Page 2141 - Week 06 - Thursday, 26 June 2008
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and, whilst I have said that every year, it is starting to raise real concerns about the capacity of Treasury to accurately forecast.
Their answer is: “We are not too much worse or we are about the same as everybody else interstate.” That is really not an impressive response as far as I can see when you are so far off the mark. The fact that you just say, “We might be hopeless but others are even more hopeless,” which is effectively what they are saying, when you get such incredible inaccuracy in the forecasting—
Mr Stanhope: Better than Peter Costello.
MR MULCAHY: I am not here to defend Peter Costello; that is their problem. But the fact of the matter is that I am worried about the ACT’s forecast. And what I am worried about is that the advice that the Chief Minister seems to be accepting uncritically is just so far off the money. He must wonder when they say, “This is where the bottom line will be at the end of the year,” and then, come the end of the year and they have made the various cabinet decisions, it is not even close to the mark. You have really got to start questioning the quality of the advice you are receiving if that is the case.
The only other scenario is the government in fact knew it would be a different outcome and was working towards an election war chest. We will not make sweeping assertions like that because they may not be accurate.
The real reasons for the increase in taxation have become clear. They were introduced to allow the government to continue its extravagant expenditure programs. Since the last budget, the government has been presented with a golden opportunity for serious tax reform through the windfall revenues that have occurred in the last year. Revenue figures from taxation have been substantially above what was predicted in the 2007-08 budget and this gave the government the opportunity to repeal some of the massive increases in taxation that it has imposed on the people of the ACT.
Since coming to power in 2001, the Stanhope government has increased taxes, fees and fines by over 66 per cent and this is more than 7½ per cent per annum, far above the rate of growth of the CPI, the WPI or the ACT economy. In 2008-09, general rates and charges will increase by the wage price indexation of 4.4 per cent and this will mean an average increase of $49 for residential properties, $21 for rural properties and $234 for commercial properties.
Instead of reversing these tax increases, the government has simply increased its spending. In fact, the ink was not even dry on the 2007-08 budget when the government rushed to put through a second appropriation bill to spend its newfound windfall revenue. Because of this the government has declined opportunities to repeal both the utilities tax and the fire and emergency services levy, both of which should never have been imposed in the first place and the repeal of which was quite within the capacity of the territory.
I am pleased to see the government have taken some minor action in this budget to reduce the massive tax burden it has imposed on the people of the ACT. They have committed to a stamp duty exemption for pensioners, changes to the property value
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