Senator BROWN (4:22 PM) —This question is relevant to A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999 and to the minister's responsibility to answer. After all, we are being asked to vote here for a process by which local government and its statutory corporations and authorities will operate as if they are subject to the GST—they will be required to register. More pertinently, this legislation provides for states and territories to have to withhold revenue from local government if it is not paying its GST. So it is not good enough for the minister to say, `Go and ask somebody else about it; this is my legislation, but I am not dealing with it here.' That is what this committee is about and it is appalling that the minister cannot give any indication to the committee as to what the impact of the GST will be on the authorities.

Alternatively, we could ask him how much he expects a state or territory government might withhold, or what measures states or territories are going to take to help local government if it gets into financial difficulties because suddenly it finds itself with a very sizeable GST bill. But the minister cannot even say what the percentage impact on finances is going to be, let alone what the global cost to local government around the country will be. Inherently in what he says, local government is going to be paying very considerable sums above and beyond current expenditure to the Australian Taxation Office—to the Howard government, courtesy of the Democrats—for the GST. The minister knows that local government does not have the backup that federal and state governments have, and some local governments are going to find themselves in an invidious situation because of this legislation. The minister ought to be able to say what the impact is going to be, because I believe it is incumbent on the federal government to make sure that local governments are assisted before the event so that they do not find themselves in default in a way which prevents them continuing to manage or, worse, to provide services.

This is pretty draconian. It says that, if local government does not pay the GST, state and territory governments have to, by law, withhold funding to that amount. It is appalling that the minister says, `I don't know what the impact is going to be. This is my legislation, but either I do not understand it or you should go and ask somebody else.' I again register my objection over the failure of the government to inform us and therefore local government, now, before we vote on this matter, as to what the impact is going to be and what measures the government has put in place to assist local government, which is going to face the penalty under this legislation if it cannot handle the impact of GST.