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ACT Budget – the Good, the Bad and the not so Ugly

By John Hargreaves - 13 June 2016 18

ACT Budget

I’m going out on a limb when I say that I reckon this is the best ACT Budget I can think of, including those with which I had a part in creating.

You would say that, say my detractors. Well not always so. I have been critical of past Budgets because of the lack of attention to Tuggeranong, to the at times draconian increases in costs to families and for expenditure on large-scale projects that I could not see were worth the money.

I supported the prison but not the Arboretum. I got the latter one wrong big time. I called it a tree zoo. What we got was a national icon, an example to the country, possibly the world, of what a vision could deliver. And the added bonus was the greenhouse gas emission amelioration that Arboretums give.

It is the same for the tram. I didn’t like it at first, then warmed to it and now am a strong supporter. Having vision in budgets is a great thing. As an aside, the biggest vision thing that the Liberals have had was the redevelopment of Bruce Stadium and we all know how that turned out. If anyone wants to correct me on this one, go for it.

Balanced

This Budget is the most balanced I’ve seen. It delivers on projects, it addresses social problems, it raises revenue (some would say a bit unfairly) and it reduces the deficit.
The projects it delivers on are, of course, the tram, major road works costing $100 million, renewal of public housing, upgrading the courts precinct, and land for a new school in the Molonglo Valley. Putting a swimming pool in the Weston and Stromlo region addresses an issue before it becomes a problem.

The budget addresses the issues at the Canberra Hospital with a significant injection of funds on a recurrent basis; 157 jobs is a huge effort with 59 jobs in the emergency department a most welcome initiative.

The levy for the “safer families” initiative is a novel way of addressing a real problem here in Canberra. What it means is that all property owners accept the same level of responsibility for the social impact of domestic violence and it is not spread unevenly across income brackets. Domestic violence does not discriminate when it strikes families and neither does the levy discriminate.

There has been some criticism of the government’s exemption for public housing tenants, but it needs to be remembered that these folks don’t own the properties, they rent them and don’t pay rates. Private tenants will only contribute to the levy if landlords find a way to pass the cost on to the tenants.

Fair share

The reduction in concessions is always complained about but these reductions are not earth-shattering. For example, raising the age threshold for access to the Seniors’ card is commensurate with people staying in the workforce longer. Also the card is only available for those who work 20 hours or less a week. And the concessions associated with the Seniors’ card are not all that good, if you take away the bus concession. Also remember that once a person gets to 70 years old, they travel free on the bus anyway.

The reduction in the increase in rates is just that, though. A reduction in an increase. But it must be remembered that this increase in rates over time is to mean the abolition of taxes and duties. Apartment owners will complain because they cop a 20% increase in their rates. Well they chose that lifestyle and should pay a fair share of the rates pie. Remember that 20% sounds high, but compare the dollar amount of an average of $1100 per apartment against an average of $2000 for a residential block and things seem a bit different to me.

The health of the economy itself is reflected in the reduction in the projected deficit. This should ensure the retention of the AAA credit rating, upon which our borrowings depend for lower interest rates. All this nonsense of pushing towards a surplus is just that. How many home owners operate on a family surplus? Their mortgage ensures that the family is in deficit. The main issue is whether the household can service the loan. The ACT is in a good position to service the deficit and reducing it over time.

I should congratulate Jeremy Hanson for putting forward his ideas and showing that he will use the money from the tram on schools and health. The problem with this is like Brendan Smythe’s proposal in 2004 to use the cost of the prison, which they opposed, to fund more nurses. The major money was in capital expenditure and not recurrent expenditure, so he, and now Mr Hanson, are using one-off capital expenditure to fund a recurrent policy. Sure the projects came with some recurrent funds for ongoing costs but not nearly as much as the Libs banked on.

Responsible financial plan

I wonder also of the merit of freezing rates. There is no indication of how long this freeze will last. I can’t see it lasting that long because it is an integral part of the revenue required to offset expenditure on social infrastructure and services.

In the past, to give credit where it is due, the Libs have just bagged out the budget. At least this time they have said something more concrete, even if I don’t like the proposals.

I just wish, though, that Zed Seselja would remember he is a Senator and not the Leader of the ACT Opposition. Each comment he makes on the ACT Budget diminishes Mr Hanson’s image as leader of the local Libs.

I’m now nowhere near the centre of things, I’m not consulted on much any more, so I make up my mind on what I see and hear, just like the rest of you, but I do like the the direction the Budget sets. It is not the election bag of lollies but it is a responsible financial plan.

