A hearing which took place earlier today saw Ruth Forrest, Murchison Independent MLC and committee chairwoman, question some Department of Treasury and Finance representatives about the expected impact which revenue raised from new gambling licences would have on the Goods and Services Tax (GST) in Tasmania.
An inquiry into the impact which the Commonwealth GST distribution system has on the expenses and service delivery in Tasmania is being held by a Legislative Council select committee. At the hearing which took place on August 12th, the committee has heard that the revenue, which is expected to be raised as the result of some changes brought to the Australian state’s gambling licence policy, would not have an impact on the Goods and Services Tax outcome of Tasmania.
During the hearing, Damien Febey, who is an assistant director at an intergovernmental and financial policy branch, explained that the GST outcome of the Australian state would not be affected in case that Tasmanian authorities bring some changes to local gambling tax rates. Mr Febey reminded that a possible increase brought to the gambling taxes do not change the state’s GST outcome because it is equally treated.
He further questioned the practice whereby some significant funds have been excluded from state consultation.
Select Committee Appointed to Assess the Possible Impact on GST Distributions
Earlier this year, it became clear that a select committee of the Legislative Council would investigate on the possible impact which GST distributions could have to Tasmania. This also included the tax generated by gambling activities.
As it was announced earlier in 2019, the committee is focused on how the payments would apply to the expenses and service delivery in the state of Tasmania by comparing the components’ actual and assessed expenses per capita compared to the national average.
At the hearing today, the economic and financial policy deputy secretary Fiona Calvert explained that matters associated with GST distribution and gambling taxes are being effectively discussed with the federal treasurer. Ms Calvert also added that it is the Treasury’s preference not to quarantine payments – a preference that would lead to a situation where all Australian states are pushing for their payments to be suspended.
The Legislative Council select committee questioned how the impact of large Commonwealth contributions was evaluated. Ms Calvert explained that there are some processes which effectively require from all agencies to take into account the impact which the Goods and Services Tax would have on any payment made within the Commonwealth. According to her, it might help to prevent deals being done for funding which could have a negative impact on the system.
For the time being, the state of Tasmania receives 3.7% of the GST pool of the nation.