An Independent A.C.T Taxation Policy
Tuesday, June 3rd, 2008This article was presented at a late 1980’s meeting prior to ACT self government and published in the Canberra Times.
Terry Dwyer
ACT finances will come from three sources - taxes, grants and borrowings. I do not propose to say much about borrowings because borrowings are not a source of current revenue. Australian Governments are generally coming to the realization that borrowing for current deficits is a dead-end road . The end comes when you have to flog whatever you can to pay your accumulated debts and you still can’t pay the housekeeping bills. Borrowing, other than for capital works which will repay principal and interest, is a shifty expedient in Government finance which is best avoided.
Turning to grants, much is clearly outside the ACT’s control. We do however need to point out firmly and clearly to the Grants Commission that there are features of the ACT which do reduce its taxable capacity in comparison to the States. Apart from the obvious National Capital functions and the ACT’s increasing service role for the South-East of NSW, there are other disabilities such as the high portion of exempt governmental or diplomatic activity here. Again the ACT suffers more than the States from the Federal monopoly of income tax because of the high proportion of higher income and two income households in Canberra. Many of Canberra’s fiscal disadvantages are well set out in the ACT submission to the Grants Commission.
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