Shadow Treasurer Ed Cocks has accused the ACT Government of failing to secure the best deal possible to cover lost payroll tax from Commonwealth public servants. Photo: Michelle Kroll.
The Canberra Liberals have accused the ACT Government of failing to get Canberrans a fair deal when it comes to compensation for missed payroll tax.
The recent budget estimates committee report noted the ACT has not calculated the amount of lost payroll tax from the Australian Public Service “to advocate for compensation from the Commonwealth Grants Commission”.
“The Committee further notes that as decisions of the Commonwealth Government, including in-sourcing, have a disproportionate impact on the ACT’s tax revenue, it would be reasonable to have a risk-mitigation strategy in place,” the report stated.
Shadow Treasurer Ed Cocks said the Canberra Liberals would lobby Federal Treasurer Jim Chalmers, Federal Finance Minister Katy Gallagher and the Commonwealth Grants Commission for a better deal, claiming ACT Labor had failed to fight for the compensation the Territory deserved.
“The ACT is potentially being short-changed billions over the life of the Budget because we don’t receive any payroll tax on the salaries that Commonwealth public servants receive, and this is affecting our future financial capacity,” he said.
“It was revealed in the recent Estimates process that ACT Labor had neither calculated the amount nor sought compensation from their federal colleagues, which begs the question: why haven’t they?”
Mr Cocks said the revenue shortfall could reasonably be estimated to sit at about $750 million per year.
“The federal finance minister is Katy Gallagher, ACT Senator. If ACT Labor can’t even get their own minister to lobby on behalf of the ACT, what is the point of having Labor in government?” he asked.
“The Canberra Liberals are prepared to step up and make the strong case that the ACT deserves to be compensated for this shortfall in revenue.
“We can’t afford to be let down any longer by ACT Labor, who won’t even try to get their team to get a better deal for the ACT.”
When approached by Region for comment, the ACT Government pointed to several responses Chief Minister Andrew Barr gave to the estimates hearings about why calculating the missed payroll tax wouldn’t make a difference.
“I do not think we would have wasted anyone’s time and effort trying to track down, to the last dollar, something that is constitutionally impossible,” he said.
“This is possibly the most absurd academic exercise, because we have an adjustment through the GST process. It varies from year to year, and it does, of course, depend on the level of Commonwealth public sector employment.”
Mr Barr has long been a vocal critic of the current GST arrangements, and reiterated this stance during the estimates hearings.
“One need only look at the bottom lines of every other jurisdiction, Commonwealth and the other seven states and territories, as opposed to WA, to see how unfair that distribution is becoming,” he said.
“We believe in horizontal fiscal equalisation; that is, there should be adjustments made to the GST distribution for smaller states and territories to reflect diseconomies of scale and to reflect the fact that remote service provision, for example, costs a lot more for other jurisdictions.
“The answer, unfortunately, is not in payroll tax collection on the Commonwealth. That is not a silver bullet.”
Region understands the ACT Greens will be introducing a Private Members Bill during this week’s sitting period with several proposals for the ACT Government to find more revenue, including that lost from the Commonwealth payroll tax shortfall.
“It’s great to see support for the Greens’ proposal to get a fairer funding deal with the Commonwealth Government so we can fund the services people want and need – like the recently cut Rent Relief Fund, free doctor visits and more public housing to meet the current waitlist,” ACT Greens deputy leader Jo Clay said.
“We raised our proposal with all parties and independents in Parliament last week, so [I’m inspired] with hope that the Liberals will completely back the Greens’ proposal to get a fairer deal for Canberra when it’s debated on Wednesday [3 September].”
