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Friday, 5 October 1984
Page: 1331


Senator MAGUIRE —My question is to the Minister representing the Treasurer. I refer to the defeat in the Senate on four occasions of the Government's legislation to recover taxes which have been evaded under the bottom of the harbour schemes. Does the tax sharing formula which enables State governments to share in Commonwealth revenues also have the effect of making State governments share in revenues lost to the Commonwealth Budget as a result of the defeat of the Government's tax avoidance and evasion legislation? If the State governments do share in the revenue losses, will the Minister indicate the scale of those lost revenues?


Senator WALSH —Under the existing tax sharing arrangements, the States and the Northern Territory in total receive some 20.72 per cent of total Commonwealth tax collections in the previous year. Therefore, as Senator Maguire has correctly implied, to the extent that Commonwealth revenues are reduced the revenues of the States are automatically reduced in the succeeding year. Of course, it is correct that on four separate occasions tax recoupment Bills, not always the same Bill, have been rejected by the Senate. On one occasion, if the tax recoupment Bill when put to the Senate had not been rejected by the Senate, some $570m or thereabouts of additional revenue would have been collected by the Commonwealth, although it would not have all fallen due in one year. Overlooking the lagged effect, of course, the $570m which was not collected by the Commonwealth because of the actions of the Senate would have provided to the States and the Northern Territory in total some $67m and would also, I might add , have provided to local government authorities throughout Australia an additional $10m, or something greater than that amount, as their share of that tax revenue, which was not collected because of the actions of the Senate.

However, the $67m additional revenue which would have been distributed to the States and the Northern Territory in total because of the minimum guarantees applicable to some States, would not have been shared in the same proportions as the revenue payments actually made have been shared. I make that explanation because I am about to cite figures for a couple of States as the additional revenue that would have been received had the additional Commonwealth taxation revenue of $570m been collected. For example, New South Wales would have received an additional $30m and Queensland would have received $25m. Senator Macklin, as a reputed representative of the State of Queensland, might well reflect upon the fact that, as a result of the vote that he cast in the Senate- to be fair to him, half the members of the Senate cast a vote in the same way- the State of Queensland will automatically receive $25m less than it would have received had that particular tax recoupment Bill been passed by the Senate. It is something that I particularly recommend that Senator Macklin reflects on. If I may be so bold, I also recommend that the electors of Queensland think about that when they are next casting their vote for the Senate.