Page 194 - Week 01 - Wednesday, 15 February 2012
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So Mr Smyth is wrong in his assumption and wrong in his statements on ABC radio this morning. Any economist worth their salt knows that—in fact a number of them contacted me this morning to say what rubbish was being spouted by the shadow treasurer—and the basic misunderstanding of those concepts was alarming from someone who wants to be the treasurer of this jurisdiction.
In relation to the other elements of revenue that are variable, the cyclical nature of the housing market is indeed one—
Mr Smyth interjecting—
MR SPEAKER: Mr Smyth!
MR BARR: The government, through its tax policy settings, seeks to raise revenue to deliver services to the people of the territory. Revenue will vary from year to year, and in this instance some revenue lines have decreased.
MR SPEAKER: Now your supplementary, Mr Smyth.
MR SMYTH: Thank you, Mr Speaker. Treasurer, how is it possible for you to describe the reduction in GST revenues as temporary when the ACT’s GST relativity is being reduced from 1.27 in 2009-10 to 1.12 in this financial year and 1.05 in the 2014-15 year?
MR BARR: It is not. Mr Smyth is wrong on that point. He knows he is wrong, or I hope he knows he is wrong in making that point. He may be correct about the relativities from 2009-10 to 2010-11 but the future projections are not accurate. It is not correct for him to say that our relativities have been adjusted, because that has not occurred. Equally, the shadow treasurer should be aware that the size of the GST pool can vary from year to year and he should also be aware that in making calculations about the relativities you cannot assume that all things remain equal in all other states and territories.
The debate that we are having as a nation at the moment, particularly in relation to the changed circumstances in Western Australia and the continued reduction in their relativities, goes to the revenue-raising capacity of that government. There will be various changes in the other states and territories that will impact on the ACT’s relativity over time.
This assessment is undertaken by the Grants Commission. It is not one that is interfered with by politicians. The outstanding amount of ignorance that has been displayed by the shadow treasurer is a real worry for the people of the ACT if he believes that this process can be distorted by politicians.
MRS DUNNE: A supplementary question, Mr Speaker.
MR SPEAKER: Yes, Mrs Dunne.
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