Senator ELLISON (Special Minister of State) (4:08 PM) —I will clarify the point I am making. It is more a question of how the withholding will be done. There is of course the provision that Senator Brown refers to, that there will be a withholding of funds if there is no GST paid. Local government will have that provision in relation to the legislation. The question of how it will be gone about is what is being worked out at the moment. Senator Brown asked a second part of the question. Perhaps he could just refresh my memory with that?

Senator Brown —The second part was: is there a similar arrangement for withholding revenues going from the Commonwealth to the states, where the states are in default of paying the GST? And, regarding the first part, what is the time limit—the limit of grace—given to local government to pay their GST before it will be required that state or territory governments withhold revenues from them?

Senator ELLISON —The situation with regard to the states and territories is somewhat different to local government. The states have actually locked themselves in to paying the GST. It has a concrete base to it—if you like—so that there is no anticipation that states will not be paying GST. That is part of the agreement. So that does not arise. That is the difference between the state and Commonwealth relationship versus the Commonwealth and local government relationship. I will just take instructions on the other question in relation to the time. I understand that the period of grace that you referred to is part of the arrangements that are being worked out.