Page 1590 - Week 05 - Tuesday, 31 March 2009
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• Utility land use permit of June 2006: ultimately this was called the infrastructure tax. The Stanhope government sought to impose a utility land use permit as a charge on utilities where they occupy unleased territory land. It was estimated to raise $16.5 million in a full year. As the latest in a long line of taxing proposals that either had to be abandoned or had to be modified before being imposed, this permit proposal became the network facilities tax after consulting with the utilities companies such that it would impose a lower administration burden for the utilities. The tax became more in December 2006.
• Fire services tax: I will stop at this one because the list just keeps going on. This tax was imposed as a fixed amount on residential properties—it was imposed as a proportion of the UCV on commercial properties; hence it becomes a major impost on business—and is only expected to raise $20 million.
The sad reality of this history of poor taxation proposals is that many of them were raised by the Stanhope-Gallagher government at a time when the ACT government was booming. The tragedy that will be left out of all debate by the government today, and any day, is that the Stanhope-Gallagher government have squandered significant windfall gain that could have helped prepare the ACT to withstand economic shocks. It was frittered away. They have squandered the good times and failed to diversify our economic base to a point where we now have to rely solely on taxes.
The period between 2001 and 2008 was a time of economic boom, largely on the back of sound economic policies emanating from the Howard government that delivered a sustained run of economic prosperity to Australia. This prosperity provided enormous gain to the ACT in the form of additional revenue totalling $1.6 billion. What did the community see from that windfall? What did the community see from that windfall? They saw schools closed, libraries closed, swimming pools closed and higher and higher taxes. This is, indeed, a sad legacy.
It is also instructive here to point out the reforms to taxation that were agreed to by the commonwealth and the states when GST was introduced. We are all aware of the so-called nuisance taxes, which were to be abolished after July 2000. We also recall that the BAD tax was abolished by all states quite quickly, but all states had to be dragged kicking and screaming to the point of agreeing to abolish all but one of the other taxes that were listed on the GST agreement. Fortunately, all states have now put in place a schedule to remove all those remaining taxes, except for the duty on commercial property conveyancing.
It is sad to report that South Australia has now reneged on this agreement. On 19 December 2008 the Premier of South Australia announced that the proposals on two measures would be deferred for two years. While it is possible to understand this decision, it is not a good decision. Tax reform is too important. Let us hope that no other state, including our own, makes the same decision as South Australia.
Not only have we not seen any diversity of the ACT’s economic base, but employment shares have started to move back in favour of the public sector. This is evident from the Access Economics report into the economics of the ACT. Evidence
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