Stanhope / Oh, Shane, the price the poor will pay for this

“Analysis of the ACT Budget uncovers some quite startling detail. Most remarkable perhaps is the revelation that the claimed surplus is an illusion,” writes JON STANHOPE

Shane Rattenbury… seems to have resolved in favour of pragmatism or “whatever it takes”.

IT was hard not to feel a tad sorry for the opposition spokesperson for housing, Mark Parton, following his failure to gain the support of the ACT Greens for his proposal to grant the owners of rental properties a land-tax holiday if they reduced rents by a commensurate amount.

Jon Stanhope

Jon Stanhope.

Greens member Caroline Le Couteur had, after all, publicly floated the very same proposal herself. Presumably in the face of Labor Party opposition to giving up any revenue from any source for any purpose, Caroline and Greens Leader Shane Rattenbury silently caved in and refused to support the motion proposed by the opposition.

I have to say it is not an idea that I would have supported either. I would have preferred Labor and the Greens to do what was recommended by the Taxation Review and abolish land tax altogether.

In its response to the Taxation Review in 2012 then-treasurer Andrew Barr agreed in principle to do just that. The fact that Land Tax has not been repealed but in fact increased over the three years between 2013-14 and 2016-17 at an annual rate of 10.35 per cent from $79 million to $106 million explains in major part why the Labor/Greens promise to ensure that the implementation of the Taxation Review recommendations would be revenue neutral has been broken.

Labor and the Greens have announced that Land Tax will increase by a further 45 per cent over the next five years. I imagine the fact that the Greens have supported these massive hikes in Land Tax was an additional consideration in their decision not to support the Liberal Party motion. To have done so would certainly have exposed the depth of their hypocrisy.

The fact that the ACT Budget is as much a statement of the priorities and policies of the Greens Party as it is of the Labor Party exposes the extent of the Faustian bargain that unites the two parties. As a Minister and member of the Cabinet, Shane Rattenbury has signed off on every single decision and initiative contained in or reflected by the Budget and the consequences that will flow from the way in which funding has been allocated.

Analysis of the Budget uncovers some quite startling detail. Most remarkable perhaps is the revelation that the claimed surplus is an illusion. It has been achieved, in the main, by deferring, in contradiction of the government’s own stated policy, the expensing of hundreds of millions of dollars of large-scale generation certificates until after the next election. What this deferral has done is distort the operating balance by $132 million in this financial year alone and will create, of course, a massive black hole in the first Budget after the 2020 election, when the certificates are apparently now to be surrendered.

Is it just me or is it especially cynical that the Greens have agreed to use an accounting treatment of a program designed as a centrepiece of the national response to climate change and as a measure of progress in meeting the Renewable Energy Target in a way that misrepresents the Budget position? Is nothing sacred?

I get the impression that concerns about the way in which large-scale energy certificates have been treated in the ACT Budget are water off a duck’s back to Rattenbury. He did, after all, sign off on the Budget. The Budget has his signature on it and while he also signed off on behalf of Caroline Le Couteur ,I ‘m ure the contest between pragmatism and principle, which Shane seems to have resolved in favour of pragmatism or “whatever it takes”, continues to torment Caroline who appears to be genuinely concerned by the opportunity costs that result from the funding which the Greens top-priority projects have been allocated.

The two biggest winners in the Budget are Economic Development, which includes expenditure on renewable energy and tourism, and Transport, which includes, of course, the cost of the tram. These two functions receive by far the highest increases in funding in the Budget at 9.9 per cent and 7 per cent respectively.

Funding for almost all other functions pale in comparison and a number have indeed suffered cuts. The tram and renewable energy are indisputably the Greens’ two signature policy issues and the funding they have been allocated reflects the price the Greens have demanded for their unquestioning allegiance to the government.

However, the price the community will pay as a result of the bargain struck between the two parties is the consequential funding cuts which Labor and the Greens have agreed to make to other functions. These include a cut of 3.7 per cent (compounding) to Environmental Protection (the first casualty of which is the decision to defund Frog Watch – oh, Shane; oh, Caroline, how could you?), a cut of 0.6 per cent (compounding) for Social Protection, and effective cuts to Housing and Community Services and to Health in relation to both of which the agreed growth in funding is less than inflation.

It goes without saying that all of these cuts will impact disproportionately and dramatically on the most poor, disadvantaged, vulnerable and marginalised people in our community.

 

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