Page 1776 - Week 05 - Wednesday, 2 May 2012
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of living impacts. Any assessment of cost of living should be made in the context of incomes, expenses and a range of indicators of financial stress. It should relate to everyday experiences and costs faced by households. The statement as proposed in the unamended bill will not take all of these factors into account.
The shadow treasurer’s proposed statement would include taxes that do not legally apply to households, such as payroll tax. Whilst it is understood that the incidence of taxation can vary significantly depending on factors such as market conditions, the legal and economic incidence of a tax can also be different. For example, a purchaser of a property is legally liable for conveyance duty. However, its economic incidence may fall on the seller or the buyer or a combination, depending on the state of the housing market. Estimating the amount incurred by a household for a tax that does not apply directly to it, such as payroll tax, conveyance duty and land tax, is almost certain to misrepresent its impact. Reporting on taxes that impact directly on a household will provide a more representative figure.
In addition, increases in living costs may be offset by concessions or driven by changes in consumption patterns. The statement proposed in Mr Smyth’s bill does not take these into account and does not provide a complete picture of government assistance. The ACT and commonwealth governments have a range of programs and concessions in place to assist with cost of living pressures. These include ACT public housing rental rebates, utilities concessions, and, of course, the entire raft of commonwealth welfare programs and family tax benefits. While it is straightforward to assess the impact of the ACT concessions, tracking that wide range of commonwealth programs is obviously a more difficult task. These programs, though, provide concrete assistance to eligible families and households.
To address these issues in the statement as proposed, I have moved the amendment circulated to the Financial Management (Cost of Living) Amendment Bill. The amendment requires that the budget papers include a statement about the effect on an ACT household for the financial year of territory taxes and fees that have a direct effect on the household and, importantly, territory concessions that offset these charges.
The statement proposed under the government amendment includes information on general rates, the fire and emergency services levy, utility fees, motor vehicle registration and driving licences, and public transport costs. These all impact directly on households.
I am sure members would agree that public transport is an important service with fares impacting on the household budget. This is particularly the case if there are children and young people attending school or tertiary education within the household. The shadow treasurer has indicated the statement will evolve over time, and the government does, indeed, agree with this. A less prescriptive approach would provide the flexibility to adjust the statement to include any further taxes and fees that impact directly on a household at some point in the future.
The amendment will build on existing financial reporting arrangements and provide verifiable information to the community. It is certainly evident from the amendment
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