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This is a Bill, not an Act. For current law, see the Acts databases.
Western Australia
Financial Relations Agreement (Consequential
Provisions) Bill 1999
CONTENTS
Part 1 -- Preliminary
1. Short title 2
2. Commencement 2
3. Objectives 2
Part 2 -- Financial Institutions Duty
Act 1983
4. The Act amended 3
5. Section 12A inserted 3
6. Section 12B inserted 3
7. Section 21A inserted 4
8. Section 69A inserted 5
Part 3 -- Fuel Suppliers Licensing Act 1997
9. The Act amended 6
10. Section 23 amended 6
11. Section 29 amended 6
12. Section 48 amended 6
13. Section 66 replaced 7
14. Section 69 repealed 8
Part 4 -- Pay-roll Tax Assessment Act 1971
15. Section 3D inserted 9
Part 5 -- Stamp Act 1921
Division 1 -- Preliminary
16. The Act amended 10
page i
46--1
Financial Relations Agreement (Consequential Provisions) Bill 1999
Contents
Division 2 -- Marketable securities and rights in
respect of shares
17. Section 4 amended 10
18. Section 20 amended 11
19. Section 39 amended 11
20. Section 73E amended 11
21. Section 75D amended 12
22. Section 75JA amended 12
23. Section 76AI amended 12
24. Section 76AP amended 12
25. Section 112B amended 13
26. Section 112BA amended 13
27. Section 112C amended 13
28. Section 112FS amended 14
29. Section 112HA amended 15
30. Second Schedule amended and consequential
amendments 15
31. Provisions repealed 16
32. Savings 16
Division 3 -- Other amendments
33. Section 4A inserted 18
34. Section 112I amended 19
35. Section 112K amended 20
Part 6 -- Tobacco Sellers Licensing Act 1975
36. Tobacco Sellers Licensing Act 1975 repealed 21
37. Saving of secrecy provisions 21
Part 7 -- Related amendments
38. Marketable Securities Transfer Act 1970 amended 22
39. Taxation (Reciprocal Powers) Act 1989 amended 22
Schedule 1 -- Intergovernmental Agreement
on the Reform of Commonwealth-State
Financial Relations
page ii
Western Australia
LEGISLATIVE ASSEMBLY
Financial Relations Agreement (Consequential
Provisions) Bill 1999
A Bill for
An Act to implement certain measures described in the
Intergovernmental Agreement on the Reform of Commonwealth-State
Financial Relations and for that purpose to --
• amend the Financial Institutions Duty Act 1983;
• amend the Fuel Suppliers Licensing Act 1997;
• amend the Marketable Securities Transfer Act 1970;
• amend the Pay-roll Tax Assessment Act 1971;
• amend the Stamp Act 1921;
• amend the Taxation (Reciprocal Powers) Act 1989; and
• repeal the Tobacco Sellers Licensing Act 1975,
and for related purposes.
The Parliament of Western Australia enacts as follows:
page 1
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 1 Preliminary
s. 1
Part 1 -- Preliminary
1. Short title
This Act may be cited as the Financial Relations Agreement
(Consequential Provisions) Act 1999.
5 2. Commencement
(1) This Act, other than the provisions described in subsections (2)
and (3), comes into operation on the day on which it receives
the Royal Assent.
(2) Part 5 Division 2 and section 38 come into operation on
10 1 July 2001.
(3) Part 6 and section 39 come into operation on 1 July 2000.
3. Objectives
The main objectives of this Act are --
(a) to record the intention of this State to comply with, and
15 give effect to, the Intergovernmental Agreement on the
Reform of Commonwealth-State Financial Relations, a
copy of which is set out in Schedule 1; and
(b) to implement, in part, measures described in that
agreement.
page 2
Financial Relations Agreement (Consequential Provisions) Bill 1999
Financial Institutions Duty Act 1983 Part 2
s. 4
Part 2 -- Financial Institutions Duty Act 1983
4. The Act amended
The amendments in this Part are to the Financial Institutions
Duty Act 1983*.
5 [* Reprinted as at 19 November 1992.
For subsequent amendments see 1998 Index to Legislation of
Western Australia, Table 1, p. 92, and Act No. 26 of 1999.]
5. Section 12A inserted
After section 12 the following section is inserted --
10 "
12A. Liability to duty discontinued
(1) Liability to pay financial institutions duty in respect of
a receipt of money does not arise under section 10 if
the money is received after 30 June 2001.
15 (2) Liability to pay financial institutions duty in respect of
an amount worked out by reference to the sum of
certain short term liabilities or short term investments
at the close of certain days does not arise under
section 11 if those days are after 30 June 2001.
20 (3) Liability to pay financial institutions duty in respect of
a deposit of money does not arise under section 12 if
the money is deposited after 30 June 2001.
".
6. Section 12B inserted
25 Before section 13 the following section is inserted in Part IV --
"
12B. This Part ceases to apply
(1) This Part, other than sections 18, 19 and 21, does not
apply after 30 June 2001.
page 3
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 2 Financial Institutions Duty Act 1983
s. 7
(2) After 30 June 2001, section 21(1) applies only in
relation to a financial year that ended on or before that
day.
".
5 7. Section 21A inserted
Before section 22 the following section is inserted in Part V --
"
21A. Application of this Part limited
(1) An application for registration as a financial institution
10 is not required by section 22(1) or (2) to be made after
30 June 2001 and cannot be made under section 22(3)
after that day.
(2) Section 23 does not require a return to be furnished
relating to a month ending after 30 June 2001.
15 (3) Section 24(1) does not require a return to be furnished
relating to a financial year commencing after
30 June 2001, and a financial year commencing after
30 June 2000 in relation to which it requires a return to
be furnished is to be taken to end on 30 June 2001.
20 (4) An application for certification as a certified short
term dealer cannot be made under section 26 after
30 June 2001.
(5) Section 27 does not require a return to be furnished
relating to a month or other period commencing after
25 30 June 2001, and any period relating to which it
requires a return to be furnished that commences
before 30 June 2001 and would not end until after that
day is to be taken to end on 30 June 2001.
(6) An application for registration as a depositor is not
30 required by section 29(1) to be made after
30 June 2001.
page 4
Financial Relations Agreement (Consequential Provisions) Bill 1999
Financial Institutions Duty Act 1983 Part 2
s. 8
(7) Section 30 does not require a return to be furnished
relating to a month ending after 30 June 2001.
(8) Section 31(1) does not require a return to be furnished
relating to a financial year commencing after
5 30 June 2001, and a financial year commencing after
30 June 2000 in relation to which it requires a return to
be furnished is to be taken to end on 30 June 2001.
(9) Sections 25, 28, and 32 apply only in relation to a
period for which a return was required.
10 ".
8. Section 69A inserted
After section 69 the following section is inserted --
"
69A. Exemption under regulations
15 The regulations may provide that, subject to any
condition that the regulations may impose, an
obligation imposed by section 48, 49, or 69 does not
apply.
".
page 5
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 3 Fuel Suppliers Licensing Act 1997
s. 9
Part 3 -- Fuel Suppliers Licensing Act 1997
9. The Act amended
The amendments in this Part are to the Fuel Suppliers Licensing
Act 1997*.
5 [* Act No. 55 of 1997.
For subsequent amendments see 1998 Index to Legislation of
Western Australia, Table 1, p. 101.]
10. Section 23 amended
After section 23(1) the following subsection is inserted --
10 "
(1a) This section and section 24 apply even though a person
ceases to be an authorized distributor after purporting
to make a request under section 20(2).
".
15 11. Section 29 amended
After section 29(2) the following subsection is inserted --
"
(3) Paragraphs (a) and (c) of subsection (1) apply even
though a person ceases to hold an ORD user's
20 certificate.
".
12. Section 48 amended
After section 48(1) the following subsection is inserted --
"
25 (1a) This section and section 49 apply even though a person
ceases to be a licensed supplier after applying for a
diesel subsidy as described in subsection (1).
