While all Heads of Government signed the IGA, they did so, knowing that the final shape of the tax reform package was unknown and could be subject to revision at the end of the day. This is principally why the ACT budget for 1999-2000, and forward estimates, are predicated on the assumption of the status quo in Commonwealth-State financial relations.

The focus of the work to date in all jurisdictions has primarily concentrated at the macro level concerning the development of the IGA in order to lock-in the funding arrangements underpinning the Commonwealth's national tax reform package. This approach was considered a priority in light of the Commonwealth's guarantee that no state or territory would be worse off under the compensatory package.

Overall, the effect of the reforms is expected to reduce costs to the ACT Government, conservatively estimated in the Commonwealth's Plan for a New Tax System, at some $10 million each year. Embedded WST will be abolished and replaced with GST. However, as any GST paid to provide services could be claimed as a credit (except for functions that are input taxed) there will be a net reduction in costs.

Given that the tax reform legislation has yet to pass the Senate, the level of information sought by the Member is simply not available in most instances and may not be for some time.

To illustrate why this is the case, a number of service wide issues still remain unclear and further work by governments and business will need to be undertaken. Ultimately, rulings made by the Australian Taxation Office may be required to clarify 'grey' areas.

Before answering the Member's specific questions, a brief outline of the more important issues under consideration are highlighted below for the information of the Member, including: