Page 647 - Week 02 - Thursday, 18 February 2016
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hacking funding out of the poorest households in this city, cutting funding from the poorest people in this city, through the abolition of the national partnership on concessions, my government has been expanding the range of concessions available, including for public transport, electricity, water, rates and car registration. These concessions play an important role in assisting households to deal with cost of living pressures.
It is important to recognise, of course, that many fees and charges are beyond the direct control of the territory government. For example, the prices for electricity and water and sewerage are set independently by the ICRC. Nevertheless, it is worth noting the ACT has the lowest electricity prices amongst jurisdictions in Australia for residential customers, and that the most recent water and sewerage price determination raised prices by 0.7 per cent, well below inflation.
In addition, the government offers several programs to reduce the impact of fees and charges on households. We have boosted concessions for pensioners and we have put schemes in place to assist many in our community. These include the deferred duty scheme, the homebuyer concession scheme, the first home owner grant, the pensioner duty concession scheme and the over 60s home bonus. In addition, the last budget increased the general rate rebate to $700, with pensioners in receipt of the rebate prior to 1997 remaining eligible for a 50 per cent rates rebate.
Turning to taxation reform, the government’s reform program is getting rid of two of the worst taxes imposed by any level of government in Australia—conveyance duty and tax on insurance. Stamp duty has been cut in every budget since 2012 and will be cut again in the coming budget and in every budget I deliver as Treasurer. The cuts to stamp duty are already making buying a home more affordable to Canberrans. The buyer of a $500,000 home is currently saving nearly $6,000 in stamp duty compared to before tax reform began. The saving on a $750,000 home is approaching $8,000.
Insurance duty is also being abolished. Duty on general insurance has fallen from 10 per cent a few years ago to two per cent, and will be abolished in the coming budget. Duty on life insurance has fallen from five per cent to the current one per cent and will be abolished in the next budget. A Canberra household paying $2,500 a year in their combined insurance premiums is currently saving $200 a year because of the government’s cut to insurance tax, and this saving will rise to $250 a year from 1 July when the tax is fully abolished.
Touching briefly on general rates, replacing the revenue forgone from cuts to stamp duty and insurance duties through the rates system is a fairer and more efficient way to raise revenue. The Prime Minister confirmed that on the Insiders program less than two weeks ago. As I have noted before in this place, rates are simple to administer, easy to calculate and almost impossible to avoid. All the tax cheats out there who go around designing their affairs to try and avoid tax get caught; they cannot avoid paying rates because it is levied on an immobile resource.
Reform is occurring over a 20-year period so that rates will progressively increase to compensate for reductions in stamp duty and insurance taxes. In 2012-13 the government introduced progressivity into the rates structure to reduce the amount of
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