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Unformatted text preview: e costs. For the first 12 months following implementation of the GST the Commonwealth Government retains the discretion to
make unilateral changes to the GST base where the changes:
♦ are of an administrative nature (that is, are necessary to protect the integrity of the base or to prevent tax avoidance); ♦ are necessary to facilitate the implementation of the new tax; and ♦ have regard to the need to protect the revenue of the States. From July 2001, changes to the GST base of an administrative nature (as defined above ) will require the majority
support of the Commonwealth, States and Territories.
141 Commission on Fiscal Imbalance Australian Taxation Office
The States will compensate the Commonwealth for agreed costs incurred by the ATO in administering the GST. First Home Owners Scheme
The States will take on the responsibility for funding a new First Home Owners Scheme (FHOS). This funding may not
be drawn from Home Purchase Assistance funds provided through the Commonwealth State Housing Agreement
(CSHA). States will not introduce or vary any taxes or charges associated with home purchase with the intention of
offsetting FHOS benefits for recipients. APPENDIX B TRANSITIONAL ARRANGEMENTS IN THE INTERGOVERNMENTAL AGREEMENT
The following description (Appendix C of A New Tax System (Commonwealth-State Financial Arrangements) Act 1999)
sets out the IGA transitional arrangements and the method of calculation of Guaranteed Minimum Amounts.
Guarantee in Legislation
1) Commonwealth legislation will provide a State or Territory with an entitlement to an additional amount of funding from the
Commonwealth to offset any shortfall between its entitlement to GST revenue grants and the total amount of funding which
would ensure that the budgetary position of a State or Territory is not worse off during the transition period.
— In 2000-01, transitional assistance will be provided to a State or Territory as a grant or an interest free loan to
be repaid to the Commonwealth in full in 2001-02.
— In subsequent transitional years, transitional assistance will be provided to a State or Territory as a grant. Guaranteed Minimum Amount
2) The amount of a State or Territory’s entitlement to transitional assistance in a financial year will be calculated by subtracting
its entitlement to GST revenue grants from a “Guaranteed Minimum Amount” constructed in the following way:
State revenues forgone: financial assistance grants, revenue replacement payments and State and Territory taxes
as defined in Appendix A of this Agreement with the exception of stamp duties on marketable securities which will
be the amount as if fully abolished.
Reduced revenues: the amount by which States and Territories adjust gambling taxation arrangements to take
account of the impact of the GST on gambling operators.
Interest costs on cash flow shortfalls: the interest cost incurred by States and Territories as a result of the change to
cash flows arising from the replacement...
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