Page 642 - Week 03 - Thursday, 15 March 2007
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The government of this territory has been similarly inventive. They have observed that their reckless spending put this territory into massive deficit, but, instead of reducing their spendthrift activities, they have simply invented a way to keep going, a very simple way, and that is to take more money—to take, take and take more each year from the pockets of ordinary Canberrans.
The ACT government has introduced a raft of new taxes. We were told as a community that with GST would come the abolition of a number of state and territory taxes and charges. We were told that, with this growth tax which the states had asked for, the pressure of new tax measures on the Australian community by the state governments would disappear. But this territory has been ingenious in copping the GST, which is increasing, which is being paid by this community, and simply is being handed over by the commonwealth. They have decided they want to supplement that further and extract more dollars out of this already hard-hit community. General rates have risen substantially. This has resulted in a slug to the finances of Canberra home owners. Renters are also most likely to be hit as property owners pass on these increased charges.
Apparently these are the actions of a government that like to wax lyrical about their concern over housing affordability. On the one hand, we hear all these proclamations about housing affordability, but in the same breath we are seeing the territory government on a host of fronts, not the least being in the area of taxation, compounding the cost of people keeping their own home or people who are renters or people wanting to enter the market.
The government has also moved to index future increases in rates by the wage price index, rather than the consumer price index. This will see rates increase at a quicker rate, ensuring that higher rates will become automatic under this government. They will not even have to think about it; the rates will be going up. It reminds me of the rather ingenious way in which excise was tackled at the commonwealth level.
When I was very young the budget was an annual event. Everyone at home would sit around and hear the budget announced. You would pick up the paper the next day and cigs would be up by x cents, beer up by x cents and so forth, and people would reel with horror at these increases. Then the geniuses said, “The best way to take this off the front page of the paper is to just keep ratcheting the indexation arrangement up and it will not attract much media interest at all.” It is great for governments that want to keep dragging in more money and not concern themselves with the impact on communities.
Similarly, the geniuses in Treasury who have come up with this wage price indexation system know that not only is it going to bring in substantially more over time than the CPI increase, but it will not draw the immediate attention of people as an annualised event. The effect is that not only will it go up at a faster rate than CPI; it will also compound the increases, which will see rate increases at a quicker rate, ensuring that higher rates will become automatic under this government. Indeed, it will simply ensure that the rate of taxation increase moves further and further ahead of the rate of inflation.
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