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Legislative Assembly for the ACT: 1999 Week 6 Hansard (22 June) . . Page.. 1741 ..
(2) By (a) name and (b) contracting party,
(i) what is the current cost (or output payment) for those services that will attract a GST under the IGA clause;
This information is not readily available and will be subject to the deliberations of the IDC tasked with implementing the GST when the final form of the Commonwealth package is known.Importantly, however, where the GST is added to an ACT agency payment, under the input credit arrangement, the agency concerned will seek a refund as an input tax credit thereby neutralising the budgetary impact and ensuring the final liability is directed to the consumer of the service.
(ii) what will be the cost plus GST for those services outlined in (i);
As above.
(3) Will the use of consultants and contractors by the ACT Government attract a GST.
Yes. A GST is a broadly based consumption tax which aims to tax private final consumption expenditure and is charged on the supply of goods and services. Consultants and contractors are employed on the basis of providing a service. Any contractual payment would attract the GST. The ACT agency will pay the GST to the contractor or consultant (who in turn is required to remit the liability to the ATO) and seek a corresponding tax input credit. The net effect to ACT costs is nil.
(4) What will be the overall impact on the ACT operating position of the payment of GST to the Commonwealth.
As already indicated, the effect of the reforms overall, is expected to reduce costs for Government. Embedded WST will be abolished and replaced with GST. However, as any GST can be claimed as a credit (except for functions that are input taxed) there will be a net reduction in the tax paid.
The ability to use input tax credits will more than offset the loss of the current WST exemption due to the effective removal of embedded taxes. This will result in costs declining for most agencies.
The final determination of the actual impact on ACT agencies is subject to the deliberations of the IDC and the final determination of the Commonwealth package itself.
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