Page 1181 - Week 05 - Wednesday, 30 May 2007
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the abolition of timetables and would consider alternative tax reform reductions of equivalent value.
The federal Treasurer is being disingenuous on a number of fronts. He claims to be motivated by a desire for reform by reducing inefficient taxes which place a burden on business. However, it is clear that he does not really care about which taxes are reduced as long as he can claim for himself a reduction in state taxes. At the same time, he is the highest taxing Treasurer in the history of Federation. Instead of returning that tax to the community, he has hidden it away under the spurious pretext of a future fund. The states and the ACT have categorically met the requirements to review the IGA taxes and, given the growing pressure to deliver more services in the areas of health and education, are not in a position to remove additional taxes at the Australian government’s request.
Let us also not forget that this federal government unilaterally took from us approximately $5 million in annual funding for corporate affairs compensation in 2005-06, a payment that all other jurisdictions continue to receive to this day. Moreover, this federal government in 2006-07 abolished national competition payments worth $14 million each year to the ACT, even though the cost of those reforms are still being met by the states and territories and the benefits are being reaped by the federal government.
The territory’s small size and narrow economic base limit the government’s capacity to seriously influence and assist business activity and economic opportunities. This is not to say that the government is not responsible for good economic management. The ACT government therefore focuses on creating an environment that is conducive to doing business.
With the government’s good economic management, the ACT has experienced a strong economy which provides many positive outcomes for the ACT community. Some of these are higher standards of living and general wellbeing, not just more jobs but higher wages and greater job security, reduced demand for welfare related services with associated less pressure on social providers, and increased private investment as business and household confidence flows through the economy.
There is clear evidence to support the claims of a strong ACT economy. One of the best overall measures of the health of the ACT economy is state final demand. It describes the level of private and public spending in the ACT and is currently growing at well about its long-run average. To reinforce the progress we have made, at the time of Labor coming to power in 2001, annual demand was growing at just 0.3 per cent. Since then, state final demand has grown by 36 per cent, outstripping national demand growth of 29 per cent and New South Wales demand growth of just 20 per cent. Fortunately, the source of this healthy growth has not been confined to any one segment of the economy. Contributions have largely come from the consumption spending by households, consumption spending by the commonwealth government, and private investment spending in non-dwelling construction.
Growth in certain areas of the economy is also having flow-on effects to other areas of the ACT economy. Rising ACT incomes and good employment prospects are stimulating consumption spending, leading to the influx of new retailers, the
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