Page 3027 - Week 08 - Thursday, 15 August 2019
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In that context, the treasury is a very busy agency as the ACT’s economy continues to grow rapidly—the fastest in the nation—and as we forge on with important structural reforms to the territory’s taxation system, whilst delivering comprehensive third-party insurance reform in Canberra.
As this year’s budget has highlighted, our local economy is likely to have achieved four per cent growth in 2018-19. We expect that to moderate somewhat but still be at least three per cent in 2019-20, which follows a period of very rapid expansion which saw the economy grow by 12 per cent in the past three years. The forward forecasts show that our city is on track for this kind of steady and sustainable growth, growth that is boosting living standards over time.
Our recent economic growth has supported the creation of over 3,200 new businesses and more than 20,000 jobs in the past four years. Our unemployment rate is consistently one of the lowest in the country—I believe the figures out this morning confirmed, again, that we have the lowest unemployment rate in the nation—even as our community has been growing by around 8,000 people a year. The size of the city is growing, too, with construction commencing on a record number of new homes over the past 12 months.
The ACT government is continuing to expand our investment in vital government services and new public infrastructure to meet this growth. We are doing this because we understand the importance of managing this growth, of getting this growth right, to protect our city’s unique character and our world-rated No 1 livability as more people call Canberra home.
Tax reform is a key part of our plan to get this growth right, by ensuring that all contribute fairly to the services and infrastructure we all use. Making the ACT budget fairer and more sustainable by transitioning away from inefficient transaction taxes to broad-based taxes levied through general rates benefits the economy; and it benefits everyone, because we ensure that we have the capacity to deliver the services and infrastructure that Canberrans rely on now and will rely on in the years to come when some of our traditional sources of revenue become more constrained.
With this year’s budget, we are approaching the halfway mark of the tax reform program. We have already fully abolished insurance duty, cut stamp duty to zero for around 70 per cent of commercial property transactions, raised the payroll tax threshold so that 90 per cent of small and medium businesses do not pay it at all, and cut stamp duty on every single residential property sale.
Someone buying a half-million dollar home today pays $9,100 less in stamp duty than they would have before tax reform commenced. By 2021-22, we will have almost halved residential stamp duty for all transactions below $600,000. As of 1 July this year, we have taken the next step in this reform by fully abolishing stamp duty for eligible first homebuyers, making it easier for young Canberrans and those on low incomes to own their own home. First homebuyers with a household income below $160,000, with some additional allowances for first homebuyers with children, will no longer have to pay any stamp duty, regardless of whether they are buying a newly
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