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Thursday, 27 June 1996
Page: 2368

Senator SHORT (Assistant Treasurer)(12.50 p.m.) —The effect of the amendment is to, as Senator Cook says, set a formula. In future years of income the provisional tax uplift factor will be a percentage determined by reference to the nominal increase in GDP—a figure published by the Commonwealth statistician—for the 12 months ending 31 December immediately before the relevant year of income.

It will still be open to the parliament to legislate a separate rate in respect of a particular year, but the default rate each year will be based on the nominal GDP in the preceding full calendar year. For example, if it was June 1997—that is, we were 12 months down the track—and we were looking at 1997-98, the default rate for that year would be whatever the figure is for the nominal GDP in the full calendar year 1996. It means you are in fact lagging one quarter behind the latest available GDP, depending on when the uplift factor was set. If it were set at, say, this time of the year for the following year, you would not have taken account of the March quarter GDP figure. The government believed it was more appropriate to have a full calendar year figure, which is a more commonly understood concept.