Page 536 - Week 02 - Wednesday, 19 March 2014
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All transaction taxes will fluctuate based on levels of economic activity. The lease variation charge, like stamp duty and like many others, will, of course, fluctuate depending on the levels of economic activity. So the level of revenue collected will be impacted by the interaction of supply and demand in particular markets in the economy. That is the nature of this form of taxation. When it comes to the most efficient ways of raising revenue, we know that a tax on a windfall gain that has no deadweight loss—that is, the lease variation charge—is the most efficient way of raising tax.
What is perverse about Mr Smyth’s position is that he prefers inefficient ways of raising tax. He wants to raise tax by the most inefficient and pernicious forms of taxation available. That is his preference. He wants to tax people when they divorce and they are forced to sell their property. He wants to whack a whopping great stamp duty on them. He does not support the abolition of stamp duty. He supports stamp duties being raised. He is opposing the reduction of stamp duty. He is opposing the reduction of insurance taxes. He and his cohort of economic ignoramuses are supporting the most inefficient taxes that it is possible for state and territory governments to levy.
This government, Madam Assistant Speaker, is moving away from those taxes to more efficient forms of taxation. The lease variation charge is one of those. It has been in existence in the territory in one form or another since the 1970s. A betterment tax is a principle that even you took to the last election. The tax that you believe is terrible you support.
Alternatively, Madam Assistant Speaker, the shadow treasurer needs to indicate where he would find $20 million and more of lost income per annum—if he believes this tax should be abolished. If that is the position, be clear and indicate which other taxes you would raise in order to substitute for that lost revenue or indicate which $20 million of expenditure on health, education, community services or TAMS—roads, resurfacing, those sorts of programs—you would cut. That fundamentally is the position of the shadow treasurer. He wants to walk both sides of the fence. The problem with those who walk both sides of the fence is that they get splinters in uncomfortable places. The shadow treasurer has a few splinters on this issue, it is very clear.
The important point to note throughout all of this is that the principles that underlie the lease variation charge are sound—sound in economic theory and sound in practice. We are providing a two-year stimulus—a two-year stimulus. We are not walking away from the principles of the lease variation charge. In fact, we are freezing the current arrangements. We are freezing the current arrangements in relation to the codification of the lease variation charge. That is exactly right—unchanged.
Mr Smyth interjecting—
MR BARR: We have made one change in the V1-V2 remission that applies to a very small proportion of uncodified areas. The bulk, the vast majority, of the territory has been codified, but a small proportion of properties are not. They are subject to a V1-
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