Page 2897 - Week 09 - Tuesday, 19 September 2006
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Taxation revenue collected by states and local governments fell from 5.7 per cent of GDP in 2003-04 to 5.6 per cent of GDP in 2004-05. Between 2003-04 and 2004-05 commonwealth taxation revenue increased by 9.3 per cent.
Another way to measure relative taxation between states and territories is the ratio of taxation to the gross state product, the size of the state or territory economy. Comparing the ratio of state and local taxes to GSP puts the ACT at the second lowest level, above only the Northern Territory. The taxation to GSP ratio for the ACT is 3.9 per cent, well below the national average of 5.6 per cent.
The Commonwealth Grants Commission assesses the taxation effort of the jurisdiction in the context of its capacity. The ACT has a relatively lower capacity, as it cannot impose payroll tax on commonwealth agencies. The commission’s 2006 update on relative fiscal capacities indicates that the ACT’s own source revenue is on par with the average and lower than Western Australia, South Australia, Tasmania and the Northern Territory. Once again, the commission’s assessment does not suggest that the ACT is a high taxing government.
It is worth noting that over the coming years this government will abolish several business taxes.
Mr Mulcahy: That is because you are getting GST.
MR GENTLEMAN: Already a number of local taxes have been abolished in the fulfilment of the intergovernmental agreement. In coming years a number more are to be abolished. Under a schedule agreed with the federal Treasurer—that is agreed with the federal Treasurer, Mr Mulcahy—the territory will eliminate taxes that will see the government forgo approximately $21 million across the budget years, rising to more than $14 million a year once the final taxes are abolished in 2010.
From 1 July non real estate business conveyances have been abolished. Stamp duty on credit arrangements, instalment purchase agreements and rental arrangements will be abolished by next July. Stamp duty on non-quotable market securities will go by July 2010.
Most in the Assembly would agree that in the ACT we have a high standard of government services that need to be sustained. This government had to increase fees and charges to better reflect the real costs of delivering services. Without this action, this government and future governments would not be able to deliver and pay for the sorts of services that Canberrans expect and deserve.
Although fees for municipal services are increasing, the government is investing an additional $5 million per annum into providing additional maintenance for roads, bridges and stormwater infrastructure. In addition, the government has made significant investments in key service areas such as health, education and policing to the benefit of ACT residents. In being fiscally responsible, the government will continue to take action to ensure that the territory’s finances are put on a sustainable footing to ensure that priority and high standard services continue to be provided and that emerging service needs are met. This is a responsible government, Mr Speaker, responsibly managing.
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