".
page 6
Financial Relations Agreement (Consequential Provisions) Bill 1999
Fuel Suppliers Licensing Act 1997 Part 3
s. 13
13. Section 66 replaced
Section 66 is repealed and the following section is inserted
instead --
"
5 66. Subsidies to cease for diesel supplied on or after
1 July 2000
(1) This section applies despite the other sections of this
Act.
(2) On and after 1 July 2000 --
10 (a) diesel is no longer required to be supplied
under this Act at the general subsidized price;
(b) diesel is no longer required to be supplied
under this Act at the ORD subsidized price; and
(c) neither a general diesel subsidy nor an ORD
15 subsidy is to be paid under this Act in respect
of diesel supplied or used by a licensed supplier
on or after 1 July 2000.
(3) On 1 July 2000 --
(a) this Act ceases to apply to or in respect of
20 diesel supplied on or after 1 July 2000;
(b) this Act ceases to apply to or in respect of
diesel used by a licensed supplier on or after
1 July 2000; and
(c) sections 6(1), (2) and (3), 38(1) and 39(1) cease
25 to operate.
(4) On and after 1 July 2000 sections 29(1)(a) and (c), 31,
32 and 33 apply in respect of diesel supplied before
then at the ORD subsidized price to a certified user that
is not a licensed supplier.
page 7
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 3 Fuel Suppliers Licensing Act 1997
s. 14
(5) Sections 12(3), 21(3) and 29(1)(a) cease to operate on a
day prescribed by the regulations that is after
1 July 2000.
".
5 14. Section 69 repealed
Section 69 is repealed.
page 8
Financial Relations Agreement (Consequential Provisions) Bill 1999
Pay-roll Tax Assessment Act 1971 Part 4
s. 15
Part 4 -- Pay-roll Tax Assessment Act 1971
15. Section 3D inserted
After section 3C of the Pay-roll Tax Assessment Act 1971* the
following section is inserted --
5 "
3D. GST excluded from wages
(1) For the purposes of this Act the amount or value of
wages paid or payable to a person shall be reduced by
the relevant proportion of the amount of GST, if any,
10 payable by that person on the supply to which the
wages relate.
(2) In this section --
"consideration" has the same meaning as it has in the
Commonwealth A New Tax System (Goods and
15 Services Tax) Act 1999;
"GST" has the same meaning as it has in the
Commonwealth A New Tax System (Goods and
Services Tax) Act 1999 except that it includes
notional GST of the kind for which payments may
20 be made under the State Entities (Payments)
Act 1999 by a person that is a State entity as
defined in that Act;
"relevant proportion", in relation to GST payable on
a supply to which wages relate, means the
25 proportion that the amount or value of the wages
bears to the consideration for the supply to which
the wages relate.
".
[* Reprinted as at 12 November 1996.
30 For subsequent amendments see 1998 Index to Legislation of
Western Australia, Table 1, p. 185.]
page 9
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 5 Stamp Act 1921
Division 1 Preliminary
s. 16
Part 5 -- Stamp Act 1921
Division 1 -- Preliminary
16. The Act amended
The amendments in this Part are to the Stamp Act 1921*.
5 [* Reprinted as at 23 January 1996.
For subsequent amendments see 1998 Index to Legislation of
Western Australia, Table 1, p. 237, and Acts Nos. 2, 24, 25,
and 26 of 1999.]
Division 2 -- Marketable securities and rights in
10 respect of shares
17. Section 4 amended
(1) Section 4(1) is amended by inserting in the appropriate
alphabetical positions the following definitions --
"
15 "overseas transfer" means the transfer of a share of a
WA company, or a right in respect of shares of a
WA company, where --
(a) the share or right is quoted on a stock
exchange situated outside Australia that is
20 not a recognized stock exchange;
(b) the share or right is registered on a branch
register of the WA company outside
Australia; and
(c) duty has not been paid in respect of the
25 transfer;
"recognized stock exchange" means a stock exchange
prescribed as a recognized stock exchange for the
purposes of this Act;
".
page 10
Financial Relations Agreement (Consequential Provisions) Bill 1999
Stamp Act 1921 Part 5
Marketable securities and rights in respect of shares Division 2
s. 18
(2) Section 4(1) is amended in the definition of "marketable security",
in paragraph (c)(i), by deleting "listed" and inserting instead --
" quoted ".
(3) Section 4(1) is amended by deleting the definition of "right in
5 respect of shares" and inserting instead --
"
"right in respect of shares" means a security,
however described, that is or represents a right,
whether actual, prospective or contingent, to be
10 allotted or issued with an unissued marketable
security, whether or not any money or other
consideration is to be payable for the issue;
".
18. Section 20 amended
15 Section 20(5a) is amended by deleting "112F(2),".
19. Section 39 amended
Section 39(2) is amended as follows:
(a) by deleting ", section 31A(3) and section 112F(3) and
(5)" and inserting instead --
20 " and section 31A(3) ";
(b) by deleting ", section 31A(3) and section 112F(6)" and
inserting instead --
" and section 31A(3) ".
20. Section 73E amended
25 Section 73E(1) is amended by deleting the definitions of "share"
and "stock exchange" and inserting instead --
"
"share" means a share or stock of a company that is
not listed on a recognized stock exchange and
30 includes an interest in a share.
".
page 11
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 5 Stamp Act 1921
Division 2 Marketable securities and rights in respect of shares
s. 21
21. Section 75D amended
Section 75D(1) is amended in the definition of "farming
company" as follows:
(a) in paragraph (a) by deleting "listed" and inserting
5 instead --
" quoted ";
(b) in paragraph (b)(ii)(I) by deleting "listed" and inserting
instead --
" quoted ".
10 22. Section 75JA amended
Section 75JA(1a)(c) is amended by deleting "stock exchange
that is prescribed for the purposes of this paragraph" and
inserting instead --
" recognized stock exchange ".
15 23. Section 76AI amended
Section 76AI(1)(a) is deleted and the following paragraph is
inserted instead --
"
(a) the WA company is not listed on a recognized
20 stock exchange;
".
24. Section 76AP amended
Section 76AP(1)(b) is deleted and the following paragraph is
inserted instead --
25 "
(b) the corporation is not listed on a recognized
stock exchange;
".
page 12
Financial Relations Agreement (Consequential Provisions) Bill 1999
Stamp Act 1921 Part 5
Marketable securities and rights in respect of shares Division 2
s. 25
25. Section 112B amended
After section 112B(4) the following subsection is inserted --
"
(5) In subsection (1)(d) --
5 "relevant company" means --
(a) a WA company; or
(b) a foreign company with a registered office
under the Corporations Law that is situated
in this State.
10 ".
26. Section 112BA amended
(1) Section 112BA(1)(a) is amended by deleting "listed" and
inserting instead --
" quoted ".
15 (2) Section 112BA(3) is amended by deleting "listed on a
prescribed stock exchange (as defined in section 112A(1))" and
inserting instead --
" quoted on a recognized stock exchange ".
27. Section 112C amended
20 (1) Section 112C(1) is repealed and the following subsections are
inserted instead --
"
(1) A transfer of a marketable security or right in respect
of shares to which this subsection applies shall not be
25 registered, recorded or entered in the books of a
corporation to whose security or right the transfer
relates unless --
(a) a proper instrument of transfer has been
delivered to that corporation and, in the case of
page 13
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 5 Stamp Act 1921
Division 2 Marketable securities and rights in respect of shares
s. 28
a transfer by way of sale, the consideration for
the transfer is expressed in the instrument in
terms of money and the actual date of the sale
and the date of the execution by the transferor,
5 or the transferor and the transferee where both
are required to execute the instrument, are set
out in the instrument; and
(b) if the instrument is chargeable with duty under
this Act, the instrument is duly stamped.
10 (1a) Subsection (1) applies to any transfer of a marketable
security or right in respect of shares to give effect to
the sale or purchase or other disposition of that security
or right other than --
(a) an overseas transfer; or
15 (b) a transfer of a marketable security or right in
respect of shares that is quoted on a recognized
stock exchange.
