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Wednesday, 15 March 2000
Page: 12900


Senator Faulkner asked the Minister representing the Minister for Health and Aged Care, upon notice, on 2 September 1999:

With reference to the effect of the Goods and Services Tax (GST) on the internal operations of the Minister's portfolio (that is, not relating to the services provided to the public), and in relation to each of the agencies within the portfolio:

(1) What preparations have been undertaken to date in regard to the introduction of the GST on 1 July 2000.

(2) (a) What has been the cost of these actions already undertaken; and

(b) how much of these costs relate to (i) consultancies (ii) staff training (iii) computer software (iv) extra staff (v) stationery, and (vi) other (please specify).

(3) Was the cost of undertaking this work included in the portfolio's 1999-2000 Budget appropriation; if so, how was this funding identified; if not, what other area of funding has been used for this purpose.

(4) What future preparations are planned or expected to be required in regard to the introduction of the GST on 1 July 2000.

(5) (a) What is the total cost of these actions planned, or the estimated cost of expected actions; and

(b) how much of these costs relate to (i) consultancies (ii) staff training (iii) computer software (iv) extra staff (v) stationery, and (vi) other (please specify).

(6) Was the estimated cost of undertaking this future work included in the portfolio's 1999-2000 Budget appropriation; if so, how was this funding identified; if not, what other area of funding has been used for this purpose.

(7) Is there expected to be any change in the ongoing running costs of the department/agency after the commencement of the GST; if so, what is the extent of the difference in costs.

(8) Are there any other GST-related costs which the portfolio agencies will incur prior to the commencement of the GST; if so, what are those costs.


Senator Herron (Minister for Aboriginal and Torres Strait Islander Affairs) —The Minister for Health and Aged Care has provided the following answer to the honourable senator's question:

(1) The Department of Health and Aged Care has:

Set up a project team within Portfolio Strategies Division with specific responsibility for internal GST issues to ensure implementation proceeds as smoothly as possible;

Engaged consultants to assist in the formulation of a detailed GST implementation strategy, and a list of GST issues affecting the Department;

Begun reviewing contracts spanning 1 July 2000 to determine GST impact;

Commissioned a review of the Department's financial management system to ensure it has the capacity to handle the new tax framework; and

Begun compiling information on Departmental activities/outputs to estimate savings from indirect tax reform using Econtech computer model.

(2) (a) Estimated cost to date (up to 1/9/99) is $124,332

(b) estimated cost breakdown is:

(i) consultancies, $1 200

(ii) staff training, $4 440

(iii) computer software, $0

(iv) extra staff, $0

(v) stationery, $0

(vi) other (please specify)

Existing staff, $117 492

Legal advice,

Publications, $1 200

(3) Costs were not specifically included in the portfolio's 1999-2000 Budget appropriation; work to date has been funded out of existing resources.

(4) Future preparations will include:

Identification and classification of departmental inputs;

Production of a detailed GST implementation strategy, and a comprehensive list of GST issues affecting the Department;

Completion of the review of contracts spanning 1 July 2000 to determine GST treatment;

Maintenance and updating of a comprehensive risk management plan for GST implementation in the Department;

Delivery of an in-house training program for program staff with implementation responsibilities;

Review the financial management system to ensure it has the capacity to handle the new tax framework ; and

Compiling information to Departmental activites/outputs to estimate saving from indirect tax reform using the computer model produced by Econtech.

(5) Much of the detailed work required to implement the GST needs to take account of regulations to be determined by the Minister for Finance and Administration, and Australian Taxation Office rulings which may not be finalised for some time. The Department and Portfolio agencies will be seeking specialist assistance to provide guidance and expertise in the detailed planning for implementation of the GST. It is therefore too early to estimate accurately the total or particular costs of planned actions. The following estimates, however, reflect the information available at this time.

(a) the estimated cost of actions planned is $755 150

(b) estimated cost breakdown is:

(i) consultancies, $69 950

(ii) staff training , $138 200

(iii) computer software, $156 500

(iv) extra staff, $0

(v) stationery ,$7 500

other (please specify)

Existing staff, $383 000

(NB. “Existing staff” figure represents salaries and on-costs of a small team of existing Departmental staff set up to handle internal aspects of the transition. Other staff will be involved, but it is not possible at this stage to estimate accurately how many and for what periods.)

(6) Costs were not specifically included in the Portfolio's 1999-2000 Budget appropriation; work to date has been funded out of the existing resources.

(7) There will be a change in ongoing running costs due to the effects of the GST. It will not be possible to estimate the extent of savings from indirect tax reform.

(8) There are no other known GST-related costs that the Portfolio agencies will incur prior to the commencement of the GST.