It is also a bit ho-hum and there won’t be much in the election campaign for anyone to talk about.

What’s Your opinion?


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18 Responses to
ACT Budget – the Good, the Bad and the not so Ugly
gooterz 7:11 pm 15 Jun 16

greenbamboo said :

These are the “levies” that are currently imposed by this ACT Labor/Greens Gov’t, including the new ones in this latest Territory budget (all are per annum) :

In Vehicle Registration :

Road Rescue Fee : $25
Road Safety Contribution : $2.50
LTCS Levy : $34
CTP Regulators Levy : $1.00

In Annual Rates :

Family Violence (Safer Families) Levy : $30
Fire & Emergency Services Levy: $10
Victims Services Levy : $10 (to be doubled to $20 in 2017-18)
Ambulance Levy (families rate) : $10

(+ ratcheted increases to Annual Rates and other ACT Gov’t charges such as parking fees every year, forever ! Makes the reduction on stamp duty on my insurance policies look like chicken feed.)

Any of these can be increased each financial year.

I can only see levies such as for Family Violence increasing regularly if incidences increase and as administrative overheads inevitably eat into the available funds to deliver services on the ground.

Add them up…….did I miss any ???

It is a bit of a funny old system we have here. The word ‘tax’ is hard to find.
We have levys and rates, fees , stamp duty and contributions. I don’t think we have any tolls yet, but they must be working on it.
Anymore ?

The budget is a toll on us all.

MERC600 1:50 pm 15 Jun 16

greenbamboo said :

These are the “levies” that are currently imposed by this ACT Labor/Greens Gov’t, including the new ones in this latest Territory budget (all are per annum) :

In Vehicle Registration :

Road Rescue Fee : $25
Road Safety Contribution : $2.50
LTCS Levy : $34
CTP Regulators Levy : $1.00

In Annual Rates :

Family Violence (Safer Families) Levy : $30
Fire & Emergency Services Levy: $10
Victims Services Levy : $10 (to be doubled to $20 in 2017-18)
Ambulance Levy (families rate) : $10

(+ ratcheted increases to Annual Rates and other ACT Gov’t charges such as parking fees every year, forever ! Makes the reduction on stamp duty on my insurance policies look like chicken feed.)

Any of these can be increased each financial year.

I can only see levies such as for Family Violence increasing regularly if incidences increase and as administrative overheads inevitably eat into the available funds to deliver services on the ground.

Add them up…….did I miss any ???

It is a bit of a funny old system we have here. The word ‘tax’ is hard to find.
We have levys and rates, fees , stamp duty and contributions. I don’t think we have any tolls yet, but they must be working on it.
Anymore ?

dungfungus 12:03 pm 15 Jun 16

greenbamboo said :

These are the “levies” that are currently imposed by this ACT Labor/Greens Gov’t, including the new ones in this latest Territory budget (all are per annum) :

In Vehicle Registration :

Road Rescue Fee : $25
Road Safety Contribution : $2.50
LTCS Levy : $34
CTP Regulators Levy : $1.00

In Annual Rates :

Family Violence (Safer Families) Levy : $30
Fire & Emergency Services Levy: $10
Victims Services Levy : $10 (to be doubled to $20 in 2017-18)
Ambulance Levy (families rate) : $10

(+ ratcheted increases to Annual Rates and other ACT Gov’t charges such as parking fees every year, forever ! Makes the reduction on stamp duty on my insurance policies look like chicken feed.)

Any of these can be increased each financial year.

I can only see levies such as for Family Violence increasing regularly if incidences increase and as administrative overheads inevitably eat into the available funds to deliver services on the ground.

Add them up…….did I miss any ???

They are all here:
http://www.revenue.act.gov.au/duties-and-taxes/other-levies-and-taxes/energy-industry-levy
A couple that are not charged directly to us are nevertheless passed on, like:
Utilities (Network Facilities) Tax and
Energy Industry Levy

rommeldog56 11:04 am 15 Jun 16

These are the “levies” that are currently imposed by this ACT Labor/Greens Gov’t, including the new ones in this latest Territory budget (all are per annum) :

In Vehicle Registration :

Road Rescue Fee : $25
Road Safety Contribution : $2.50
LTCS Levy : $34
CTP Regulators Levy : $1.00

In Annual Rates :

Family Violence (Safer Families) Levy : $30
Fire & Emergency Services Levy: $10
Victims Services Levy : $10 (to be doubled to $20 in 2017-18)
Ambulance Levy (families rate) : $10

(+ ratcheted increases to Annual Rates and other ACT Gov’t charges such as parking fees every year, forever ! Makes the reduction on stamp duty on my insurance policies look like chicken feed.)

