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Friday, 30 October 1970

Mr Garrick (BATMAN, VICTORIA) asked the Treasurer, upon notice:

(1)   Is it a fact that the only source of revenue of local government authorities is by way of rates and charges on property.

(2)   Are the rates and charges levied on ratepayers necessarily increased because the costs of local government authorities are increased through the payment of payroll tax.

(3)   Is the payroll tax thus an extra charge on ratepayers.

(4)   If so. will he consider taking steps to exempt local government authorities from the payment of payroll tax.

Mr Bury - The answer to the honourable member's question is as follows:

(1)   No. As is shown, for example, in Table 68 of the Commonwealth Statistician's bulletin 'State, Territory and Local Government Authorities Finance and Government Securities', local government authorities receive significant amounts of revenue from sources other than property rates, including licence fees, fines, charges for services and facilities provided by them, grants from State governments and business undertakings profits. Rates on property are, however, the largest source of revenue of local authorities, representing over one-half of their total revenue.

(2)   and (3) It is not possible to assess the effect on local authority rates and charges of the payment by such authorities of payroll tax. If, for example, local authorities were to be exempted from payroll tax this could lead to:

(a)   a reduction in rates and/or charges; or

(b)   an increase in local authority expenditure; or

(c)   a reduction in financial assistance provided to local authorities by State Governments; or

(d)   some combination of (a), (b) and (c).

(4)   It is not the practice to reply to questions involving policy issues. I point out, however, that the Commonwealth Government has indicated that the payment of financial assistance grants to State governments on the basis proposed at the June 1970 Premiers' Conference is on the understanding that those Governments and their authorities continue to meet payroll tax on wages and salaries of their employees.

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