Page 1929 - Week 05 - Thursday, 5 May 2011
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important economic lever to create incentives and disincentives that will change behaviour. We need to be cognisant of this to get the full policy value out of not only our expenditure decisions but also our revenue decisions. We need a coordinated approach to industry incentives and taxation that fosters growth for local business in sustainable industries.
The Greens support the current ACT tax review and we look forward to considering the application of the Henry tax review recommendations to simplify the tax system and ensure that it delivers for the ACT. We should be looking towards a more stable taxation base that is less dependent on economic transactions and that fairly taxes production and business activity here in the ACT. Broad-based land taxes are almost universally recognised as more efficient than transaction taxes.
The change of use charge is the most controversial revenue issue in this year’s budget. Land is a major community asset that we have and the community should get a fair return for the rights that the community grants to use that land. A change of use or lease variation charge is payable on a gain for property developers that does not come about through their enterprise or initiative and belongs to the community. Recognising the value of the right being assigned is the only honest approach. The fact that the community chooses to forgo some of that to facilitate development does not mean it is a bad tax. If anything, the opposite is true, and the fact that it gives the opportunity to manage how our city develops is something that we should take advantage of.
It will of course come down to how much and of course those who will be liable to pay will be arguing for less. We have an obligation to act in the community’s collective interest and it must be said that the proposed phase-in appears reasonable and is a significant concession compared to the timetable proposed in the independent reports. The Assembly will be debating the detail of the scheme in the next sitting so I think it is sufficient at this stage to say that a balance can be found to ensure that we have a responsive scheme which also provides sufficient certainty for developers.
On the deficit, this year sees the last of the commonwealth stimulus measures, and it seems likely that commonwealth expenditure in the ACT will decline in real terms this financial year. The plan for the recovery of the budget appears reasonable. That said, it is important we create fiscal space so that we are able to respond to future challenges.
Just briefly on the stated fiscal strategy, we of course agree with the listed aims, and these are certainly sound principles used by most governments. However, the Greens’ view is that we need to be moving beyond these relatively simplistic aims to give our fiscal strategy a more integrated outcomes focus with meaningful indicators linked to tangible gains in our prosperity.
Again we have a significant increase in capital expenditure, and there are certainly a number of good capital initiatives, like the ICT upgrade. The Greens are, however, concerned that there remains little evidence about the long-term usefulness of some of the infrastructure spend or little recognition of the significant opportunity cost it comes at.
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