".
(2) Section 112C(2) is amended by deleting "(other than an
20 SCH-regulated transfer)".
28. Section 112FS amended
After section 112FS(6) the following subsections are inserted --
"
(7) Regulations may provide that, subject to any condition
25 that the regulations may impose, an obligation imposed
by subsection (1) does not apply.
(8) In subsection (2)(d) --
"transfer value" means --
(a) in the case of a transfer on sale -- the
30 amount or value of total consideration for the
sale or the unencumbered value of the
page 14
Financial Relations Agreement (Consequential Provisions) Bill 1999
Stamp Act 1921 Part 5
Marketable securities and rights in respect of shares Division 2
s. 29
marketable security or right in respect of
shares transferred at the date of the sale,
whichever is the greater; or
(b) in any other case -- the unencumbered value
5 of the marketable security or right at the date
of the transfer.
".
29. Section 112HA amended
Section 112HA(7) is amended by deleting "(f) or (fa)".
10 30. Second Schedule amended and consequential amendments
(1) The Second Schedule item 4A(1) is amended as follows:
(a) under the heading "Nature of instrument", by deleting
"shares -- " and all of the subitem after it to
immediately before paragraph (f) and inserting
15 instead --
"
shares if the marketable security or
right in respect of shares is, or
under section 112B is to be treated
20 as if it is, situated in this State --
";
(b) by deleting paragraphs (f) and (g) and the duty specified
opposite each of those paragraphs;
(c) in paragraph (fa) by deleting "is not listed on a
25 prescribed stock exchange (as defined in
section 112A(1)), unless paragraph (g) applies" and
inserting instead --
"
is not quoted on a recognized
30 stock exchange.
".
(2) The Second Schedule item 4A(2), (3) and (4) are repealed.
page 15
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 5 Stamp Act 1921
Division 2 Marketable securities and rights in respect of shares
s. 31
(3) The Second Schedule item 6 is amended by deleting "and not
being a settlement, deed of gift or an exchange" and inserting
instead --
"
5 and not being --
(a) a settlement;
(b) a deed of gift;
(c) an exchange; or
(d) a conveyance or transfer of
10 a marketable security, or
right in respect of shares,
that is quoted on a
recognized stock exchange
".
15 31. Provisions repealed
The provisions set out in the Table to this section are repealed.
Table
section 9(1c) section 112F
section 31B(5a) Part IVA Division 3
section 112A Part IVA Division 4
section 112B(2) Part IVA Division 5
section 112D Part IVAB
section 112E Third Schedule item 2(2), 2(3), 2(4),
section 112EA 2(10), 2(12), 2(13), 2(14), 2(16),
2(16a) and 2(17)
32. Savings
(1) Subject to subsection (2), the former provisions continue to apply
20 as if this Division were not enacted, to and in relation to --
(a) information referred to in section 9(1c) of those
provisions that was acquired on or before 30 June 2001
or during the continued application under this section of
Part IVA Division 4 of those provisions;
page 16
Financial Relations Agreement (Consequential Provisions) Bill 1999
Stamp Act 1921 Part 5
Marketable securities and rights in respect of shares Division 2
s. 32
(b) instruments referred to in section 112D of those
provisions that were executed on or before 30 June 2001
and the subsequent SCH-regulated transfers;
(c) transfers referred to in section 112E or 112F of those
5 provisions that were made on or before 30 June 2001;
(d) sales and purchases referred to in Part IVA Division 3 of
those provisions that were made or deemed to have been
made on or before 30 June 2001;
(e) SCH-regulated transfers to which Part IVA Division 4
10 of those provisions applies that were made on or before
30 June 2001;
(f) matters referred to in Part IVA Division 5 of those
provisions, until all instruments required to be endorsed
under section 112D of those provisions have been so
15 endorsed;
(g) relevant transactions referred to in Part IVAB of those
provisions that were made or effected, or deemed to
have been made or effected, on or before 30 June 2001;
(h) the matters referred to in the Second Schedule item 4A
20 of those provisions where the conveyances or transfers
were made on or before 30 June 2001; and
(i) exemptions in the Third Schedule of those provisions
where the conveyances, transfers, sales or purchases
were made on or before 30 June 2001.
25 (2) Regulations may be made under section 120 of the Stamp
Act 1921 that, subject to any condition that the regulations may
impose, terminate an obligation that, because of subsection (1),
would otherwise continue under --
(a) section 112E(6) and (7) of the former provisions, in
30 relation to a record referred to in section 112E(5) of the
former provisions;
page 17
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 5 Stamp Act 1921
Division 3 Other amendments
s. 33
(b) section 112F(11) and (12) of the former provisions, in
relation to a record referred to in section 112F(10) of the
former provisions;
(c) section 112FI(5) and (6) of the former provisions, in
5 relation to a record referred to in section 112FI(3) of the
former provisions;
(d) section 112FJ(3) and (4) of the former provisions, in
relation to a copy of an instrument endorsed under
section 112FJ(2) of the former provisions;
10 (e) section 112FQ of the former provisions, in relation to
the particulars and records referred to in that section; or
(f) section 112GF of the former provisions, in relation to
books and records referred to in that section.
(3) In this section --
15 "former provisions" means the Stamp Act 1921 as in force
immediately before the coming into operation of this
Division.
Division 3 -- Other amendments
33. Section 4A inserted
20 After section 4, the following section is inserted --
"
4A. Treatment of amounts payable for GST
(1) In ascertaining, for the purposes of this Act, the value
of anything or the consideration for anything, there is
25 to be no discount for the amount of GST (if any)
payable on the supply of that thing.
(2) A reference in Part IIIC to purchase price means the
purchase price without any discount for the amount of
GST (if any) payable on the supply of the vehicle.
page 18
Financial Relations Agreement (Consequential Provisions) Bill 1999
Stamp Act 1921 Part 5
Other amendments Division 3
s. 34
(3) If a lessee is obliged to pay for GST on a leasing an
amount that is not included in the rent, a reference in
Part IIID or in the Second Schedule item 12 to the rent
under the lease refers to the sum of the rent and the
5 amount that the lessee is obliged to pay for GST.
(4) In this section --
"GST" has the same meaning as it has in the
Commonwealth A New Tax System (Goods and
Services Tax) Act 1999 except that it includes
10 notional GST of the kind for which payments may
be made under the State Entities (Payments)
Act 1999 by a person that is a State entity as
defined in that Act;
"lease" includes an agreement for a lease;
15 "leasing" means the supply to which the rent under a
lease relates;
"supply" has the same meaning as it has in the
Commonwealth A New Tax System (Goods and
Services Tax) Act 1999.
20 ".
34. Section 112I amended
(1) In section 112I(1), before the definition of "goods", the
following definition is inserted --
"
25 "customer" means a person to whom rights to use
goods are granted, being rights the granting of
which involves the carrying on of rental business;
".
page 19
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 5 Stamp Act 1921
Division 3 Other amendments
s. 35
(2) After section 112I(1) the following subsections are inserted --
"
(1a) For the purposes of this Part, the total amount received
in respect of rental business includes --
5 (a) any amount received from a customer as or on
account of duty under this Act; and
(b) any amount received from a customer that is for
GST.
(1b) In subsection (1a) --
10 "GST" has the same meaning as it has in the
Commonwealth A New Tax System (Goods and
Services Tax) Act 1999 except that it includes
notional GST of the kind for which payments may
be made under the State Entities (Payments)
15 Act 1999 by a person that is a State entity as
defined in that Act.
".
35. Section 112K amended
Section 112K(1b) is repealed.
page 20
Financial Relations Agreement (Consequential Provisions) Bill 1999
Tobacco Sellers Licensing Act 1975 Part 6
s. 36
Part 6 -- Tobacco Sellers Licensing Act 1975
36. Tobacco Sellers Licensing Act 1975 repealed
The Tobacco Sellers Licensing Act 1975 is repealed.
