Skip to main content
Home
  Email Link  

Report Details


Committee Name:

Constitutional Affairs Committee (1989 - 2001)

House:

Legislative Council
Report Type:Report

Title:

The Financial Relations Agreement (Consequential Provisions) Bill 1999 and the State Entities (Payments) Bill 1999
Report No:44
No of Pages:17
Physical Location:Legislative Council Committee Office

Presentation Date:

11/23/1999


Click here to view the report


Hide details for Executive Summary and RecommendationsExecutive Summary and Recommendations
1 Executive Summary

1.1 The purpose of the Financial Relations Agreement (Consequential Provisions) Bill 1999 (the Financial Relations Bill) is to put in place a number of measures to reform Commonwealth-State financial relations required by the commencement of the Goods and Services Tax (GST) from July 1 2000 as agreed by the Commonwealth and all States and Territories in June 1999. The full agreement, known as the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations (the IGA), is attached as Schedule 1 of the Financial Relations Bill.

1.2 In addition to attaching the IGA as a schedule, the Financial Relations Bill gives effect to a number of matters contained in the IGA, namely:
          ceasing to apply financial institutions duty from July 1 2001;
          ceasing State diesel subsidies as a result of the new Commonwealth scheme;
          ensuring payroll tax is not levied on top of GST;
          ceasing to apply the stamp duty on shares quoted on a recognised stock exchange from July 1 2001;
          adjusting stamp duties to be inclusive of GST; and
          abolishing the tobacco sellers’ licensing scheme.

1.3 The purpose of the State Entities (Payments) Bill 1999 (the State Entities Bill) is to provide for GST equivalent payments to be made by State and local government entities to the Australian Taxation Office. It also gives the State Treasurer the power, if required, to issue written directions to State and local government entities to make GST equivalent payments.

1.4 Under the IGA, Commonwealth, State and local governments and their agencies will voluntarily comply with Commonwealth GST legislation as if they were subject to the GST legislation. This avoids the Constitutional problem created by section 114 of the Constitution which prevents the Commonwealth taxing the property of the States.

1.5 The State Entities Bill provides the legal authority for State and local government entities to voluntarily comply with the provisions of the GST legislation where it would otherwise not apply by authorising State and local government entities to make GST equivalent payments.

2 Recommendations

2.1 This report outlines selected clauses and parts of the Financial Relations Agreement (Consequential Provisions) Bill 1999 and the State Entities (Payments) Bill 1999 which require explanation.

            Recommendation 1: The Committee recommends that all clauses of the Financial Relations Agreement (Consequential Provisions) Bill 1999 be passed.

            Recommendation 2: The Committee recommends that all clauses of the State Entities (Payments) Bill 1999 be passed.