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A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999

1998-99

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

 

 

 

Presented and read a first time

 

 

 

 

 

 

 

 

 

A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999

 

No.      , 1999

 

(Treasury)

 

 

 

A Bill for an Act to provide financial assistance to the States, the Australian Capital Territory and the Northern Territory, and for related purposes

   

   

   



Contents

Part 1—Preliminary                                                                                                              1

1............ Short title............................................................................................. 1

2............ Commencement................................................................................... 2

3............ Outline of Act..................................................................................... 2

4............ Definitions.......................................................................................... 3

5............ GST revenue....................................................................................... 4

6............ Hospital grants.................................................................................... 6

7............ Determination of population of a State................................................ 8

8............ Index factor......................................................................................... 8

9............ Relativities factor................................................................................. 9

Part 2—Changing the rate and base of GST                                                       10

10.......... Changing the rate and base of GST................................................... 10

11.......... Definitions........................................................................................ 10

Part 3—Grants to the States                                                                                           11

Division 1—GST revenue grants                                                                           11

12.......... GST revenue grants.......................................................................... 11

Division 2—Other grants                                                                                          12

13.......... Franchise fees windfall tax reimbursement payments....................... 12

14.......... Competition Agreement payments.................................................... 12

Division 3—Payment of grants                                                                              15

15.......... Overpayment or underpayment of grant............................................ 15

16.......... Advance payments for GST year...................................................... 15

17.......... Treasurer may fix amounts, and times of payments, of financial assistance             15

Part 4—Miscellaneous                                                                                                        16

18.......... Appropriation.................................................................................... 16

19.......... Delegation by Treasurer.................................................................... 16

20.......... Determinations.................................................................................. 16

21.......... Regulations....................................................................................... 16

Schedule 1—Transitional arrangements                                              17

1............ Overview.......................................................................................... 17

2............ Guaranteed minimum amount........................................................... 17

3............ First GST year—GST revenue does not exceed guaranteed minimum amounts      17

4............ Second or third GST year—GST revenue does not exceed guaranteed minimum amounts     18

5............ First 3 transitional GST years—GST revenue exceeds guaranteed minimum amounts            19

6............ Prescribed transitional GST years—guaranteed minimum amount... 20

 



A Bill for an Act to provide financial assistance to the States, the Australian Capital Territory and the Northern Territory, and for related purposes

The Parliament of Australia enacts:



Schedule 1 Transitional arrangements

Note:       See section 12

   

   

1   Overview

                   This Schedule contains provisions that apply for the first 3 GST years and other GST years that are prescribed. Clause 2 requires the Treasurer to specify the guaranteed minimum amount for each State. Clauses 3, 4, 5 and 6 adjust the amount of grants, and provide for loans, in certain circumstances.

2   Guaranteed minimum amount

             (1)  The Treasurer must, before 10 June in a transitional GST year, determine the guaranteed minimum amount for each State for the GST year. The determination must be made in writing.

             (2)  Before making the determination, the Treasurer must consult each of the States.

3   First GST year—GST revenue does not exceed guaranteed minimum amounts

             (1)  This clause applies if the GST revenue for the 2000-01 transitional GST year is less than, or equal to, the sum of the guaranteed minimum amounts for all of the States.

             (2)  If this clause applies, a State is not entitled to the payment of so much of a grant under section 12 for the GST year as exceeds the guaranteed minimum amount for the State for the GST year.

             (3)  If, apart from this subclause, a State would have been entitled to the payment of a grant under section 12 for the GST year of an amount that is less than its guaranteed minimum amount for that year:

                     (a)  the amount to which the State is entitled under section 12 is to be increased by the amount worked out under subclause (4); and

                     (b)  the State is entitled to the payment, by way of financial assistance, of a loan worked under subclause (5).

             (4)  The amount of the increase for the GST year is:

where:

redistribution amount means the sum of amounts to which States are not entitled in the GST year because of subclause (2).

State shortfall means the amount by which the State’s guaranteed minimum amount exceeds the amount to which, apart from subclause (2), the State would be entitled under section 12 for the GST year.

total shortfall means the sum of the State shortfalls for the GST year.

             (5)  The amount of the loan to which a State is entitled under this subclause is the amount by which the State’s guaranteed minimum amount exceeds the amount to which the State is entitled under section 12 (as increased by paragraph (3)(a) of this clause) for the GST year.

             (6)  The Treasurer may deduct an amount equal to the amount of a loan to a State under subclause (5) from any amount that the State is entitled to receive by way of financial assistance under this Act for the 2001-02 transitional GST year.

4   Second or third GST year—GST revenue does not exceed guaranteed minimum amounts

             (1)  This clause applies if the GST revenue for the 2001-02 or 2002-03 transitional GST year is less than, or equal to, the sum of the guaranteed minimum amounts for all of the States.

             (2)  If this clause applies, a State is not entitled to so much of a grant under section 12 for the GST year as exceeds the guaranteed minimum amount for the State for the GST year.

             (3)  If, apart from this subclause, a State would have been entitled to the payment of a grant under section 12 for the GST year of an amount that is less than its guaranteed minimum amount for that year:

                     (a)  the amount to which the State is entitled under section 12 is to be increased by the amount worked out under subclause (4); and

                     (b)  the State is entitled to the payment, by way of financial assistance, of a grant worked under subclause (5).

             (4)  The amount of the increase for the GST year is:

where:

redistribution amount means the sum of amounts to which States are not entitled in the GST year because of subclause (2).

State shortfall means the amount by which the State’s guaranteed minimum amount exceeds the amount to which, apart from subclause (2), the State would be entitled under section 12 for the GST year.

total shortfall means the sum of the State shortfalls for the GST year.

             (5)  The amount of the grant to which a State is entitled under this subclause is the amount by which the State’s guaranteed minimum amount exceeds the amount to which the State is entitled under section 12 (as increased by paragraph (3)(a) of this clause) for the GST year.

5   First 3 transitional GST years—GST revenue exceeds guaranteed minimum amounts

             (1)  This clause applies if the GST revenue for the 2000-01, 2001-02 or 2002-03 transitional GST year is more than the sum of the guaranteed minimum amounts for all of the States but the amount of the grant to which at least one State is entitled under section 12 is less than the guaranteed minimum amount for the State.

             (2)  If, apart from this subclause, the amount to which a State would be entitled under section 12 is more than the guaranteed minimum amount for that State for the GST year, the amount to which the State is entitled under that section is instead worked out using the formula:

where:

excess GST amount is the amount by which the GST revenue for the GST year exceeds the sum of the guaranteed minimum amounts for all of the States for the GST year.

guaranteed minimum amount means the guaranteed minimum amount for the State for the GST year.

State excess is the amount by which the amount to which, apart from this subclause, the State would be entitled under section 12 exceeds the guaranteed minimum amount for the State for the GST year.

total excess is the total of the State excesses for each State to which this subclause applies for the GST year.

             (3)  If, apart from this subclause, the amount to which a State would be entitled under section 12 is less than the guaranteed minimum amount for that State for the GST year, the amount to which the State is entitled under that section is instead the guaranteed minimum amount for the State for the GST year.

6   Prescribed transitional GST years—guaranteed minimum amount

             (1)  This clause applies for any GST year that is prescribed to be a transitional GST year for the purpose of paragraph (b) of the definition of transitional GST year in section 4.

             (2)  If the amount to which a State would be entitled under section 12 is less than the guaranteed minimum amount for that State for the GST year, the State is entitled to a grant equal to the shortfall.