37. Saving of secrecy provisions
5 Despite the repeal of the Tobacco Sellers Licensing Act 1975,
section 5 of that Act continues to apply in respect of any
information acquired by a person, or any matter or thing coming
under a person's notice, in the course of the person's
employment in the administration of the Act before it was
10 repealed.
page 21
Financial Relations Agreement (Consequential Provisions) Bill 1999
Part 7 Related amendments
s. 38
Part 7 -- Related amendments
38. Marketable Securities Transfer Act 1970 amended
(1) The definition of "broker" in section 3(1) of the Marketable
Securities Transfer Act 1970* is deleted and the following
5 definition is inserted instead --
"
"broker" means a person who is a dealer within the
meaning of the Corporations Law;
".
10 (2) The definition of "broker's agent" in section 8(4) of the
Marketable Securities Transfer Act 1970* is deleted and the
following definition is inserted instead --
"
"broker's agent" means a person who is a securities
15 representative within the meaning of the
Corporations Law;
".
[* Act No. 86 of 1970.]
39. Taxation (Reciprocal Powers) Act 1989 amended
20 Section 3(1) of the Taxation (Reciprocal Powers) Act 1989* is
amended in the definition of "State Taxation Act" as follows:
(a) by deleting the item relating to the Tobacco Sellers
Licensing Act 1975;
(b) by deleting the semicolon at the end of the item relating
25 to the Stamp Act 1921 and inserting instead a comma.
[* Act No. 18 of 1989.
For subsequent amendments see 1998 Index to Legislation of
Western Australia, Table 1, p. 248.]
page 22
Financial Relations Agreement (Consequential Provisions) Bill 1999
Intergovernmental Agreement on the Reform of Schedule 1
Commonwealth-State Financial Relations
Schedule 1 -- Intergovernmental Agreement on the
Reform of Commonwealth-State Financial Relations
[s. 3]
INTERGOVERNMENTAL AGREEMENT ON THE
5 REFORM OF COMMONWEALTH-STATE FINANCIAL
RELATIONS
THE COMMONWEALTH OF AUSTRALIA
THE STATE OF NEW SOUTH WALES
THE STATE OF VICTORIA
10 THE STATE OF QUEENSLAND
THE STATE OF WESTERN AUSTRALIA
THE STATE OF SOUTH AUSTRALIA
THE STATE OF TASMANIA
THE AUSTRALIAN CAPITAL TERRITORY, AND
15 THE NORTHERN TERRITORY OF AUSTRALIA
WHEREAS
(1) the Special Premiers' Conference on 13 November 1998 developed
principles for the reform of Commonwealth-State financial relations;
(2) the Commonwealth, States and Territories are in agreement that the
20 current financial relationship between levels of government must be
reformed to facilitate a stronger and more productive federal system for
the new millennium;
(3) while a majority of the States and Territories support the introduction of
the Goods and Services Tax (GST), the agreement of New South Wales,
page 23
Financial Relations Agreement (Consequential Provisions) Bill 1999
Schedule 1 Intergovernmental Agreement on the Reform of
Commonwealth-State Financial Relations
Queensland and Tasmania to the reform of Commonwealth-State
financial relations does not imply their in-principle endorsement of the
GST;
(4) an Agreement was reached between the Commonwealth and the States
5 and Territories on the reform of Commonwealth-State financial relations
on 9 April 1999;
(5) this revised Agreement was made necessary by the changes to the
Commonwealth Government's A New Tax System (ANTS) package
announced by the Prime Minister on 28 May 1999; and
10 (6) this revised Agreement supersedes the previous Agreement of
9 April 1999:
IT IS HEREBY AGREED:
PART 1 - PRELIMINARY
Commencement Clause
15 1. This Agreement will commence between the Commonwealth, the States
and the Territories on 1 July 1999 unless otherwise agreed by the Parties.
Objectives
2. The objectives of the reforms set down in this agreement include:
(i) the achievement of a new national tax system, including the
20 elimination of a number of existing inefficient taxes which are
impeding economic activity;
(ii) the provision to State and Territory Governments of revenue from
a more robust tax base that can be expected to grow over time; and
(iii) an improvement in the financial position of all State and Territory
25 Governments, once the transitional changes have been completed,
relative to that which would have existed had the current
arrangements continued.
3. All Parties to the Agreement acknowledge the need to pursue on-going
reform of Commonwealth-State financial relations.
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Acknowledgement of Agreement
4. The Commonwealth will attach the Agreement as a schedule to the
A New Tax System (Commonwealth-State Financial Arrangements)
Act 1999. The Commonwealth will use its best endeavours to ensure the
5 Act will require compliance with the Agreement. The States and
Territories will attach the Agreement as a schedule to relevant State and
Territory legislation. The States and Territories will use their best
endeavours to ensure their legislation will require compliance with the
Agreement.
10 PART 2 - COMMONWEALTH-STATE FINANCIAL REFORM
Reform Measures
5. The Parties will undertake all necessary steps to have appropriate
legislation enacted to give effect to the following reform measures.
(i) The Commonwealth will legislate to provide all of the revenue
15 from the GST to the States and Territories and will legislate to
maintain the rate and base of the GST in accordance with this
Agreement.
(ii) The Commonwealth will cease to apply the Wholesale Sales Tax
from 1 July 2000 and will not reintroduce it or a similar tax in the
20 future.
(iii) The temporary arrangements for the taxation of petrol, liquor and
tobacco under the safety net arrangements announced by the
Commonwealth on 6 August 1997 will cease on 1 July 2000.
(iv) The payment of Financial Assistance Grants will cease on
25 1 July 2000.
(v) The Commonwealth will continue to provide Specific Purpose
Payments (SPPs) to the States and Territories and has no intention
of cutting aggregate SPPs as part of the reform process set out in
this Agreement, consistent with the objective of the State and
30 Territory Governments being financially better off under the new
arrangements.
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(vi) The States and Territories will cease to apply the taxes referred to
in Appendix A from the dates outlined below and will not
reintroduce them or similar taxes in the future.
• Bed taxes, from 1 July 2000;
5 • Financial Institutions Duty, from 1 July 2001;
• Stamp duties on quoted marketable securities from
1 July 2001;
• Debits tax by 1 July 2005, subject to review by the
Ministerial Council;
10 (vii) The Ministerial Council will by 2005 review the need for retention
of stamp duty on non-residential conveyances; leases; mortgages,
debentures, bonds and other loan securities; credit arrangements,
installment purchase arrangements and rental arrangements; and on
cheques, bills of exchange, promissory notes; and unquoted
15 marketable securities.
(viii) The States and Territories will adjust their gambling tax
arrangements to take account of the impact of the GST on
gambling operators.
(ix) Following negotiations under the CSHA, the States and Territories
20 will ensure that increases in pensions and allowances specified in
the tax reform package will not flow through to increased public
housing rents where these rents are linked to the level of pensions.
(x) Nothing in this clause will prevent any Party from introducing
anti-avoidance measures that are reasonably necessary to protect its
25 remaining tax base or liabilities accrued prior to the date the tax
ceases to apply.
GST Legislation
6. All Parties agree to reconsider this Agreement should the Commonwealth
Parliament pass the GST legislation in a way that significantly affects this
30 Agreement.
Distribution of GST Revenue
7. The Commonwealth will make GST revenue grants to the States and
Territories equivalent to the revenue from the GST subject to the
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arrangements in this Agreement. GST revenue grants will be freely
available for use by the States and Territories for any purpose.
8. The Commonwealth will distribute GST revenue grants among the States
and Territories in accordance with horizontal fiscal equalisation (HFE)
5 principles subject to the transitional arrangements set out below and other
relevant provisions of this Agreement.
9. Details of the payment arrangements are contained in Appendix B to this
Agreement.
Transitional Arrangements
10 10. In each of the transitional years following the introduction of the GST,
the Commonwealth guarantees that the budgetary position of each
individual State and Territory will be no worse off than it would have
been had the reforms set out in this Agreement not been implemented.
