The Northern Territory news Wed 1 Feb 2017
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News Corp Australia
22 BUSINESS WEDNESDAY FEBRUARY 1 2017 NTNE01Z01MA - V1 IF Malcolm Turnbull doesnt take action soon, he and the outgoing NSW Premier will be reminiscing over the same missed opportunity for years to come. National tax reform agenda missed opportunity Mike Bairds resignation this week came as a surprise to many. However, his greatest regret shouldnt be a surprise, and it should sound alarm bells in the Prime Ministers office. The failure to prosecute successfully a national tax reform agenda within the federation was a major disappointment for the NSW Premier, not due to lack of desire or perhaps even fortitude on his part, but rather because the Federal Government failed to capitalise on a real opportunity to achieve real reform as part of a comprehensive reform to the nations taxes. The policy leadership shown by Baird and others in 2015, and again in 2016, saw almost 40 per cent of Australians supporting a rise in the GST rate surely a remarkable feat considering the question. However, the opportunity was squibbed. Short-term thinking and d a y - t o - d a y politics got in the way of bold reform and long-term funding surety. The temptation to buckle under the weight of r e l a t i v e l y minor criticism proved too great, and the Prime Minister walked away from the opportunity to achieve real, long-term reform that would provide all Australians with a better future. As Baird told reporters at the press conference announcing his resignation, I think there was a big opportunity there to do something very significant in terms of the competitiveness of the economy and the sustainability of funding services in the long-term, and thats something Im disappointed (about) I certainly gave it a crack. He went on to say, There was an opportunity there where all State Premiers and the Federal Government were considering a whole range of options that I believe, if wed come together to some solution, we could have set up a more competitive economy that generated more growth, more revenue for services, and that wouldve been a great thing Thats something I strongly believe wouldve been fantastic. Bairds farewell comments reminded those of us who have championed tax reform about the distinct lack of leadership being shown by Federal leaders in this area. During the last Federal Election campaign neither major party took a policy of meaningful tax reform to the electorate. The only measures suggested were piecemeal. This simply isnt good enough. Tax reform is unfinished business in Australia. Governments need to listen to the broad cross section of the Australian community calling for a broader, fairer tax regime. Last year the Australian Institute of Company Directors, on behalf of our 39,000 members, called for comprehensive reform of Australias tax system. Our current system is too complex, and too reliant on inefficient taxes, particularly at state level. Stamp duties on property, in particular, distort decision making and contribute to the notorious immobility of our labour force. This means we are falling behind as a competitive tax economy in which to work, invest and save. It makes the job of State and Federal Governments harder too, limiting their ability to invest in infrastructure, boost productivity and deliver the services Australians need. The AICD has recommended holistic tax reform which, among other things, includes an increase in the GST rate to 15 per cent with an $11.6 billion funding boost to the states and territories, and compensation for low-income earners, alongside capital gains tax and superannuation reforms, cuts to personal and company tax rates, and incentive payments to states and territories for state tax reform. Baird recognised the problem and realised that, while a rise in the GST would never be politically popular, we couldnt continue to kick the tax reform can down the road to be dealt with by future generations. Baird proposed part of the solution when he called for an increase of the GST rate to 15 per cent. A broad-based consumption tax is one of the most efficient and stable revenue sources for governments. A higher rate would also allow states and territories to remove the inefficient taxes that inhibit growth and longterm prosperity. Despite his regrets, Baird ended on a hopeful note, seemingly confident that matters of tax reform would be dealt with in coming years. He had a crack at meaningful tax reform, but if his optimism is to be rewarded, Malcolm Turnbull and Scott Morrison need to have a crack too. Elizabeth Proust, chairman of the Australian Institute of Company Directors Picture: DAVID GERAGHTY opinion ELIZABETH PROUST CHAIRMAN, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS NT consumer credit surges CONSUMER credit demand surged in the Northern Territory last quarter. The Veda Quarterly Consumer Credit Demand Index measuring the volume of credit card and personal loan applications found during the December quarter last year the Territory led Australia on personal loan applications and had the second-highest number of credit card applications. Applications in both areas rose nationally by 7.7 per cent compared with 2015. In credit card applications the NT recorded a 4 per cent increase, beaten only by Victoria, which recorded 6.5 per cent growth. There was a significant pickup in the growth of personal loan applications in all states and territories in the December quarter. New South Wales and the NT tied at 14.5 per cent growth. Vedas general manager of consumer risk, Angus Luffman, said the strong results were driven largely by activity in personal loan applications, with growth predominantly coming from products offered by new entrants in the personal lending space. He said it did not translate to an increase in debt and consumers were being circumspect. The data from Vedas December Index showed the same increase in personal loan activity that is illustrated in recent credit data from the Australian Bureau of Statistics, which had personal finance commitments grow by 7.3% in November, he said. At the same time, the total debt outstanding on other personal credit, excluding housing, has consistently fallen since the start of 2016, down by 1.2 per cent for the year to November. These divergent movements suggest that consumers are being circumspect about taking on additional credit. Instead, they are taking ad vantage of the increased product options on offer to meet their needs. Despite the significant pickup in personal loan applications, the growth in applications for auto loans eased from 8.0 per cent in the September quarter to 4.5 per cent in the December quarter. Demand for mortgages rebounded strongly in the December quarter (+6.6%). The annual rate of growth in mortgage applications strengthened from 0.9 per cent in the September quarter of 2016, to an annual rate of growth of 6.6 per cent. Stronger mortgage applications were seen in most states and territories except the Northern Territory and Western Australia. Historically, movements in Veda mortgage applications have tended to lead movements in house prices by around six to nine months, with mortgage applications a good indicator of homebuyer demand, and is considered an excellent indicator of housing turnover. The strongest growth in mortgage applications in the December quarter was seen in the ACT. Mortgage applications continued to fall sharply in WA (-10.6%) and the NT (-10.8%). This is at odds with the recently released REINT report which found residential house sales continued to increase. The December 2016 quarter recorded an increase in sales activity, by 20.6 per cent. At the same time, the total debt outstanding on other personal credit, excluding housing, has consistently fallen since the start of 2016, down by 1.2 per cent for the year to November V E D A G E N E R A L M A N A G E R O F C O N S U M E R R I S K A N G U S L U F F M A N :. 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