Any of these can be increased each financial year. I can only see levies such as for Family Violence increasing regularly if incidences increase and as administrative overheads inevitably eat into the available funds to deliver services on the ground.

Add them up…….did I miss any ???

dungfungus 3:22 pm 14 Jun 16

Blen_Carmichael said :

John you certainly do have the hots for the Arboretum. I must admit that whenever I drive past the thing its neat orderly layout is indeed striking. I suppose you could use ‘pristine’. With no rubbish or long grass in it., it does In fact look rather like Canberra used to look.

But I never seem to be able to find any expenditure figures for it. I wonder if its expenditure is just bundled in with other South Side parks and what have you.
One bloke who has a little to say about it is a long time Canberra resident who has put forward his views in the City News.

http://citynews.com.au/2016/opinion-time-to-save-our-neglected-street-trees/

There should be a full independent audit report (before the election) on the arboretum and that other nebulous money pit The Glassworks at Kingston.
It’s impossible to find any publicly disclosed details of expenditure on these pet projects.

MERC600 2:36 pm 14 Jun 16

John you certainly do have the hots for the Arboretum. I must admit that whenever I drive past the thing its neat orderly layout is indeed striking. I suppose you could use ‘pristine’. With no rubbish or long grass in it., it does In fact look rather like Canberra used to look.

But I never seem to be able to find any expenditure figures for it. I wonder if its expenditure is just bundled in with other South Side parks and what have you.
One bloke who has a little to say about it is a long time Canberra resident who has put forward his views in the City News.

http://citynews.com.au/2016/opinion-time-to-save-our-neglected-street-trees/

devils_advocate 10:54 am 14 Jun 16

“Apartment owners will complain because they cop a 20% increase in their rates. Well they chose that lifestyle and should pay a fair share of the rates pie. Remember that 20% sounds high, but compare the dollar amount of an average of $1100 per apartment against an average of $2000 for a residential block and things seem a bit different to me.”

This is ridiculous for 2 reasons:
1) Apartment dwellers made their choice based on much lower rates. Like any residential property, apartments are long-lived investments, they have huge transaction costs, and people can’t just up and sell at a whim because the government has decided to arbitrarily increase rates by an order of magnitude.
2) apartment dwellers simply do not use up the same resources as detached home owners, in terms of land, critical infrastructure (much cheaper to run utilities to densely populated buildings compared with suburbs) and (for apartments located in inner-city areas) transport infrastructure. Also, apartment dwellers don’t typically see much if any capital gains compared to houses (or, they might suffer capital losses in real or nominal terms).

So, this change is unfair, retrospective (because of the degree of lock-in when buying a property) and regressive. In other words, perfectly consistent with the broader policy direction of the ACT “government”.

dungfungus 8:21 am 14 Jun 16

This will never happen in the ACT because the public servants pension fund is already in deficit.
http://www.afr.com/news/politics/queenslands-palaszczuk-government-to-raid-30b-super-to-pay-down-debt-20160523-gp276q

wildturkeycanoe 7:22 am 14 Jun 16

“It is also a bit ho-hum and there won’t be much in the election campaign for anyone to talk about.”
I think the tram alone will be enough to stimulate conversation outside polling booths on election day, if the hundreds of dollars per year increases in rates, taxes and levies hasn’t already turned die-hard Labor voters against their party.
I’m one of the “what’s in it for me?” crowd and will base my decision on both the budget’s impact and what Liberals have to offer. So far, the only thing Labor has awarded in its promises, is an increase of over $350 in my cost of living in the next two years, not even taking into account the increases to come in my utility bills for trying to get to 100% renewable energy. I see the Libs have announced some spending on schools and health instead of the tram. Nothing else needs to be said, they will get my vote purely on that alone.
The Federal Liberal government is doing its best to ruin Medicare, make all health services more expensive and little else in the way of support for families. Can you see the dilemma, that in order to do what is best for my family, I have to vote for one party federally and the other locally? It is doing my head in. Never, ever in my life has an election been so awkward and confusing. Both parties are doing a pitiful job at winning me over, whilst the independents are barely making a noise.
Nonetheless, anyone promising to canthetram has my vote.

rommeldog56 8:33 pm 13 Jun 16

Masquara said :

On the application of the equity of levies, how do you view the application of the 1.5% levy on property owners to fund CBD Ltd, to enhance the look of the central business district. the levy is not paid by the tenants, the shop tenants and the professional suite tenants but only the property owners. It raises a few $million a year.