11. The Commonwealth will extend the transitional period by Regulation (as
15 provided for in the A New Tax System (Commonwealth-State Financial
Arrangements) Act 1999) to give effect to the commitments in clause 10
in the event that transitional assistance is required by any State or
Territory after 30 June 2003.
12. To meet this guarantee, the Commonwealth will make transitional
20 assistance payments to each State and Territory, as necessary, over this
period. These payments will take the form of interest free loans and
grants in July 2000-01 and grants paid quarterly in subsequent years and
will be freely available for use by the States and Territories for any
purpose. Any payments or repayments made by way of loans or grants
25 under the Commonwealth's guarantee will be excluded from assessments
of per capita relativities recommended by the Commonwealth Grants
Commission (CGC).
13. The amounts of any additional assistance under the guarantee will be
determined in accordance with the processes set out in Appendix C to this
30 Agreement.
14. After the second year following the introduction of the GST, GST
revenue grants will be determined on the basis of HFE principles. That
is, after the first two years, any State or Territory which is receiving more
than would have been received under the current arrangements will retain
35 that excess.
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First Home Owners Scheme
15. To offset the impact of the introduction of a GST, the States and
Territories will assist first homebuyers through the funding and
administration of a new uniform First Home Owners Scheme.
5 16. This assistance will be provided to first home owners consistent with
Appendix D to this Agreement.
Application of the GST to Government
17. The Parties intend that the Commonwealth, States, Territories and local
government and their statutory corporations and authorities will operate
10 as if they were subject to the GST legislation. They will be entitled to
register, will pay GST or make voluntary or notional payments where
necessary and will be entitled to claim input tax credits in the same way
as non-Government organisations. All such payments will be included in
GST revenue.
15 18. The Commonwealth will legislate to require the States and the Northern
Territory to withhold from any local government authority being in
breach of Clause 17 a sum representing the amount of unpaid voluntary
or notional GST payments. Amounts withheld will form part of the GST
revenue pool. Detailed arrangements will be agreed by the Ministerial
20 Council on advice from Heads of Treasuries.
Government Taxes and Charges
19. The Commonwealth, States and Territories agree that the GST does not
apply to the payment of some taxes and compulsory charges.
20. The Parties will agree a list of taxes and compulsory charges that are
25 outside the scope of the GST. This list will be promulgated by a
determination by the Commonwealth Treasurer as set out in
Division 81-5 of the A New Tax System (Goods and Services Tax)
Act 1999 (the GST Act).
21. In agreeing the list, the Commonwealth, States and Territories will have
30 regard to the following principles:
(i) taxes that are in the nature of a compulsory impost for general
purposes and compulsory charges by the way of fines or penalties
should not be subject to GST as these will not relate to any specific
supply of goods or services;
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(ii) similarly, those regulatory charges that do not relate to particular
goods or services should be outside the scope of the GST; and
(iii) the inclusion of any other charge in the Commonwealth
Treasurer's determination notwithstanding that it may relate to the
5 supply of a particular good or service will require the unanimous
agreement of the Commonwealth, States and Territories.
22. The agreed list of taxes and other compulsory charges that are outside the
scope of the GST will be subject to on-going review and adjustment as
necessary in consultation with the Ministerial Council. The Parties will
10 notify any objections to changes to the list within a period to be specified
by the Ministerial Council.
Reciprocal Taxation
23. Reciprocal taxation will be progressed on a revenue neutral basis, through
the negotiation of a Reciprocal Taxation Agreement with the objectives
15 of:
(i) improving the transparency of tax arrangements between all levels
of government;
(ii) ensuring tax neutrality; and
(iii) replacing the Statement of Policy Intent (SOPI) for the taxation
20 treatment of Government Business Enterprises with tax
arrangements which are broader in scope.
24. It is the intention of the Parties to this Agreement that a National Tax
Equivalent Regime (NTER) for income tax will be operational for State
and Territory government business enterprises from 1 July 2000. It is
25 also intended that the reciprocal application of other Commonwealth,
State and Territory taxes will be subsequently implemented as soon as
practicable.
25. Local government organisations will be consulted with a view to making
the NTER for income tax operational for wholly owned local government
30 business enterprises from 1 July 2000 and including local government in
the Reciprocal Tax Agreement at a later date.
26. Where the application of full indirect reciprocal tax arrangements is
prevented by the Constitution, jurisdictions have agreed to work
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cooperatively to introduce voluntary payment arrangements in these
circumstances.
27. All governments have agreed that no further compensation payments will
be payable by any jurisdiction under the SOPI.
5 Monitoring of Prices
28. In accordance with the Trade Practices Act 1974, as amended, the
Australian Competition and Consumer Commission will formally
monitor prices and take action against businesses that take pricing
decisions in a manner inconsistent with tax reform.
10 29. In order to ensure that these measures apply to the whole economy, the
States and Territories will adopt the Schedule version of Part VB of the
Trade Practices Act 1974 (part XIAA of the New Tax System Price
Exploitation Code) to extend the measures in Part VB to cover those
areas outside the Commonwealth's constitutional power. All Parties will
15 work towards having any necessary legislation in place by 1 July 1999.
30. The monitoring and prohibition on unreasonable pricing decisions will
commence on 1 July 1999 and continue until 30 June 2002.
PART 3 - ADMINISTRATION OF THE GST
Management of the GST Rate
20 31. After the introduction of the GST, a proposal to vary the 10 per cent rate
of the GST will require:
(i) the unanimous support of the State and Territory Governments;
(ii) the endorsement by the Commonwealth Government of the day;
and
25 (iii) the passage of relevant legislation by both Houses of the
Commonwealth Parliament.
Management of the GST Base
32. Subject to clauses 34, 35 and 36 of this Agreement, after the introduction
of the GST, any proposal to vary the GST base will require:
30 (i) the unanimous support of the State and Territory Governments;
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(ii) the endorsement by the Commonwealth Government of the day;
and
(iii) the passage of relevant legislation by both Houses of the
Commonwealth Parliament.
5 33. All future changes to the GST base should be consistent with:
(i) the maintenance of the integrity of the tax base;
(ii) simplicity of administration; and
(iii) minimising compliance costs for taxpayers.
34. A proposal to vary the GST base by way of a Ministerial determination
10 under the GST Act and the GST Transition Act will require the
unanimous agreement of the Ministerial Council established under
clause 40. The Ministerial Council will develop practical arrangements
to ensure timely consideration of proposed Ministerial determinations.
35. During the first 12 months following the implementation of the GST, the
15 Commonwealth Government will retain the discretion to make changes
unilaterally to the GST base where such changes:
(i) are of an administrative nature (as defined in Appendix E to this
Agreement);
(ii) are necessary to facilitate the implementation of the new tax; and
20 (iii) have regard to the need to protect the revenue of the States and
Territories.
36. From July 2001, changes to the GST base of an administrative nature
(as defined in Appendix E) would require the majority support of the
Commonwealth, the States and the Territories.
25 Australian Taxation Office
37. The States and Territories will compensate the Commonwealth for the
agreed costs incurred by the Australian Taxation Office (ATO) in
administering the GST.
38. Accountability and performance arrangements will be established
30 between the ATO and the State and Territory Governments consistent
with Appendix F to this Agreement. These arrangements will include
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maximising compliance, cost efficiency, simplicity for taxpayers and
administrative transparency.
39. The ATO and State and Territory Governments will collaborate to
explore options for the States and Territories to benefit from the use of
5 the Australian Business Number system.
PART 4 - INSTITUTIONAL ARRANGEMENTS
Establishment of Ministerial Council
40. A Ministerial Council comprising the Commonwealth, the States and the
Territories will be established from 1 July 1999 to oversee the operation
10 of this Agreement.
41. The membership of the Ministerial Council will comprise the Treasurer
of the Commonwealth and the Treasurers of the States and Territories
(or designated representatives).
