Page 3388 - Week 11 - Wednesday, 14 November 2007
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Over the coming years, as we all know, as a part of an intergovernment agreement preceding the GST, several business taxes will be abolished and not available to future governments. At the same time, serious pressures are making themselves felt. Just like the rest of the country, we are ageing. As a community, the ACT is ageing at a rate unequalled by any other city. Recently, reports have shown that ACT residents have overwhelmingly expressed a preference for improved services over tax cuts. The utilities tax will help us to achieve this goal and continue to deliver higher than average services in the ACT.
The tax revenue may be modelled in comparison to collections for other taxes, but it is sourced from a relatively stable base that is not prone to sudden or unpredictable market trends and, as such, the utilities tax is a reliable and predictable source of revenue. As far as taxes go, the utilities tax requires very little in the way of compliance by taxpayers, and, to the extent that the utility network owners are able to pass the tax on, it is spread over a broad base of utility consumers.
In terms of the taxation base, it is well recognised that the territory has limited capacity to raise own-source revenue, and the utilities tax is, indeed, one of the very few ACT taxes that generate revenue from a source other than property. We are very aware, of course, of the views of the Property Council in relation to property taxes. It is quite ironic, of course, that the Liberal Party in this place, which regards itself as one of the great champions of the Property Council, is attacking one of the few taxes, because of our narrow base, that is not based on property—namely, the utilities tax. I am not quite sure what the Property Council thinks of this foray by the Liberal Party today, but the tax that they are attacking is one of the remarkably few that actually are not imposed on property.
The Liberal Party have given indications, of course, that they have in their sights a range of other revenue measures. The fact that they have chosen one of the few that is not based on property, of course, puts enormous extra pressure to retain in place and, perhaps under Liberal regime, even to increase those property taxes they now they say they will remove. That will, of course, cause angst and heartburn.
We see already that there was something of a contest between Mr Mulcahy and Mr Pratt in relation to whether or not the first tax to be abolished should be the utilities tax or, Mr Pratt’s preference, the fire levy. Of course, Mr Mulcahy won out, and we see today that the Liberal Party has signalled that the first tax that it will abolish in government is the utilities tax. Mr Pratt’s preference was that the first tax to be abolished should be the fire levy, and he gave very explicit promises to that effect, which he has now been required by his leadership within the Liberal Party to resile from.
Mr Pratt: In your dreams, Jon.
MR STANHOPE: By interjection, Mr Pratt gives some indication that he has not given up.
Mr Pratt: I said, “In your dreams, Jon”.
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