And it is not paid by the shoppers either, who benefit from the levy.

So, u think that a 1.5% levy on Civic property owners isn’t passed onto tenants and also to shoppers in some way ? Yet again, ALP voodoo economics.

dungfungus 11:35 am 13 Jun 16

Once again you are ethically wrong, logically wrong, factually wrong and just plain wrong.
The levy for “safer families” does discriminate. A levy on home owners is a totally unfair means of raising government revenue for domestic violence programs and I just don’t get how you can support this. You assume, or wish to delude yourself that only property owners commit DV.
It should be obvious this levy is unfair. Take this simple example. I own my house, am a good law-abiding citizen and pay a DV levy. My (hypothetical) neighbour rents his property, beats up his wife and his wife abuses and neglects the baby to the point it has to be removed. Domestic violence to the max. But ‘these folks’ don’t have to pay the DV levy simply because they rent and don’t own their property. Explain the logic of that. How does that meet fairness and equity criteria?
Applying a DV levy to private renters may be problematic for a government. But IF you must have a levy then it would have been (marginally) fairer to apply it in a way that is more widely shared across the entire community. That could have been done by charging all car owners as part of the registration process. Surely there are more cars in the ACT than home owned properties and I suspect the majority of DV perpetrators are more likely to be car owners, than property owners.

Your opening sentence didn’t entice me to read on. It merely revealed an inherent antipathy, the reasons for which I am unaware. I have been out of politics for 4 1/2 years and yet some still harbour grudges. The article was more then just a comment on the safer families levy.

However, read on, I did.

I can see the logic of your position, except that I did say that landlords, except the ACT Government, will find a way to pass the levy on to their tenants.

You have a point about motor vehicle registration but then not all tenants have vehicles, particularly those in apartments in the city.

I don’t have another way of hypothecating an amount of money across the board to apply to this crisis. However you may wish to look at the DV crisis, our society lets the victims down by not having enough protective measures in place to ensure their safety.

On the application of the equity of levies, how do you view the application of the 1.5% levy on property owners to fund CBD Ltd, to enhance the look of the central business district. the levy is not paid by the tenants, the shop tenants and the professional suite tenants but only the property owners. It raises a few $million a year.

“not all tenants have vehicles, particularly those in apartments in the city.”
I don’t think that is correct. Everyone I know who lives in an apartment in the city has at least one car.
Do you have a source to back that up?

John Hargreaves 11:16 am 13 Jun 16

Once again you are ethically wrong, logically wrong, factually wrong and just plain wrong.
The levy for “safer families” does discriminate. A levy on home owners is a totally unfair means of raising government revenue for domestic violence programs and I just don’t get how you can support this. You assume, or wish to delude yourself that only property owners commit DV.
It should be obvious this levy is unfair. Take this simple example. I own my house, am a good law-abiding citizen and pay a DV levy. My (hypothetical) neighbour rents his property, beats up his wife and his wife abuses and neglects the baby to the point it has to be removed. Domestic violence to the max. But ‘these folks’ don’t have to pay the DV levy simply because they rent and don’t own their property. Explain the logic of that. How does that meet fairness and equity criteria?
Applying a DV levy to private renters may be problematic for a government. But IF you must have a levy then it would have been (marginally) fairer to apply it in a way that is more widely shared across the entire community. That could have been done by charging all car owners as part of the registration process. Surely there are more cars in the ACT than home owned properties and I suspect the majority of DV perpetrators are more likely to be car owners, than property owners.

Your opening sentence didn’t entice me to read on. It merely revealed an inherent antipathy, the reasons for which I am unaware. I have been out of politics for 4 1/2 years and yet some still harbour grudges. The article was more then just a comment on the safer families levy.

However, read on, I did.

I can see the logic of your position, except that I did say that landlords, except the ACT Government, will find a way to pass the levy on to their tenants.

You have a point about motor vehicle registration but then not all tenants have vehicles, particularly those in apartments in the city.

I don’t have another way of hypothecating an amount of money across the board to apply to this crisis. However you may wish to look at the DV crisis, our society lets the victims down by not having enough protective measures in place to ensure their safety.

