Page 3451 - Week 11 - Thursday, 19 September 2013
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I also foreshadow that, in relation to the next phase of tax return, the government will pay due heed to a number of changes in the federal landscape in relation to tax reform—namely, it is, as I understand it, the commitment of the incoming federal government to commission a white paper on tax reform. I also understand it is their intention to commission a white paper and seek reform of federal financial state relations. I have read numerous press reports where other state and territory governments have argued for reform of federal-state financial relations, and matters of taxation obviously are impacted by such arrangements. It is entirely possible—one one would anticipate it with a degree of certainty—that there will be changes in the ACT government’s approach to tax reform in the second phase of our reforms that we made in the 2012-13 budget—that is, a commitment to the abolition of insurance duties over five years. That commitment remains, and we will phase out those duties over the course of this parliamentary term. That reform will be complete over the next two budgets.
We also have a long-term aspiration over a 20-year period to abolish stamp duty, and we will make efforts in every budget while I am Treasurer to reduce stamp duty. We have certainly done so in the 2012-13 and 13-14 budgets. However, we will, of course, respond to changing circumstances in relation to, for example, the distribution of the goods and services tax and any incentives offered by the commonwealth government to reform inefficient state and territory taxes. I know other state and territory governments are seeking those incentives. We would enthusiastically embrace any, should they be forthcoming from the tax white paper that is proposed in this term of the federal parliament. The government will, of course, respond to those changing circumstances.
But I have no issues at all in releasing the modelling. In fact, I released on the day I released the tax reform package the government’s modelling in relation to the impacts of the tax reforms we have announced to date. I indicated in 2012-13 that a rolling five-year program was my preferred way of approaching tax reform, as this undoubtedly will be an area that will be subject to a variety of changing parameters over the year. That approach has certainly proved to be the correct one, given the change of federal government that occurred earlier this month. This means it is highly likely that the circumstances and rate of tax reform will be different in the years ahead than what was anticipated in 2012-13. Indeed, we made changes in the 2013-14 budget to accelerate reform in some areas, particularly in relation to slashing the top rate of commercial stamp duty for large property transactions.
I reiterate that the government remains committed to the abolition over time of inefficient taxes, but we also need to ensure we have a robust revenue base in order to support the operations of the territory. We will, as opportunities present—like we did in the 2013-14 budget—make changes to policy settings to accelerate the rate of stamp duty reduction. One such example was the money saved from the changes to the first home owner’s grant was put into accelerating the rate of stamp duty reduction, and, therefore, not requiring revenue replacement through the rates system. We will continue to take those opportunities when they present themselves.
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