42. The functions of the Ministerial Council will include:
15 (i) the oversight of the operation of the GST;
(ii) the oversight and coordination of the implementation of this
Agreement;
(iii) the review of matters of operational significance raised through the
GST Administration Sub-Committee;
20 (iv) discussion of CGC recommendations regarding relativities prior to
the Commonwealth Treasurer making a determination;
(v) monitoring compliance with the conditions governing the provision
of assistance to first home owners set out in Appendix D to this
Agreement;
25 (vi) monitoring compliance with the Commonwealth's undertaking
with respect to SPPs;
(vii) considering reports of the GST Administration Sub-Committee on
the performance of the ATO in GST administration;
(viii) reviewing the operation of the Agreement over time and
30 considering any amendments which may be proposed as a
consequence of such review;
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(ix) making recommendations to the Commonwealth Treasurer on the
Guaranteed Minimum Amount applying to each State and Territory
under the Transitional Arrangements;
(x) approving changes to the GST base which require the support of a
5 majority of Commonwealth, State and Territory Governments;
(xi) considering on-going reform of Commonwealth-State financial
relations; and
(xii) considering other matters covered in this Agreement.
43. The Treasurer of the Commonwealth will convene the Ministerial
10 Council in consultation with the other members of the Council not less
than once each financial year. If the Commonwealth Treasurer receives a
request from a member of the Council, he will consult with the other
members concerning convening a meeting. The Treasurer of the
Commonwealth will be the chair of the Council. The Council may also
15 conduct its business by correspondence.
44. All questions arising in the Ministerial Council will be determined by
unanimous agreement unless otherwise specified in this Agreement.
45. While it is envisaged that the Ministerial Council will take decisions on
most business arising from the operation of this Agreement, major issues
20 will be referred by the Ministerial Council to Heads of Government for
consideration, including under the auspices of the Council of Australian
Governments.
46. The Ministerial Council will establish a GST Administration
Sub-Committee comprised of Commonwealth, State and Territory
25 officials to monitor the operation of the GST, make recommendations
regarding possible changes to the GST base and rate and to monitor the
ATO's performance in GST administration. The GST Administration
Sub-Committee will function in accordance with the arrangements set out
in Appendix E to this Agreement.
30 SIGNED for and on behalf of the Parties by:
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The Honourable John Winston Howard, )
Prime Minister of the Commonwealth of )
Australia, on the 20th day of June 1999 )
in the presence of: )
The Honourable Robert John Carr, )
Premier of the State of New South Wales, )
on the 24th day of June 1999 )
in the presence of: )
The Honourable Jeffrey Gibb Kennett, )
Premier of the State of Victoria, on the )
26th day of June 1999 in the presence of: )
)
The Honourable Peter Douglas Beattie, )
Premier of the State of Queensland, )
on the 25th day of June 1999 )
in the presence of: )
The Honourable Richard Fairfax Court, )
Premier of the State of Western Australia, )
on the 29th day of June 1999 )
in the presence of: )
The Honourable John Wayne Olsen, )
Premier of the State of South Australia, )
on the 25th day of June 1999 )
in the presence of: )
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The Honourable James Alexander Bacon, )
Premier of the State of Tasmania, on )
the 25th day of June 1999 in the presence of: )
)
Kate Carnell, )
Chief Minister of the Australian Capital )
Territory, on the 22nd day of June 1999 )
in the presence of: )
The Honourable Denis Gabriel Burke, )
Chief Minister of the Northern Territory )
of Australia, on the 22nd day of June 1999 )
in the presence of: )
APPENDICES
A: Taxes Subject to Reform
B: Payment of GST Revenues to the States and Territories
C: Transitional Arrangements
5 D: First Home Owners Scheme
E: GST Administration
F: GST Administration Performance Agreement - Guiding Principles
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APPENDIX A
TAXES SUBJECT TO REFORM
The taxes which will cease to apply in accordance with paragraph 5 of this
Agreement are set out below and in the relevant Commonwealth, State and
5 Territory statutes as at 13 November 1998.
A1. The following taxes will cease to apply from 1 July 2000:
(i) Wholesale Sales Tax
Sales tax levied on the value of the last wholesale sale of goods
sold or otherwise dealt with as imposed by the Commonwealth's
10 Sales Tax (Imposition) Acts.
(ii) Bed Taxes
Accommodation taxes levied on the cost of temporary residential
accommodation.
A2. The following State and Territory taxes will cease to apply from
15 1 July 2001:
(i) Financial Institutions Duty
Financial Institutions Duty levied on the value of receipts (credits)
at financial institutions and on the average daily liabilities and/or
investments of short term money market dealers.
20 (ii) Stamp Duty on Marketable Securities
Stamp duty levied on turnover (ie sale price times quantity traded)
on the transfer of marketable securities quoted on the ASX or
another recognised stock exchange.
This excludes transfers of marketable securities in private
25 companies and trusts, and in public companies and trusts where the
securities are not quoted on the ASX or another recognised stock
exchange.
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A3. The following State and Territory tax will cease to apply by 1 July 2005,
subject to review by the Ministerial Council:
(i) Debits Tax
Debits tax levied on the value of withdrawals (debits) from
5 accounts with financial institutions with cheque drawing facilities.
Debits duty levied on transactions, including credit card
transactions. This does not include stamp duty on electronic debits
(refer A4 (v) below).
A4. The Ministerial Council will by 2005 review the need for retention of
10 stamp duties on the following:
(i) Stamp Duty on Non-residential Conveyances
Stamp duty levied on the value of conveyances other than
residential property conveyances.
(ii) Stamp Duty on Non-quotable Marketable Securities
15 Stamp duty levied on transfers of marketable securities in private
companies and trusts, and in public companies and trusts where the
securities are not quoted on the ASX or another recognised stock
exchange.
(iii) Stamp Duty on Leases
20 Stamp duty levied on the rental payable under tenancy agreements.
(iv) Stamp Duty on Mortgages, Bonds, Debentures and Other Loan
Securities
Stamp duty levied on the value of a secured loan property.
(v) Stamp Duty on Credit Arrangements, Installment Purchase
25 Arrangements and Rental Arrangements
Stamp duty levied on the value of the loan under credit
arrangements.
Stamp duty levied on credit business in respect of loans made,
discount transactions and credit arrangements.
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Stamp duty levied on the price of goods purchased under
installment purchase arrangements.
Stamp duty levied on the rent paid in respect of the hire of goods,
including consumer and producer goods.
5 (vi) Stamp Duty on Cheques, Bills of Exchange and Promissory Notes
Stamp duty levied on cheques, bills of exchange, promissory notes,
or other types of payment orders, promises to pay or
acknowledgment of debts, including duty on electronic debits.
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APPENDIX B
PAYMENT OF GST REVENUES TO THE STATES AND
TERRITORIES
B1. Subject to the transitional arrangements and other relevant provisions in
5 this Agreement, the Commonwealth will distribute GST revenue grants
among the States and Territories in accordance with horizontal fiscal
equalisation (HFE) principles.
B2. The pool of funding to be distributed according to HFE principles in a
financial year will comprise GST revenue grants and health care grants as
10 defined under an Australian Health Care Agreement between the
Commonwealth and the States and Territories. A State or Territory's
share of the pool will be based on its population share, adjusted by a
relativity factor which embodies per capita financial needs based on
recommendations of the Commonwealth Grants Commission. The
15 relativity factor for a State or Territory will be determined by the
Commonwealth Treasurer after he has consulted with each State and
Territory.
B3. The total amount of GST revenue to be provided to the States and
Territories in a financial year will be defined as:
20 (i) the sum of GST collections, voluntary and notional payments
made by government bodies, and amounts withheld pursuant to
clause 18; reduced by
(ii) the amounts paid or applied under Division 35 of the GST Act and
under section 39 of the Taxation Administration Act 1953.
