Page 2887 - Week 09 - Tuesday, 19 September 2006
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What is the key driver that is likely to impact on this economic activity? Obviously, it will be discretionary spending. The government needs to understand that people’s incomes will not be rising to meet these newly imposed taxes and charges. Canberrans quite simply will have to make do with less.
The first items to go from household budgets will be the discretionary items of expenditure. It is the fundamental economic problem. Households cannot cut back on their essential needs such as petrol, groceries—which are going up above the rate of inflation—utilities and rent. But when it comes to the so-called luxury or discretionary items, these are expendable and, reluctantly, will be the first to go. Families are already suffering from exorbitant fuel prices and have been experiencing progressively higher interest payments.
When you combine these drains on the household budget with a raft of new tax measures, then it is inevitable that there will be cutbacks on individual spending. It troubles me that the next wave of instalments on rate notices will hit in mid-November. This will be as families are preparing for the Christmas period. I do not know where these additional funds that the Chief Minister expects people to find to meet the substantial increases in taxes and charges that are well above the inflationary figure are going to be sourced.
We should no longer be under any illusion in relation to this government’s taxes, fees and charges. They are a fact of life. I understand that. I understand we have a budget that has been passed, but it is certainly the view of the Liberal opposition that it is not an area that we should accept. We are going to continue to champion the cause of the people of our community who are suffering as a result of this ill-considered range of charges.
It is an unavoidable reality that Canberrans will now have to sacrifice more of their discretionary income to cover the increased costs of living in Canberra. What will be the burden and impact of ACT government taxes and charges on the people of Canberra? It is quite difficult to know the exact dollar amounts for sure, as new levies such as the utility land use permit may or may not be passed through to consumers. But one thing is certain: the new set of taxes, fees and levies that have been increased or introduced in the budget will mean that Canberrans are worse off financially.
The reason why this is happening is very clear. It is because the government has not been responsible in its handling of the territory’s financial affairs. It has resorted to extreme measures in order to get its budget back on track before the next election in 2008. Sadly, the position was forecast last December in the credit assessment report by Standard and Poor’s. I think that, with the departure of Mr Quinlan, it has descended on the Chief Minister like a ton of bricks when he in realised that his government had to take radical and dramatic steps. He certainly concedes that.
The issue we have on this side of the house is why did it take four years? Why did it take an independent assessment agency to force this government to take measures that were absolutely required as a precondition for retaining the credit rating of this government? I cannot overstate the significance, I believe, of the independent assessment. I had the opportunity, along with my colleagues here, to talk about that issue only two weeks ago in more depth with the agency concerned.
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