Page 1542 - Week 05 - Tuesday, 31 March 2009

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .

Australia’s system of GST has now been in place for nearly nine years. Apart from some reasonably significant amendments that were made in the first couple of years of the operation of the GST to bed down the new policy, there has been little change to the overall policy since that time. The most significant change to affect the GST occurred late in 2008, although this has not had any effect on the GST policy itself.

The commonwealth and the states agreed on a new IGA, a new intergovernmental agreement. As part of this agreement, there were some changes made to the way in which the GST policy is to be administered and the particular change that is the subject of this bill relates to the way in which the commonwealth is paid for the collection and administration of the GST.

Under the previous IGA arrangements, the commonwealth government collected the GST revenue and each month passed these funds through to the states. As a separate set of transactions, the states then paid the commonwealth for the administration of the policy, again on a monthly basis. This seems to be a wasteful arrangement, as the states had to make separate payments to return funds to the commonwealth that the commonwealth had just handed over to the states.

The proposal in this bill will put in place the provisions of the new IGA whereby the commonwealth will net out the monthly payment of GST to each state, the amount that covers the cost of administration for that state or, in this case, territory. This seems an eminently sensible and important issue to ensure there is appropriate transparency in the transfer of these funds. I have been assured that transparency will be retained. We will know what the administration fee will be, how much will be paid by each state each month and when the transaction will take place.

I think it is also pertinent to note that the GST has been a boon for the states and territories in terms of revenue that it has generated and, apart from the first two years when the policy was settling down, the GST has delivered significant gains for the ACT, as it has done for the other states. In the case of the ACT, for the years 2002-03 to 2007-08, there has been a gain ranging from $10 million to $96 million for the initial estimate of GST for each particular year. It is a very simple bill to put these amendments in place and the opposition will be supporting the bill.

MS HUNTER (Ginninderra—Parliamentary Convenor, ACT Greens) (10.39): The Greens will be supporting this amendment to the Financial Management Act 1996, as we appreciate that the commonwealth is seeking to alter current arrangements with regard to the administration of costs payable by the ACT for the provision of GST payments. We understand that the amendment will enable the commonwealth to deduct administration costs payable by the territory regarding the receipt of GST payments.

The Greens also understand that the government is seeking to have this bill dealt with in an urgent manner as there are provisions that need to be made with regard to the upcoming 2009-10 budget. The Greens will support this request in order to allow adequate time for ACT Treasury to make appropriate arrangements.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .