Page 2856 - Week 07 - Thursday, 7 June 2012
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So while we see the merit in the fiscal position adopted in this year’s budget, the Greens are disappointed that some of the expenditure decisions have not been more strategic and have not taken the opportunity to better set ourselves up for the inevitable future challenges.
The other story in the budget is the changes in taxation. These are a significant part of this budget and, in contrast to the more business-as-usual approach to spending decisions, they are very significant reforms. The Quinlan tax review stated:
… major taxation revenue streams are unfair, unstable and, as such, unsustainable.
The review also described the major own-source taxes as “volatile and inefficient”.
There is no shortage of evidence that the reforms proposed are the right way to go for Canberra. There is no question that, against all the accepted criteria used to assess taxation, we are far better off removing these transaction taxes and the distortion, inefficiency and inequality they create, and replacing them with a single, broad-based, progressive tax on land. To the government’s credit they have not stalled on this issue and have responded to the evidence from both the Henry and Quinlan tax reviews.
There is quite a network of changes proposed that really need to be considered together before you can make a fair judgement about the overall impact of the changes. Looking at any single change and the impact it will have in isolation does not give an accurate picture of the reforms, and such a superficial consideration is both lazy and disingenuous.
There are a number of economic reasons why the changes are a good idea, and these are well articulated and understood. As well as these issues we have to be aware that we simply cannot continue to rely on the sale of land, and we have to do a better job of allocating our land and housing resources if we want to become a sustainable city.
Our tax system should be more progressive and the Greens support the move to a means-based contribution system that better reflects people’s differing abilities to pay. The Greens are pleased that there are a range of concessions in place to assist those who are struggling and we think that it is reasonable to ask those who are able to to contribute a little more.
We have always said in any debate about tax reform that we need to protect those who are doing it the toughest and who are the most vulnerable to changes. I am very pleased that there does appear to have been a focus on pensioners in the initiatives and particularly pleased that there are significant concessions as well as deferral options for the asset rich but cash poor to ensure they are not unreasonably hit by the changes.
I would like to make just a few comments on the lease variation charge. Firstly, the point should be made that yet again this was found to be a very efficient and fair tax by the tax review panel. Secondly, the Greens are very pleased that there is now a general remission for building more energy efficient buildings, and whilst we are
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