25 B4. The total amount of GST revenue in a financial year will be determined
by the Commissioner of Taxation in the following way:
(i) actual outcomes for the items listed in paragraph B3 for the period
1 July to 31 May; plus
(ii) estimated outcomes for the items listed in paragraph B3 for the
30 month of June; plus
(iii) an adjustment amount (which may be positive or negative) to
account for any difference between the estimated and actual
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outcome for the items listed in paragraph B3 for the month of June
in the previous year.
B5. GST revenue grants will be paid by the Commonwealth on the
twenty-seventh day of each month. Where the scheduled payment day is
5 a Saturday, Sunday or public holiday in Canberra, the payment will be
made on the next business day of the Reserve Bank of Australia in
Canberra.
B6. The States and Territories shall be informed of the quantum of each
monthly payment by close of business Canberra time on the twenty sixth
10 day of each month. Where the day is a Saturday, Sunday or public
holiday in Canberra, the States and Territories shall be informed of the
quantum of the payment on the last business day of the Reserve Bank of
Australia in Canberra prior to payment day.
B7. The distribution between the States and Territories of the payments of
15 GST revenue grants up to 15 June in each year will be based on:
(i) the Treasurer's determination of per capita relativities;
(ii) the latest available Australian Bureau of Statistics' projections, or
estimates, of State and Territory populations as at 31 December;
(iii) the latest available Department of Health and Aged Care estimates
20 of health care grants to be provided to a State or Territory; and
(iv) the latest available estimates of the guaranteed minimum amount
for each State and Territory to be calculated under Appendix C of
this Agreement.
The Commonwealth will inform the States and Territories of any changes
25 to the estimates as part of the advice to be provided to the States and
Territories under paragraph B6.
B8. The payments of GST revenue grants after 15 June in each year will take
into account the determinations of:
(i) per capita relativities and Guaranteed Minimum Amounts by the
30 Treasurer;
(ii) populations by the Statistician;
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(iii) health care grants by the Minister administering the National
Health Act 1953; and
(iv) GST revenues by the Commissioner of Taxation.
For this purpose, the final payment will be made no later than the
5 seventeenth day of June in each year. Where the seventeenth day of June
is a Saturday, Sunday or public holiday in Canberra, the payment will be
made on the next business day of the Reserve Bank of Australia in
Canberra.
B9. States shall be informed of the quantum of the final monthly payment of
10 GST revenues grants by close of business Canberra time on the sixteenth
day of June. Where the sixteenth day of June is a Saturday, Sunday or
public holiday in Canberra, the Commonwealth shall inform the States of
the quantum of the final payment on the last business day of the Reserve
Bank of Australia in Canberra prior to the thirteenth.
15 B10. The timing of payments of GST revenue grants may be varied by
agreement between the Parties to this Agreement.
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APPENDIX C
TRANSITIONAL ARRANGEMENTS
Guarantee in Legislation
C1. Commonwealth legislation will provide a State or Territory with an
5 entitlement to an additional amount of funding from the Commonwealth
to offset any shortfall between its entitlement to GST revenue grants and
the total amount of funding which would ensure that the budgetary
position of a State or Territory is not worse off during the transition
period.
10 (i) In 2000-01, transitional assistance will be provided to a State or
Territory as a grant or an interest free loan to be repaid to the
Commonwealth in full in 2001-02.
(ii) In subsequent transitional years, transitional assistance will be
provided to a State or Territory as a grant.
15 Guaranteed Minimum Amount
C2. The amount of a State or Territory's entitlement to transitional assistance
in a financial year will be calculated by subtracting its entitlement to GST
revenue grants from a "Guaranteed Minimum Amount" constructed in the
following way:
20 State revenues forgone: financial assistance grants, revenue replacement
payments and State and Territory taxes as defined in Appendix A of this
Agreement with the exception of stamp duties on marketable securities
which will be the amount as if fully abolished.
plus
25 Reduced revenues: the amount by which States and Territories adjust
gambling taxation arrangements to take account of the impact of the GST
on gambling operators.
plus
Interest costs on cash flow shortfalls: the interest cost incurred by States
30 and Territories as a result of the change to cash flows arising from the
replacement of weekly financial assistance grants, revenue replacements
and State and Territory taxes with monthly GST revenue grants.
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plus
Loan Repayments: in 2001-02 only, the repayment of a guarantee loan
by a State or Territory.
plus
5 Additional expenditures: payments to first home owners in accordance
with Appendix D of this Agreement and the amount of the agreed GST
administration costs payable to the ATO by a State or Territory.
plus
Other items: $338 million spread evenly over three years starting in
10 2000-01 in respect of the claim by States and Territories in relation to
revenue forgone from the abolition of the Wholesale Sales Tax (WST)
Tax Equivalent Regimes (with the distribution to be agreed among the
States and Territories).
minus
15 Reduced expenditures: off-road diesel subsidies and reduced costs from
the removal of embedded WST and excises on purchases by a State or
Territory government.
minus
Growth dividend: the increase in revenue to a State or Territory (not
20 including GST revenue payments) that is attributable to the impact of the
Commonwealth's taxation reform measures on economic growth.
plus
Adjustments: from 2001-02, the net difference between preliminary
estimates and outcomes or final estimates for items that were taken into
25 account in the previous year's Guaranteed Minimum Amount.
In addition, $269 million in total, spread evenly over three years, will be
included in the new Commonwealth State Housing Agreement starting in
2000-01 in respect of the net increased public housing costs as a result of tax
reform (with the distribution to be agreed among the States and Territories).
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Heads of Treasuries' Advice to Ministerial Council
C3. The Guaranteed Minimum Amount for a State or Territory will be
determined by the Commonwealth Treasurer by 10 June of each year of
the transition period. The Ministerial Council will make
5 recommendations to the Treasurer on the Guaranteed Minimum Amount
for each State and Territory.
C4. The Heads of Treasuries will provide written advice to the Ministerial
Council on the following issues by the indicated dates.
(i) By 1 March 2000, advice on the estimated loans and grants to be
10 provided to each State and Territory in 2000-01 and the amounts
which the Commonwealth should provide to each State and
Territory on Tuesday 4 July 2000.
(ii) By 1 November 2000 advice on the most recent estimates of
transitional assistance for the year and any adjustment that may
15 need to be made to the amount of the loans and grants made to
each State and Territory.
(iii) By 1 September of each subsequent year of the transition period,
advice on the most recent estimates of the transitional assistance to
be provided to each State and Territory in the financial year and the
20 installment amounts which the Commonwealth should provide to
each State and Territory on the first Tuesday of the following
October and January. This advice should identify the adjustments
for the net difference between preliminary estimates and outcomes
or final estimates for items that were taken into account in the
25 previous year's Guaranteed Minimum Amount for a State or
Territory.
(iv) By 1 March of each subsequent year of the transition period,
advice on the most recent estimates of the transitional assistance to
be provided to each State and Territory in both the current financial
30 year and the next financial year, and the installment amounts which
the Commonwealth should provide to each State and Territory on
the first Tuesday of the following April and July.
(v) By 1 June of each year of the transition period, advice on the
Guaranteed Minimum Amount for each State and Territory in the
35 current financial year.
page 44
Financial Relations Agreement (Consequential Provisions) Bill 1999
Intergovernmental Agreement on the Reform of Schedule 1
Commonwealth-State Financial Relations
Frequency and Amounts of Payments and Repayments
C5. In each year of the transitional period after 2000-01, the Commonwealth
will provide an installment of the guarantee payment to a State or
Territory on the first Tuesday (or the first business day thereafter) of
5 January, April, July and October. The installment amounts will reflect
the advice to be provided to the Ministerial Council by the Heads of
Treasuries under paragraph C4.
C6. Adjustments to the total amount of additional assistance to a State or
Territory in light of actual GST collections and the Treasurer's
10 determination of the Guaranteed Minimum Amount will be made in
conjunction with the payments of GST revenue grants after 10 June in
each year.
