Page 1587 - Week 05 - Tuesday, 31 March 2009
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confidence indicator for the ACT sits at seven per cent, down from 16 per cent last quarter.
The economic downturn, including the general economic outlook, weak economy and vulnerability to global US economic conditions, is the main reason ACT businesses are worried about their business prospects. This can also be evidenced by such economic indicators as conveyancing revenue, which, as at December 2008, is down by $23 million in this financial year alone.
The public sector is also coming under pressure, as we have seen from the continual revisions to the budgetary outlook for this financial year and the outyears. The midyear review that was released on 23 September 2008 showed an aggregate net operating balance of around $300 million between now and 2011-12. This briefly sets out where we are now. However, the critical issue is: why are we where we are now?
We know that revenue for the ACT is generated from three broad sources: firstly, the commonwealth government; secondly, the general level of economic activity and, lastly, taxation revenue. Revenue from the commonwealth is now out of the control of the ACT and is predominately represented by revenue from GST. Revenue from the general level of economic activity is partly out of the control of the government as the private sector makes its own decisions about investment, employment, the purchase of goods and services and other factors. Of course, the private sector also is influenced by the policy environment set by the government.
This brings us to the third source of revenue—taxation. Taxation revenue is the outcome of decisions made by the ACT government, and it is this area of policy that has exemplified the failings of the Stanhope-Gallagher government. Again, we are in a position where we must expose the weakness of our current Treasurer as she blindly stumbles her way after those who have gone before her.
The tenure of the Stanhope government is littered with failed and very poor taxation proposals as this government has sought to rip more and more funds out of the Canberra community and out of the business sector. The philosophy of the Stanhope-Gallagher government towards taxation is best exemplified by former Treasurer Quinlan when he told the ACT’s business community in March 2005 that his government would squeeze investors until they bled, not until they died.
This statement from the then Treasurer led to outrage from the business community which was entirely justified. The Canberra Times on Saturday, 19 March 2005 reported on this affair:
ACT Treasurer Ted Quinlan’s remark to real estate agents … that the Government would squeeze the investors until they bled, not until they died, has provoked outrage from the industry and Opposition.
Mr Quinlan apologised yesterday if anyone was traumatised by his remark, which he said was meant as a joke.
The Opposition wants more of an apology, the Property Owners Association wants his resignation and the real estate agent who triggered Mr Quinlan’s comment wonders if he knows the extent of opposition to land tax in the ACT.
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