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Government to move bizarre amendment to GST.



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MEDIA RELEASE

 

Wayne Swan M.P (Member for Lilley)

Shadow Minister for Family and Community Services

 

08 February 1999

 

Government to move bizarre amendment to GST

 

 

Despite the fact that Minister Truss did not understand his own government’s GST bill, in question time today the attached letter from the Treasurer (issued only to Coalition members on Friday night) confirms the Howard Government intends to amend how the GST will apply to site fees paid by mobile home and caravan park residents.

 

This is policy making on the run.

 

This GST nasty was never included in the tax package the Howard Government took to the Australian people during the recent Federal election, and was buried in the fine print of their GST Bill.

 

Under their new plan the site operator will decide whether the site fees will be input taxed, or whether a GST will apply directly to the fee (100% for short-term residents, 50% for long-term residents).

 

Given the choice of having to pay the GST with no input credits what operator is going to accept the input tax option. It will be cheaper for them to make residents pay the GST.

 

The simple fact is the Government’s bizarre change requires legislation and will do nothing to alleviate the burden for most long-term residents in mobile homes and caravan parks.

 

Even worse, residents will find themselves without any certainty or ability to plan for the future because every twelve months the site operator can change their minds.

 

A significant proportion of mobile home and caravan park residents are retirees, and they can ill afford the likely $8 per week the GST will add to their site fee.

 

With the framing of their unfair 10% GST on the essentials of life, the Howard Government has singled out some of our nation’s most disadvantaged for tougher treatment than everyone else.

 

These are the only renters who will have the GST imposed directly on their accommodation, and Labor will continue to highlight this in every mobile home and caravan park around the country.

 

 

For further information call Wayne Swan on 0418 795 329

Further information on the GST can be accessed from: http://www.ecn.net.au/~lilley

 

 

ATTACHMENT

 

 

TREASURER

 

PARLIAMENT HOUSE

CANBERRA ACT 2600

Telephone: (02) 6277 7348

Facsimile: (02) 6273 3420

 

Dear

 

I am writing to you about the treat ment under the GST of long term accommodation in caravan parks and relocatable/mobile home parks. You may have received representations on this issue.

 

Caravan park and relocatable home park operators have expressed concerns that they will have to charge GST on rents they collect from long term occupants. They argue that this cost is imposed on rents payable by tenants of other residential accommodation and that they are commercially disadvantaged thereby. It is not the Government's policy that occupants of caravan parks and relocatable/mobile home parks should suffer any such disadvantage.

 

Division 87 of the A New Tax System (Goods and Services ) Bill 1998 , introduced into Parliament on 2 December 1999, provides concessionary treatment of long-term commercial accommodation. These special provisions address the potential GST compliance difficulties for commercial accommodation providers who offer a mix of short and long-term accommodation.

 

However, in some cases where commercial residential premises provide no or very little short-term accommodation the special provisions may not provide the administrative simplicity and flexibility originally sought. The Government has therefore decided to allow such accommodation providers a choice of applying the Division 81 treatment for long term accommodation or applying the ordinary input taxation rules for residential rents; that is, not charging GST for services (including rent) supplied, but not being entitled to input tax credits.

 

The option will be available to providers of long-term accommodation in commercial residential premises, including caravan parks and relocatable/mobile home parks. The usual GST rules would apply to any supplies of accommodation in commercial residential premises not exceeding a 27 day period. An operator of commercial residential premises may opt to change the treatment they use after a minimum period of 12 months under one treatment.

 

The option is up to the operator. This gives them the discretion to choose the tax treatment that serves them best.

 

I trust that this will allay any concerns that may be expressed by your constituents on this issue.

 

Yours sincerely

 

 

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