Page 3034 - Week 12 - Tuesday, 17 November 1992
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Fringe Benefits Tax - Car Parking
MR DE DOMENICO: My question without notice is to the Chief Minister in her capacity as Treasurer. I refer the Chief Minister to the Federal Labor Government's decision to charge fringe benefits tax on car spaces provided to employees. I ask the Chief Minister: How much extra will it add to the ACT budget? How will any deficiencies be funded?
MS FOLLETT: I thank Mr De Domenico for the question, Madam Speaker, and I am delighted to throw what light I can on this issue. This is a piece of Commonwealth legislation and it relates, I am advised, to two measures: Firstly, changing the basis of assessing the fringe benefits tax liability; and, secondly, extending the fringe benefits tax liability to include employer car parking to employees. So we are pretty clear on that. As States and Territories do not pay Commonwealth income tax, the first measure could, in effect, double the cost of the fringe benefits tax to those governments, including the ACT, and the impact on the ACT is estimated to be an additional $1m. The extension of liability to include car parks provided to employees could also impose additional costs, again in the order of an additional $1m from the Territory. The amount depends on the definitions that are finally adopted in the Commonwealth's guidelines in relation to exemptions. Bear in mind that we have not seen every detail of that legislation at this point. The combined measures will certainly add to costs.
I heard a figure of some $20m bandied about on the ABC. I think that is a figure that is way out of kilter with the actual impact which, as I have said, is probably of the order of an additional $2m, and that is based on the current ACT experience. The full extent of our liability is yet to be established. We are going on the best advice that we have at the moment. We do need to see the Commonwealth legislation in its entirety to see what exemptions may be available and also, of course, to see the progress of that legislation through both houses of the Federal Parliament. So there are still several uncertainties about.
Madam Speaker, bearing in mind that cost of some additional $2m, and bearing in mind that we are not likely to have to meet that until well into the financial year, I do not think that it is going to be a problem for the current budget. If it were to come to fruition it would have to be budgeted for in the forthcoming budget. But, Madam Speaker, as I say, I am not in a position to be definitive about it because there are so many uncertainties. I should say, however, that I do, on this occasion and on other occasions, rather resent the Commonwealth unilaterally imposing this additional cost on the ACT without consultation and without compensation, and I think that it is appropriate that I make those views known to the Commonwealth.
MR DE DOMENICO: I have a supplementary question, Madam Speaker. Does the Chief Minister, therefore, after answering that question, concede that her claims about presenting a balanced budget have now been torpedoed by her Federal Labor colleagues, whether it is $2m, $10m or $20m?
MS FOLLETT: No, Madam Speaker, I do not concede that. I will not concede that, for this reason or for any other. As I have said, in what remains of this financial year, if this tax is passed, and given that we are looking at a proportion of some $2m, our ability to find that is reasonably good, and I do not expect that it would have an impact on the achievement of a balanced recurrent budget. That is my stated aim, and it has, in fact, been achieved by me in all budgets that I have brought down.
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