On the application of the equity of levies, how do you view the application of the 1.5% levy on property owners to fund CBD Ltd, to enhance the look of the central business district. the levy is not paid by the tenants, the shop tenants and the professional suite tenants but only the property owners. It raises a few $million a year.

And it is not paid by the shoppers either, who benefit from the levy.

John Hargreaves 11:10 am 13 Jun 16

Once again you are ethically wrong, logically wrong, factually wrong and just plain wrong.
The levy for “safer families” does discriminate. A levy on home owners is a totally unfair means of raising government revenue for domestic violence programs and I just don’t get how you can support this. You assume, or wish to delude yourself that only property owners commit DV.
It should be obvious this levy is unfair. Take this simple example. I own my house, am a good law-abiding citizen and pay a DV levy. My (hypothetical) neighbour rents his property, beats up his wife and his wife abuses and neglects the baby to the point it has to be removed. Domestic violence to the max. But ‘these folks’ don’t have to pay the DV levy simply because they rent and don’t own their property. Explain the logic of that. How does that meet fairness and equity criteria?
Applying a DV levy to private renters may be problematic for a government. But IF you must have a levy then it would have been (marginally) fairer to apply it in a way that is more widely shared across the entire community. That could have been done by charging all car owners as part of the registration process. Surely there are more cars in the ACT than home owned properties and I suspect the majority of DV perpetrators are more likely to be car owners, than property owners.

Your opening sentence didn’t entice me to read on. It merely revealed an inherent antipathy, the reasons for which I am unaware. I have been out of politics for 4 1/2 years and yet some still harbour grudges. The article was more then just a comment on the safer families levy.

However, read on, I did.

I can see the logic of your position, except that I did say that landlords, except the ACT Government, will find a way to pass the levy on to their tenants.

You have a point about motor vehicle registration but then not all tenants have vehicles, particularly those in apartments in the city.

I don’t have another way of hypothecating an amount of money across the board to apply to this crisis. However you may wish to look at the DV crisis, our society lets the victims down by not having enough protective measures in place to ensure their safety.

On the application of the equity of levies, how do you view the application of the 1.5% levy on property owners to fund CBD Ltd, to enhance the look of the central business district. the levy is not paid by the tenants, the shop tenants and the professional suite tenants but only the property owners. It raises a few $million a year.

dungfungus 10:47 am 13 Jun 16

Once again you are ethically wrong, logically wrong, factually wrong and just plain wrong.
The levy for “safer families” does discriminate. A levy on home owners is a totally unfair means of raising government revenue for domestic violence programs and I just don’t get how you can support this. You assume, or wish to delude yourself that only property owners commit DV.
It should be obvious this levy is unfair. Take this simple example. I own my house, am a good law-abiding citizen and pay a DV levy. My (hypothetical) neighbour rents his property, beats up his wife and his wife abuses and neglects the baby to the point it has to be removed. Domestic violence to the max. But ‘these folks’ don’t have to pay the DV levy simply because they rent and don’t own their property. Explain the logic of that. How does that meet fairness and equity criteria?
Applying a DV levy to private renters may be problematic for a government. But IF you must have a levy then it would have been (marginally) fairer to apply it in a way that is more widely shared across the entire community. That could have been done by charging all car owners as part of the registration process. Surely there are more cars in the ACT than home owned properties and I suspect the majority of DV perpetrators are more likely to be car owners, than property owners.

Once again, a tax on the lifters for a problem mainly caused by the leaners.

Acton 10:37 am 13 Jun 16

Once again you are ethically wrong, logically wrong, factually wrong and just plain wrong.
The levy for “safer families” does discriminate. A levy on home owners is a totally unfair means of raising government revenue for domestic violence programs and I just don’t get how you can support this. You assume, or wish to delude yourself that only property owners commit DV.
It should be obvious this levy is unfair. Take this simple example. I own my house, am a good law-abiding citizen and pay a DV levy. My (hypothetical) neighbour rents his property, beats up his wife and his wife abuses and neglects the baby to the point it has to be removed. Domestic violence to the max. But ‘these folks’ don’t have to pay the DV levy simply because they rent and don’t own their property. Explain the logic of that. How does that meet fairness and equity criteria?
Applying a DV levy to private renters may be problematic for a government. But IF you must have a levy then it would have been (marginally) fairer to apply it in a way that is more widely shared across the entire community. That could have been done by charging all car owners as part of the registration process. Surely there are more cars in the ACT than home owned properties and I suspect the majority of DV perpetrators are more likely to be car owners, than property owners.

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