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Wednesday, 8 December 2004
Page: 108

Senator COONAN (Minister for Communications, Information Technology and the Arts) (4:50 PM) —I think it is important to put on record the reasons why the government does not support the opposition's amendments. As was explained earlier, this bill makes minor clarificatory amendments to the GST rules applying to treatment of retirement villages. These rules include a robust assessment process to ensure that GST-free treatment applies to those in need of daily living or nursing assistance. These provisions became necessary to remove the potential for an ATO ruling that might have had the effect of altering the intent of the government's legislation.

However, the amendments that the opposition is moving will undermine this process by removing the power for the aged care minister to make a determination of the level of care services that residents of serviced apartments must require in order to qualify for GST-free accommodation and certain services. This, quite simply, would place the ATO in the position of having to assess whether residents of serviced apartments have the required minimum care needs and who is entitled to receive them. It will come as no surprise to those listening to this debate that the ATO simply does not have the expertise to make such assessments and potentially have to issue rulings on this matter, and it would create the kind of uncertainty that the bill is designed to remove.

Moreover, the opposition amendments would fundamentally change the current assessment process and would potentially allow all occupants of retirement villages to be provided with GST-free treatment in respect of their accommodation regardless of their needs—again, an unintended consequence. Such an outcome could also have significant GST revenue implications which, on very short notice, we have not been able to assess. As all GST revenue is passed on to the states and territories it would be necessary for the state and territory treasurers to approve the amendments the opposition is moving if they amounted to a change to the GST base, which I think they probably do. Since they broaden the exemption, on face value, beyond the government's original intent, we are not in a position to support them. I am not aware of whether the opposition has this approval—Senator McLucas or other earlier speakers, I understand, may not have dealt with it—but, if insisted on, these amendments will potentially delay what is a necessary but minor clarificatory measure.

The opposition has quite wrongly criticised the period over which this issue has developed without recognising that it was a potential ATO ruling and not the government that raised concerns. In fact it was in my previous portfolio that I became aware of the potential effect of the possible ATO ruling. So what we are now looking at is an eleventh-hour amendment from the opposition. In my view this is not an appropriate response on the part of the opposition for the reasons I have outlined—and I think they are substantial reasons. It also has the potential to significantly prolong the process, something that the aged care sector can best do without. So it is for those cogent and compelling reasons that the government will not be supporting the amendments.