Page 1861 - Week 06 - Thursday, 19 May 1994
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APPENDIX 1:
(Incorporated in Hansard on 19 May 1994 at page 1768)
TREASURER FOR THE AUSTRALIAN CAPITAL TERRITORY
LEGISLATIVE ASSEMBLY
QUESTION WITHOUT NOTICE TAKEN ON NOTICE
11 MAY 1994
MS FOLLETT: On 11 May 1994 Mr Westende asked me a question relating to the increase in the ACT Governments liability for Commonwealth Fringe Benefits Tax, and I undertook to provide him with an answer.
MY ANSWER IS: As was discussed in the Assembly last week, the Commonwealth has increased the taxable value of fringe benefits from 48.25% to 93.79%. To retain an equitable relationship with tax on income, FBT became deductible for tax paying entities. The States and Territories however, not being subject to income tax, do not attract the benefit of a tax deduction for FBT liabilities.
The Commonwealth also expanded the FBT net to include some car parking.
The changes were announced in the Commonwealths 1992 Budget and took effect from 1 April this year. The Commonwealth has rejected claims for compensation for the impact of the changed arrangements on the States and Territories.
Fringe benefits and subsequent tax liability for the ACT are paid from budget allocations for each program for operational and administrative costs. Expenditure on this is not centrally controlled, but is disclosed in Departmental annual reports.
Based on total FBT liability for 1992-93, the last known financial year, the changed arrangements would result in an increase for the ACT of approximately $0.9m. However, program managers have had time to review the extent of fringe benefits and to take action to absorb the additional costs within budget estimates, which are adjusted for price indexation and, where appropriate, allowances for growth.
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