise that we are talking about net figures before tax. Depending on what position you are on in the tax regime, you may have to earn as much as almost double that figure to simply get, at best, what you have in services—probably less, but certainly no improvement in the level of services.
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