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Legislative Assembly for the ACT: 2000 Week 1 Hansard (17 February) . . Page.. 299 ..

MR HUMPHRIES (continuing):

discussing the accounting treatments in financial statements, has only just released - in January 2000 - its abstract dealing with the accounting for the GST. It is therefore not surprising to see no effect of the GST in the draft budget.

With regard to the draft determination of GST-exempt taxes and charges, this means that fees, taxes and levies would be GST exempt and GST would apply only to charges and services which are commercial in nature. Even if the GST were applied to taxes and charges, the ACT would collect and remit it to the Commonwealth, with zero net effect on the ACT budget. As I said on the day the draft budget was released, the issue is one of cash flow, which does not impact on the budget bottom line.

The ACT has been working with the Commonwealth for some time on establishing the exemption list and determining the impacts of the GST. The charges listed as exempt by the Commonwealth Treasurer have already been incorporated into the ACT Government's overall GST implementation strategy, which I will speak about shortly. The list proposes GST-exempt treatment for a number of important ACT charges, such as the insurance levy, payroll tax, stamp duties, registration board fees for dentists, nurses, doctors and other like professionals, business registration fees and dog registration, to name a few. The Government is assessing the detail of the draft declaration now, as well as analysing the needs of ACT Government systems to ensure that they are GST ready.

Mr Speaker, as I mentioned before, the GST will deliver to the States and Territories access to a growth tax. For the first time the ACT, along with other States and Territories, will be provided with a share of a tax that in general terms is projected to grow at a rate above that of GDP. As such, the Territory and the States can expect and will receive a greater level of guaranteed funding from the GST than they would have if the current arrangements of annual financial assistance grants were to continue. That is why the Chief Minister agreed to the arrangements in the first place at the 1999 Premiers Conference. State and territory heads of government have been crying out loudly for many years to gain access to a broader tax base. The attainment of this goal is, from the States' perspective, one of the major achievements of tax reform.

I would like briefly to cover the ACT's perspective to ensure that our agencies will be GST compliant by 1 July 2000. The broad base of the GST will mean that ACT government operations will also be subject to the GST. However, the ACT Government, like all registered businesses, will receive a refund from the ATO of any GST paid on inputs. The ACT government agencies are therefore in a similar position to businesses in that GST paid on our purchases will need to be properly accounted for in order to ensure a full refund from the ATO.

The Department of Treasury and Infrastructure has been given the responsibility for assisting the ACT general government sector agencies to successfully meet the administrative and practical requirements of the GST. A steering committee within the Department of Treasury and Infrastructure has been established to manage the implementation of the GST for the ACT Government at the whole-of-government level, monitor developments in other jurisdictions and identify areas of common interest with a view to sharing information and resources.

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