The Industry Commission has criticised state and territory governments over their industry incentive schemes on several counts. The first is that most of these schemes just transfer industry from one part of Australia to another, often at an overall cost to Australia, even if the receiving state occasionally gets some short-term advantage. The second is that the taxpayers and businesses in the receiving state often have to pay higher taxes to support the subsidy. Mostly, governments trumpet the created jobs, but with the jobs comes the need to provide infrastructure and services like roads, schools, social welfare and so on. The third is that many payments under these schemes are not transparent. Typically, governments hide under the excuse of commercial-in-confidence.
The ACT is one of the worst offenders on the secrecy front. The commission looked at two forms of assistance: that given in budgetary outlays and that giving in payroll-tax exemptions. The former, of course, is more transparent. It appears in the Budget papers. The latter is less transparent without a lot of further information. The ACT has the highest dollar-per-head payroll tax exemption of all the states and territories, at $256 per head, compared to the average of $176. And it has the lowest assistance per head in budgetary outlays, at $27 compared to the average of $137.
When helping industry, the ACT, it appears, prefers to do it under the table.
Overall, however, the ACT gives less assistance per head than any state or territory than Queensland. That is probably because we are a less industrial jurisdiction. But more importantly, the ACT is the youngest jurisdiction and so has had less time for its politicians to dream up self-congratulatory schemes to attract jobs.
The commission condemned the secrecy surrounding the ACT Government’s assistance programs. It said it was hard to work out the value of assistance because the figures were “”generally not available in public documents.”
Even the number of recipients of assistance was not available to the public. Details of the revenue forgone through tax concessions and the sale of leases at below market value were not available publicly. Generally the excuse was that the arrangements were commercial in confidence. This excuse is not good enough. A business is entitled to keep its commercial secrets from its competitors so the competitors do not get an unfair advantage. But knowledge of the level of assistance from the taxpayer is not a business’s secret. It is in the public domain. One of the conditions of accepting public help should be public accountability. A Government should be able to claim commercial-in-confidence in the lead up to establishing as assistance arrangement, otherwise it could be subjected to a clever campaign with one business playing off against another. But once the assistance is received, the public is entitled to be told who is getting it, what form it takes, how much is it worth, what return is the ACT getting from it.
The danger of not making such information available is twofold. There is a danger that corruption could develop unseen and there is a danger that the assistance is wasted or not used to best advantage without the test of public scrutiny.