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Monday, 18 October 1999
Page: 9804

Senator MACKAY —My question is to Senator Macdonald, Minister for Regional Services, Territories and Local Government. Can the Minister inform the Senate what the government is doing to assist Western Australian local government with its—by its own calculations—$3.5 million bill to implement the GST? Can the minister confirm that the total amount of funding from this government for WA councils to deal with the GST is a paltry $400,000 for a total of 144 councils—a miserly $2,780 each? Is the minister aware of a study which indicates that local government in Queensland faces a bill of around $7 million associated with the implementation of the GST, yet the federal government has provided Queensland councils with only $535,000—a total of $4,300 each? When will the minister give local government the money and information it desperately needs to cope with the impending GST?

Senator IAN MACDONALD (Regional Services, Territories and Local Government) —I genuinely thank Senator Mackay for her question to me. It is almost the first one I have had on local government this year, so I appreciate it. Thank you very much, Senator Mackay. You asked about Western Australia and you also mentioned Queensland. There have been a number of studies done by various people in relation to the costs of implementation of the GST. The most recent was done by the Victorian government through its Department of Treasury and Finance. I think it got Arthur Andersen to do that summary. That summary showed that most councils would benefit quite substantially from the GST.

Senator Mackay —This is the Kennett government?

Senator IAN MACDONALD —No; it is the Victorian government. But it was done by Arthur Andersen, one of the respected big seven accountancy firms. They found that there were substantial benefits. The report shows that there will be one-off costs to councils to implement them but the savings to councils each year will really go beyond that. There were some other reports done. The MAV originally did one, Senator, and you issued a press release on it. Remember that one where you said, `Cost of implementation—a million dollars per council'? Well, that turned out to be completely inaccurate.

Senator Mackay —Madam President, I rise on a point of order. The question I asked related to the Western Australian Municipal Association's own calculations of $3.5 million for implementation of the GST.

The PRESIDENT —There is no point of order.

Senator IAN MACDONALD —Most councils around Australia understand that the package has real benefits to them. Around $70 million worth of embedded costs to councils Australia wide will go. Councils in rural and regional Australia will benefit very substantially from the reductions in fuel costs—and even councils in the metropolitan areas. Whilst I acknowledge there will be some small cost involved in the implementation, my department together with the state local government associations are working very hard to make sure that every council in Australia is aware of what is involved. We are implementing a lot of training schemes, a lot of information and a lot of help with software. The government is assisting that in a financial way by providing some moneys to the various local government associations to go with the funds that they are already allocating towards bringing councils up to speed.

Across the board, councils will benefit. Ratepayers—the customers that use council services—get a pretty good deal because most of the services that are provided and the payments that are made to councils are GST free. So there will be no GST on rates, water or sewerage and at the same time councils will have substantially reduced costs. So the Western Australian Municipal Association—a very good organisation, I might say; a very well led and very professional organisation—understand the huge benefits to councils from this program. They also understand that, whilst there will be some one-off costs which the government is helping with, overall the package is a very good one for local government.

Senator MACKAY —Madam President, I ask a supplementary question. The Western Australian Municipal Association is indeed a very good association. They have calculated the costs of implementation of the GST at $3.5 million. Could the minister please answer that question, if nothing else? Further, is he aware that in addition WAMA has reported that members have been deluged with building applications prompted by the impending GST? Can the minister inform the Senate of the actions the government has taken to help Western Australian councils to deal with this? Will the minister provide councils around the country with GST transitional compensation to deal with these applications?

Senator IAN MACDONALD (Regional Services, Territories and Local Government) —Obviously, there is a boom in building applications. There is a boom right across Australia because the economy is going so well. There is a lot of building activity around and it is no different in Western Australia.

Senator Lightfoot interjecting

Senator IAN MACDONALD —As my colleague from Western Australia interjects, the Western Australian economy is booming.

Senator Cook —It is not.

Senator IAN MACDONALD —Argue with your own spokesman, Senator. She says there are a lot of building applications, which must mean that people have money and are keen to expand and do their building works. That is an indication of a good economy and an indication of people wanting to expand their dwellings and their offices. That is the same across Australia. (Time expired)