Page 1801 - Week 07 - Tuesday, 18 August 1992
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Mr Connolly - the answer to the Members question is as follows:
(1) .The Australian Taxation Office has ruled that Totalcare Industries Limited is exempt from Sales Tax at the federal level under Item 74 of the first schedule to the Sales Tax (Exemptions andClassifications) Act. This ruling is based on the current status of court decisions but may be. reviewed in light of future decisions on cafes currently before the courts.
Notwithstanding the current exemption from sales tax at the federal level, Totalcare is liable to pay an equal amount of otherwise applicable sales tax, on purchases made by the company, to the ACT Government as a sales tax equivalent.
(2) No. Totalcare is liable to pay all taxes and charges which would apply to similar, but privately owned enterprises. The payments are made to either the Federal Government or to the ACT Government in the form of direct taxes or charges or a federal tax equivalent.
(3) Yes
(4) No. The company:
(1) earns revenue from its linen, sterilising and incineration operations from normal commercial sales of these products and services
(ii) operates its Engineering, Automotive and Transport services on a cost recovery basis from ACT Health, and
(iii), has working capital borrowings in place from ACT Treasury. Interest is paid on these borrowings.
(5) and (6) Operating costs of the linen service of the former Health Services Supply Centre (HST) cannot be confirmed at $4.00 per kilogram. For the majority of the time since original commissioning of the facility in 1975 the HST operated as a branch of the ACT Board of Health and its antecedent bodies. While direct cash operating costs were accounted for at the operating centre level other costs incurred were accounted for within-other . budget allocations of Health. As such,
. full operating costs were never costed against the centre.
(7) (8) (10) and (11)
Matters of pricing, production volumes and production staffing levels are commercial-in-confidence to the company and disclosures of this information would be detrimental to the companys competitive position in the market.
(9) Yes. The company has full responsibility for management of its cash flow and pays interest on borrowings for working capital and capital expenditure.
(12) Yes. Totalcare has been established on .a similar commercial footing to its competitors. The company meets the full regime-of applicable taxes and charges. .
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