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Labor lies on local government and tax reform.

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Media Release



Minister for Regional Development, Territories and Local Government





Labor’s spokesperson on local government issues, Belinda Neal (a candidate for the NSW electoral divis ion of Robertson), is just plain wrong in her description of the way in which the Coalition’s Tax Plan affects local government.


Ms Neal got just about everything wrong when talking yesterday on the Gareth McCray Show on radio station 2KY.


She was wrong to say that ‘a lot of services, including garbage services, will be subject to the GST’.


She was wrong to say that ‘people will be paying more for local government services as a result of the GST.’


She was wrong to say that’ local government will receive no direct funding whatsoever.’


And she was wrong to say that ‘there would be no guarantees’ for continuing local government funding


The facts are that the Coalition has recognized the special role played by local government in our community by treating them in much the same way as the health and education sectors and benevolent institutions with regard to the GST.


Most council charges will In fact be GST-free.


* Council rates will be GST-free;


* Council water and sewerage charges will be GST-free;


* Compulsory rubbish collection charges will be GST free;


* Regulatory charges (such as planning fees and dog licences) will be GST-free; and


* Council fines and penalties will be GST-free.


This means that these activities will not be taxed. Ratepayers consuming these services will not have to pay the GST.


Ms Neal has also completely misrepresented the new financial assistance arrangements that are in the Coalition’s Tax Plan.


The Coalition will guarantee that the States meet their financial responsibilities in relation to local government. It will be an unshakeable condition of payment of GST revenues to the States that all conditions attached to the payment of local government funding will be maintained.


* General purpose, untied financial assistance g rants to local government will continue:


* The untied local roads component of the general purpose grants will continue; and


* Annual escalation factors, based on adjustments for inflation and population growth, will continue.


Ms Neal has also ignored t he fact that other elements of the Coalition’s Tax Plan will result in substantial reductions in council running costs. It will be cheaper for councils to do business because:


* embedded wholesale sales tax will be abolished (which will save councils arou nd $70 million per year);


* councils will be able to claim a full refund of all of the GST paid by councils on their business inputs that is, on the goods and services they buy to provide services to their communities; and


* councils will be able to take advantage of the new tax and excise arrangements on fuel (which will reduce the excise payable on diesel front 43 cents per litre to 18 cents per litre for on-road heavy vehicles, and from 43 cents per litre to zero for off-road vehicles).


Some councils have calculated that these measures will save them in the order of $600 000 per year. Savings of this magnitude will mean that councils can reduce debt, improve services and reduce rates and charges.


Local government is a winner from tax reform and Ms Neal’s shabby attempts to claim otherwise do her no credit.


Labor offers no credible alternatives for local government and it is not surprising that the Local Government Association has described Labor’s tax proposals as ‘uninspiring and disappointing.




9 September 1998


Contact: Graeme Hallett 0419 218 469