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Legislative Assembly for the ACT: 1999 Week 6 Hansard (22 June) . . Page.. 1739 ..

The legislation allows the number to be used by state and territory governments as a business identifier, for example, the ABN could be used as an identifier for ACT payroll tax or any other dealings with the ACT.

How it will affect the budget process?

Systems to account for the GST and enable input tax credits to be claimed will need to be put in place during 1999-2000.

What are the cash flow implications for Government and Agencies?

All agencies will be paying GST on purchases and claiming refunds via the input tax credit arrangement. Credits can be claimed on the basis of invoices and therefore the timing of cash payments in relation to the claiming of GST refunds will be important in minimising cash flow implications. Similarly, ACT agencies which supply goods and services will be required to collect GST and make remittances to the Australian Tax Office by the due date. Debt management strategies will need to be in place to ensure there are no adverse cash flow impacts.

Turning to the Member's specific questions.

(1) (i) will be subject to the GST;

Subject to the passage of the tax reform legislation through the Senate, in general, ACT Government agencies will have the same obligations as a business under the tax reform package. They will pay GST on their inputs, and charge GST on many of the goods and services they provide.

Consequently, all goods and services will be subject to GST except where there is special treatment under GST legislation, such as GST-free goods and services upon which GST is not levied, but GST paid on inputs can still be claimed by registered businesses eg. Health and Education.

The actual identification, and its application to the purchaser/provider framework is currently the subject of deliberations of an Interdepartmental Working Committee (IDC) established and chaired by the Office of Financial Management. It will also depend upon the final form of the legislation when it passes the Senate.

(ii) subject to (i), will be entitled to an input tax credit;

ACT agencies, as registered businesses, and paying GST will be able to claim the amount of GST paid on inputs back from the Australian Tax Office as an input tax credit. The work of the IDC will aim to identify such areas as part of the broader deliberations.

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