30 August 2020

Does Alistair Coe really have a plan for his rates freeze and the economy?

| Ian Bushnell
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Opposition Leader Alistair Coe

Opposition Leader Alistair Coe is keeping mum on his rates plans. Photos: Michelle Kroll

Halfway through the Labor Government’s tax reform program and with two elections behind him, Chief Minister and Treasurer Andrew Barr would be forgiven for thinking that the rates issue was dead and buried.

But like some zombie that just won’t lie down or a virus that returns every four years, it’s back to haunt another election, happily resurrected by the Canberra Liberals who have never accepted the validity of the reform program and the realignment of revenue sources it is bringing about.

As Mr Barr often says nobody likes paying taxes and Opposition Leader Alistair Coe is tapping that distaste again, repeating the mantra that your rates will triple under Labor. But the next part of the tax equation is that everybody appreciates the services taxes provide.

And that’s where we are at yet again, with Mr Barr wanting to know how the Liberals will pay for their ”unaffordable” four-year rates freeze and claiming they will have to cut services to achieve it.

Mr Barr has already pressed pause this year and now is capping increases on residential and commercial rates for five years from 2021-22, in light of the economic slowdown thanks to COVID-19.

The government released a positive analysis of the first seven years of the reform program with the Budget update last week, but Mr Coe is having none of it. It’s still a rates rip-off, he says.

READ MORE Government to cap rates increases as analysis shows tax reform benefits

But something isn’t adding up here.

Seven weeks out from the 17 October election and only a month till early voting, Mr Coe dodged journalists’ questions last week about how he would pay for his forgoing of rates revenue and what he would do differently if he were Chief Minister with the same lines he delivered nearly a year ago at the National Press Club.

Labor’s rates, taxes and charges were driving people across the border for cheaper land, houses and places to do business, he said.

He even trotted out the Press Club zinger about how Mr Barr may as well be mayor of Queanbeyan for all the economic stimulus his tax and land policies were bringing to the border areas.

Lower taxes and affordable housing for all in a Liberal utopia where somehow the pie just keeps getting bigger all on its own.

But Mr Coe said nothing about the detail of his rates plan, or how his infrastructure and jobs boost would be more ambitious than the government program he was underwhelmed by.

Although Mr Coe says his rates freeze will only cost a modest $175 million over four years, or about half a per cent of revenue over that period, his pledges on continuing the stamp duty phase-out and cutting other charges in a time of collapsing revenues must also be taken into account.

Andrew Barr

Andrew Barr wants to know what Mr Coe plans to cut.

You can bet Labor is crunching the numbers to see what it believes will be the cost. Already the TV ads are rolling warning about the jobs and services at threat.

If we take Mr Coe at his word, no services will be cut. So how will he do it? And what is his economic plan for the ACT?

Would he borrow more? Well, no, if his concerns about dark years of deficit are real.

And there is nothing wrong with borrowing for productive infrastructure in the current environment, something all governments are now doing, urged on by the Reserve Bank.

Mr Coe’s position is a bundle of contradictions, not helped by the spending and borrowing his Commonwealth and state Liberal colleagues are having to do. He is talking as if the pandemic and the economic crisis has not happened, and the ACT’s predicament is all Andrew Barr’s fault.

His talk of growing the pie and lower taxes has the whiff of Ronald Reagan about it.

But the world has moved on. The neo-liberal, economic rationalist straitjacket jacket worn by both main parties in Australia has been ripped off and the fiscal playbook rewritten. Mr Barr is right to say this is a time for government to step up, not back.

Mr Coe bemoaning the record deficit while planning to undermine the ACT’s narrow revenue base by freezing rates and also continuing with the cuts to stamp duty is disingenuous. Not only that, retaining just bits of the reform program defeats the whole point of the exercise.

Mr Barr has responded to the times, softening the impact of his reform program now the ”heavy lifting” has been done, but remains steadfast about the rightness of his course, with an eye to the long-term fiscal security of the Territory.

Perhaps Mr Coe is planning more land sales to boost the bottom line. That was also in his Press Club speech, but that was to increase supply to bring down the price of stand-alone houses.

Whatever the plan is, the Canberra Liberals have had all year to refine it so why doesn’t Mr Coe let the voters in on even a few of the details?

All in good time, he said, after the Opposition has a look at the numbers, or perhaps when there is less time for scrutiny.

Well, time is nearly up, and if Mr Coe wants to win this election he has to tell voters how he is going to deliver his promises, and convince them that it really is a better way.

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Who would I trust to freeze rates? The guy who has jacked up rates well beyond any commensurate reductions in stamp duty, or Coe? I’m going to go with the young fellow who doesn’t have form in ripping us off.

When a feudal baron continuously raises taxes on the exploited serfs, those serfs will eventually be roused to grab their pitchforks, storm the castle and toss the baron and his feasting cronies over the ramparts. In Canberra we don’t have pitchforks but we do have pencils and voting cards.

“everyone can get ahead” is a pretty questionable motto, but here is my guess of what it will look like:
1) Get ahead in health care centres (there will be no security guards to stop you pushing in line)
2) Get ahead in literacy and numeracy (there will be no other subjects to distract you from english, maths & bible studies)
3) Get ahead in the property market (there will be an infinite supply of human filing cabinet style high rise appartments for you to bag off the plan)
4) Get ahead on environment (because urban trees = nature)
5) Get ahead on cost of living (there will be no rates to pay and nothing to spend your money on)
6) Get ahead in your career (coal mine anyone?)

HiddenDragon7:17 pm 31 Aug 20

The ACT Liberals are certainly not the only critics of the Labor/Green taxation policies. Much of the public criticism is coming from groups who initially supported those policies – and dismissed the “triple your rates” line as hype – but have been very disappointed and embittered by what has happened in practice, compared to what they were led to believe would happen.

The Labor/Green government has had plenty of time to come up with some estimates of the revenues that would be lost by the Liberals’ “rates freeze” but they’ve not yet done that – just as they’ve not yet responded to the detailed criticisms by Jon Stanhope of the unsustainable state of the ACT’s public finances before the virus hit.

For all of that, and all of the carry on from both sides in this election, I doubt whether there’s all that much difference between the bottom line consequences of what they are currently promising.

so the alternative is to continue to have high stamp duties or cut services- why would you want to put the tax burden on those who move house more often? That makes no sense

Why does it even matter what he thinks? Canberrans always vote labor no matter what they do to them.
If you vote for Barr you should accept all labor’s decisions and not be a whiner.

The Canberra Liberals are just a talentless and hollowed out whinge club parroting Murdoch talking points, and job welfare for zeddite Young Liberals. They are a waste of tax payers money. Sack them all. Canberra does deserve better. It deserves a better opposition.

One thing is for certain after the next election, we will still have the same old neo-con, bible bashing conservatives on the Liberal side. They know they can’t win, they’re just wasting space. Thanks to Zed, the Canberra Liberals have become a right wing conservative party, nothing new, just the same old tired ideas. They should all step down and bring in candidates who represent true Liberal values.

“Mr Barr has already pressed pause this year”. Really? My current rates notice suggests otherwise. I can see no pause, with another large step up in $. A small one-off reduction in the fixed fee does not equal a pause.

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