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Labor lies on local Government and Tax Reform



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ent By: Media M o n ito rs A u s t r a l i a ;

123; 9-Sep-98 7:30PM; Page 7

M e d i a

R e l e a s eTHE HON ALEX SOMLYAY MP mister fef lUgtmul Development, Terri ban · end Local Go w m i K L A B O R L I E S O N L O C A L

G O V E R N M E N T A N D T A X R E F O R M

Labor's spokesperson on local government issues, Belinda Neal (a candidate for the NSW electoral division of Robertson), is just p la n wrong in her description of the way in which the Coalition's Tax Plan affects local government,

Ms Neal got just about everything wrong when talking yesterday on the Gareth McCray Show on radio station 2KY.

She was wrong to say that *a lot o f services, including garbage services, will be subject to the GST’.

She was wrong to say that ‘people will be paying more for local government services as a result of the GST.1

She was w rong to say that * local government will receive no direct funding whatsoever, ’

And she was wrong to say drat ‘there would be no guarantees' for continuing local government funding.

The facts are that the Coalition has recognised the special role played by local government in our community by treating them in much the same way as the health and education sectors and benevolent institutions with regard to the GST.

Most council charges will In fact be GST-free.

> Council rates will be GST fr e e ;

> Council water and sewerage charges will be GSTfreer,

> Compulsory rubbish collection charges will be GST free,

> Regulatory charges (such as planning fees and dog licences) will be GST free, and

> Council fines and penalties will be GST free.

This means that these activities will not be taxed. Ratepayers consuming these services will not have to pay the GST.

Ms Neal has also completely misrepresented the new financial assistance arrangements that are in the Coalition's Tax Plan.

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The Coalition win guarantee that the Stales meet then financial responsibilities in relation to local government. It will be an unahakeable condition of payment of GST revenues to the States that all conditions attached to the payment of local government funding will be maintained.

> General purpose, untied financial assistance grant· to local government will continue;

> The untied local roads component of tile general purpose giants will continue; and

> A nnual escalation factors, based on adjustments for inflation and population growth, will continue.

Ms Neal has also ignored the feet that other elements o f foe Coalition's Tax Plan will result in substantial reductions in council running com . It will be cheapo· for councils to do business because:

> embedded wholesale sales tax will be abolished (which will save councils around S70 million per year);

> councils will be able to claim a full refbnd of all of the GST paid by councils on their business inputs - that is, on the goods and services they buy to provide services to their communities; and

> councils will be able to take advantage o f the new tax and excise arrangements on fuel (which will reduce the excise payable on diesel from 43 cents p o litre to 18 cents pet litre for on-road heavy vehicles, and from 43 cents per litre to zero for off-road vehicles).

Some councils have calculated that these measures will save them in the order of $600 000 per year. Savings o f this magnitude will mean that councils can reduce debt, improve services and reduce rates and charges. ·

Local government is a winner from tax reform and Ms Neal's shabby attempts to claim otherwise do her no credit.

Labor offers no credible alternatives for local government and it is not surprising that die Local Government Association has described Labor’s tax proposals as ‘uninspiring and disappointing.1

ENDS 9 September

1998

Contact: Graeme Hall eft 0419 218 469