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Taxation, equity and local government

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P R E S S R E L E A S E T H E S £ H * U

Senator Peter Rae, Shadow Minister for Finance

6 March 1985 9/65


"The coincidence in timing of the growing debate In relation to the forthcoming Tax Summit, and the holding of the Inquiry into Local Government Finances is Fortunate. Perhaps this will help concentrate attention on an area of gross taxation distortion” , the Shadow Minister for Finance,

Senator Peter Rae, said in Launceston today. .

"There Is a gross inequity in the extent to which f

both Commonwealth and State-owned government enterprises are able to own land both for their own off­ ice purposes and for trading or investment purposes and yet avoid liability for local government rates. Some do make ex gratia payment?,but others do not go even that far· · '

"Where business activity is carried out by government in competition with the private sector, the avoidance of liability for rates as well as for other state and Commonwealth taxes can give that government enterprise a great advantage and make competition · unfair.

"Where rates are avoided by Commonwealfch or state government enterprises, then the remainder of the ,

taxpayers in the area must pay a proportionately :

higher rate. The incidence of this can vary according ;

to the extent to which a local government area has j

the -misfortune to play host to such enterprises. ;

"This problem would be magnified if the proposal put forward by the Department of Finance is implmeneted, and the Commonwealth's 2 percent general revenue Assistance j to Local Government is withdrawn", Senator Rae concluded. j

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. Contact j Pdp Rowell (003) 31171»