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Monday, 7 May 1984
Page: 1695

(Question No. 503)

Senator Kilgariff asked the Minister representing the Treasurer, upon notice, on 10 November 1983:

(1) Has the Treasurer given instructions that the Northern Territory be included in the review of State relativities being undertaken in the lead up to the termination of the State tax sharing arrangements in June 1985.

(2) Does the Treasurer realise that a change in the funding arrangements will cost the Northern Territory millions of dollars and will put a brake on the rapid growth that has occurred in the Territory since self government.

(3) Will the Treasurer move to ensure no change is made to the funding arrangements, as set out in the memorandum of understanding for the Northern Territory.

Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question:

(1) Terms of reference for a review of the distribution of tax sharing grants were transmitted to the Commonwealth Grants Commission in a letter of 10 February 1984 from the Special Minister of State. To facilitate consideration of the tax sharing arrangements which should apply after 1984-85, the Commission has been asked to make its assessments and to report on alternative bases in certain areas. One example of this is the request to the Commission to report on both a distribution of tax sharing grants among the States only and on a distribution of the grants among the States and the Northern Territory with the latter being treated on the same basis as the States.

(2) The Commission has been asked to base its assessments on the application of the principle that the respective tax sharing grants to which the States, and the Territory, are entitled should enable them to provide, without having to impose taxes and charges at levels appreciably different from the levels imposed in the other States, and the Territory's government services at standards not appreciably different from the standards provided by the other States and the Territory. That principle is basically the same as that set out in the Memorandum of Understanding for application by the Grants Commission in assessing the special grants which have been paid to the Territory in recent years.

(3) The Memorandum of Understanding states that 'The arrangements may have to be changed from time to time in the light of changing arrangements between the Commonwealth and the States'. Any decision on the funding arrangements for the Northern Territory to apply after 1984-85 will only be taken closer to the time for implementation of the tax sharing arrangements to apply after 1984-85 and after discussion with all the parties involved.