Page 475 - Week 02 - Wednesday, 5 March 2008
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Treasury—figures which have now been shown to have been substantially underestimated. The utilities tax applies to the infrastructure for utility providers and therefore penalises any further investment in infrastructure. Much of the cost is passed on to consumers, resulting in higher costs for water, electricity, gas, sewerage and telecommunications services in the territory.
Because of these costs being passed on, the utilities tax has been a substantial imposition on Canberra households. According to the Treasurer’s answer to a question on notice in May 2006, the average cost per household from the tax will be $131 in the 18-month period since the tax was introduced in January 2007 until the end of the current financial year.
The reform I am proposing is a modest tax reform. It is not a radical proposal by any means and would merely remove one of the taxes that this government has introduced unnecessarily in recent years. The utilities tax is forecast to generate $16.5 million in revenue in this financial year. This amount is less than 10 per cent of the enormous budget surplus that the government is forecast to achieve from its continual increases in taxes and charges over the last few years. The repeal of the tax would go some small way towards restoring sanity to the current ACT tax regime. If the government were really serious about its previous argument that tax increases were needed to balance this budget, it would now be looking to repeal those increases in light of its enormous revenue windfalls.
Despite its previous obstinacy, there is some sign that the government finally may be starting to take this issue seriously. On 15 February this year, following the release of the December quarter financial report, the Canberra Times reported that the Chief Minister had hinted that he may wind back some of the tax increases imposed by his government and that there was capacity to do so within the budget. He was quoted as saying that “it’s an option that we can realistically explore”. Indeed, some of his comments in question time yesterday reaffirmed that that option is very much now on the table.
The bill that we are considering today would not relieve ACT residents of the tax increases imposed on them in the 2006-07 budget. It would repeal only a small part of the taxes and tax increases introduced in that budget. However, it would provide some relief to the people of Canberra on their utility bills and allow them to gain some autonomy from their government. In fact, it would be a tax reduction enjoyed by every household in the territory.
Despite higher and higher tax revenues and consistent underestimation of its revenues, the government have repeatedly argued against any reduction in taxes, claiming that the money is required for government services. This argument has become increasingly strained as the government’s own financial reports have shown a large war chest of revenue resulting from their tax increases. What was needed, and what is still needed, is a commitment to improve the efficiency of government services rather than a reliance on the bottomless pit of taxpayers’ wallets.
The government is committed to increasing the size of government in the ACT. This government has shown a strongly engrained big government mentality and,
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