Page 1243 - Week 04 - Wednesday, 9 April 2008
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manageable. And of course it is. I am quite sure, as I saw after the second appropriation last year, that as soon as more money comes in the first response is not to hand it back to the people but in fact to increase outlays. It is very easy to increase the spending but there is a great level of discomfort in reducing taxation, especially if it is not the government’s initiative and it is not proximate to an election.
The utilities tax has not been well received. Someone close to or within the realm of the territory government described it to me last week as being nicknamed the unfit tax. They said it is a horrible tax. I understand that. The Chief Minister can tell me I am wrong on this if he wants to, but I was reliably informed that there was pressure on Actew by the ACT Treasury in fact not to disclose this on consumer statements when this first came in and that there were cross words between the department and that corporation.
The fact of the matter is that, as the Chief Minister said, it is appearing on accounts. Of course it is appearing on some accounts now. It is not appearing on Telstra accounts. You might not have a lot of sympathy on this. I read the Chief Minister’s comments when he brought it in that this is only about 10 per cent of Sol Trujillo’s salary. I would not mind if Sol Trujillo was the one who paid it, but I suspect the poor mug customers of Telstra are the ones who are going to wear it, not Sol Trujillo.
However, at this point Telstra do not appear to have corrected their billing system. It has obviously presented them with some significant problems and, as a result, they must be absorbing this charge, which does speak to some of the issues it presents, when a territory or a state comes out with a unilateral measure of this nature, that it is in fact not reflected across the tax regime of other jurisdictions.
I have a few other comments to make on this particular matter. As was noted, the tax was introduced in the horror budget of 2006-07. At the time, the budget forecast a deficit of $123.7 million. As I said earlier, we are now expecting a surplus of $116.1 million. A few of the hints that have come out in the last week suggest there might even be more to play with when the next set of accounts is made public.
The Chief Minister introduced this tax after failing to forecast the direction of the ACT’s budget position. He might not unreasonably put some of this back on Ted Quinlan, although the word was that Ted Quinlan was always trying to stop spending and gave up in the end. I do not know where the facts lie on that. We now know that position, yet he refuses to relinquish his extra revenue.
It is simplistic to say, as the Chief Minister has in his media releases, that tax reform comes at the expense of spending on core services. If you put this into perspective, repealing the utilities tax would cost $16.525 million this year and, when you see that in the context of a surplus of $116 million, of course it is achievable to make this reform without long-term adverse impacts on the ACT accounts.
Mr Barr: In the forward years—
MR MULCAHY: Even in the forward years, Mr Barr. I have looked at those, too, and it is still manageable within the forward projections on the accounts, many of
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