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Legislative Assembly for the ACT: 1999 Week 12 Hansard (25 November) . . Page.. 3719 ..

MR SMYTH (continuing):

Mr Speaker, the event will go ahead. The event will be a big success. The plans for it will unfold. It will give Canberrans the chance to celebrate the new year in quite a spectacular fashion, and I look forward to it occurring.

MR WOOD: Mr Speaker, my question is to the Chief Minister as Minister for the arts. Chief Minister, you would be aware of concerns in the arts community about the impact of the GST on their activity as it depends on grants distributed through ACT arts funding programs. Is it the case that grants distributed through the Australia Council will be increased to compensate for the GST? If that is the case, what consideration has been given within the ACT to these issues, and are you able to assure ACT arts groups that they would not suffer through the GST?

MS CARNELL: Mr Speaker, it is certainly our intention to minimise any impact that the GST would have on any of our grants recipients, including the arts, basically because it is money that is flowing in a cyclic way through the system. Certainly, GST will be charged, but then, of course, that GST is paid back to the ACT and to other States because the money comes back to the States and to the Territories, based upon the Commonwealth Grants Commission allocations. So, on that basis, we should be getting more money, and on that basis we should be able to lift the grants to ensure that the GST impact is as little as possible, and that is certainly our intention. It would not be fair, and we do not want it to happen, if anybody suffers as a result.

The interesting thing is that it is not quite as simple, as Mr Wood would know, because the impact of the GST is very different in various areas. In some areas the input credit issues will very much balance most of the GST impact. In other areas it will not, because they are areas that do not have a wholesale sales tax impact on their particular product or services now. So, in some areas, it will be pretty close to 10 per cent and in some cases it will be much less, but it is our intention to ensure we minimise any impact.

MR WOOD: Thank you. When do you think it might be possible to advise ACT arts bodies about circumstances here? Secondly, is there a time delay here? The money comes back after you make the grants, so is that a difficulty for you?

MS CARNELL: Mr Wood actually asks a really sensible question.

Mr Humphries: What has gone wrong?

MS CARNELL: Mr Wood actually often does; it just does not flow to many of his colleagues, I have to say. Mr Wood, this is not just a problem with the grants. It is an issue that I am sure Mr Humphries is spending a fair amount of time on right now. There really are some quite significant upfront costs to the States and Territories with regard to the GST which flow back at some time in the future.

What we are doing at the moment is negotiating with the Federal Government to ensure that that does not happen; to ensure that the financial grants that come to the States and Territories are adequate to be able to handle those upfront costs. But, as we all know,

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