C7. A State or Territory will repay a loan which it receives from the
Commonwealth in 2000-01 in quarterly installments in 2001-02. These
15 installments will be paid to the Commonwealth on the same day on which
a State or Territory receives an amount of GST revenue grants in the
months of July, October, January and April.
C8. The methodology for calculating the amounts of particular components of
the Guaranteed Minimum Amount for a State or Territory has been
20 agreed by the Heads of Treasuries and is set out in the document titled
Methodology for Estimation of Components of the Guaranteed Minimum
Amount.
page 45
Financial Relations Agreement (Consequential Provisions) Bill 1999
Schedule 1 Intergovernmental Agreement on the Reform of
Commonwealth-State Financial Relations
APPENDIX D
FIRST HOME OWNERS SCHEME
Principles
D1. The States and Territories will make legislative provision for the First
5 Home Owners Scheme (FHOS) from 1 July 2000 which will incorporate
programme criteria consistent with the following principles:
(i) Eligible applicants will be entitled to $7,000 assistance (per
application) on eligible homes under the FHOS.
(ii) Assistance will be available directly as a one off payment. If the
10 recipient expressly consents, it may be available as an offset
against statutory levies and charges or some combination of these.
(iii) Eligible applicants must be natural persons who are Australian
citizens or permanent residents who are buying or building their
first home in Australia. An applicant's spouse (or de facto) must
15 be included on the application.
(iv) To qualify for assistance, neither the applicant or the applicant's
spouse (or de facto) must have previously owned a home, either
jointly, separately or with some other person.
(v) Entering into a binding contract or commencement of building
20 in the case of owner builders, must have occurred on or after
1 July 2000.
(vi) An eligible home will be a new or established house, home unit,
flat or other type of self contained fixed dwelling that meets local
planning standards. Fixed dwellings will include demountable
25 dwellings where these meet local planning standards.
(vii) An eligible home must be intended to be a principal place of
residence and occupied within a reasonable period. The home
must be located in the State or Territory in which the application is
made. Applicants who have entered into a financing mechanism
30 which involves a shared equity arrangement will be eligible.
(viii) Assistance will not be means tested.
page 46
Financial Relations Agreement (Consequential Provisions) Bill 1999
Intergovernmental Agreement on the Reform of Schedule 1
Commonwealth-State Financial Relations
(ix) The relevant State and Territory legislation will contain adequate
administrative review and appeal mechanisms, along with
provision to prevent abuse of the FHOS. The States and Territories
will cooperate in the exchange of information to identify eligible
5 first home owners.
Other matters
D2. Funding of grants under the FHOS may not be drawn from Home
Purchase Assistance (HPA) funds provided through the Commonwealth
State Housing Agreement, including the pool of existing HPA revenues.
10 D3. Further details concerning eligibility criteria consistent with the above
principles are to be agreed between the Commonwealth and each State
and Territory.
D4. The States and Territories will not introduce or vary any taxes or charges
associated with home purchase with the intention of offsetting the
15 benefits of the FHOS for recipients.
page 47
Financial Relations Agreement (Consequential Provisions) Bill 1999
Schedule 1 Intergovernmental Agreement on the Reform of
Commonwealth-State Financial Relations
APPENDIX E
GST ADMINISTRATION
E1. The Commissioner of Taxation has the general administration of the
GST law.
5 E2. The ATO will arrange for the Australian Customs Service to assist with
the collection of the GST on imports.
E3. During the first 12 months following the implementation of the GST, the
Commonwealth will retain the discretion to make changes to the GST
base of an administrative nature. For this purpose, changes of an
10 administrative nature involves legislation necessary to:
(i) protect the integrity of the GST base; or
(ii) prevent tax avoidance.
E4. The Commonwealth will include the definition of change of an
administrative nature in the A New Tax System (Commonwealth-State
15 Financial Arrangements) Bill 1999.
E5. From July 2001, changes of an administrative nature as defined in E3 will
require the majority support of the Commonwealth, States and
Territories.
E6. The GST Administration Sub-Committee, which will commence
20 operation from 1 July 1999, will monitor the operation and administration
of the GST and make recommendations regarding modifications to the
GST and the administration of the GST.
E7. The GST Administration Sub-Committee will comprise officials from
each Party to the Agreement including representatives from the ATO as
25 required. The Commonwealth Treasury will chair the GST
Administration Sub-Committee.
E8. The Chair will convene the GST Administration Sub-Committee in
consultation with other members of the Sub-Committee as often as may
be necessary to conduct its business. If the Chair receives a request from
30 a member of the Sub-Committee, the Chair will consult with the other
members concerning convening a meeting.
page 48
Financial Relations Agreement (Consequential Provisions) Bill 1999
Intergovernmental Agreement on the Reform of Schedule 1
Commonwealth-State Financial Relations
E9. The functions of the Sub-Committee will include:
(i) monitoring the performance of the ATO in the administration of
the GST (Appendix F of this Agreement);
(ii) the assessment of policy proposals for the modification of the
5 GST rate and base;
(iii) making recommendations to the Ministerial Council on the need
for legislation which might significantly affect the GST base; and
(iv) requesting the ATO to produce draft Public Rulings in specified
areas.
10 E10. The States and Territories will be consulted on draft Public Rulings prior
to consideration by the ATO Rulings Panel and before public
consultation. There will be a representative from the States and
Territories on the ATO Rulings Panel in relation to GST matters.
E11. Public rulings will not be referred to the Ministerial Council. However,
15 the GST Administration Sub-Committee will refer a proposed GST
change to the Ministerial Council for consideration if the Sub-Committee
is of the view that the change could have a significant impact on GST
revenues and so warrants Ministerial review.
E12. Draft legislation which might significantly affect the GST base will be
20 forwarded through the GST Administrative Sub-Committee to the
Ministerial Council for consideration.
page 49
Financial Relations Agreement (Consequential Provisions) Bill 1999
Schedule 1 Intergovernmental Agreement on the Reform of
Commonwealth-State Financial Relations
APPENDIX F
GST ADMINISTRATION PERFORMANCE AGREEMENT - GUIDING
PRINCIPLES
Preamble
5 F1. This Appendix outlines the principles that will guide the subsequent
development of a GST Administration Performance Agreement (the
Performance Agreement) between the ATO and its agents, and the States
and Territories (the Parties).
Objectives and Context of the Performance Agreement
10 F2. The purpose of the Performance Agreement is to provide accountability
between the ATO and the States and Territories on behalf of whom the
GST revenue is being collected. It also provides an agreed basis for the
GST Administration Sub-Committee to monitor the administration of the
GST by the ATO and its agents in return for the agreed GST
15 administration costs being paid by the States and Territories.
F3. The Performance Agreement will reflect the commitment by the Parties
to:
(i) achieving world's best practice for GST administration in
Australia;
20 (ii) a cost-effective and transparent GST administration; and
(iii) a cooperative relationship between the Parties.
F4. The Performance Agreement will recognise that achievement of world's
best practice GST administration, including cost-effectiveness, is
dependent on the GST policy framework and integrated administrative
25 design.
F5. The Performance Agreement will be consistent with the arrangements set
out in this Intergovernmental Agreement.
Components of Agreement
F6. The Performance Agreement will include outcomes to be achieved,
30 budgeting arrangements and monitoring and review arrangements for the
purposes of maintaining accountability and transparency of operations.
page 50
Financial Relations Agreement (Consequential Provisions) Bill 1999
Intergovernmental Agreement on the Reform of Schedule 1
Commonwealth-State Financial Relations
The Performance Agreement will also include the process for raising
matters of operational significance with the Ministerial Council.
Outcomes
F7. The Performance Agreement will stipulate performance outcomes and
5 appropriate benchmarks to be achieved by the ATO. These outcomes
may include, but are not limited to: revenue, taxpayer registration,
compliance, reporting, education and legislative review. Consistent with
the objectives of the Agreement, the benchmarks are to reflect world best
practice in GST administration.
10 Cost of Administration
F8. The Performance Agreement will outline the Commonwealth
administration activities that are GST related for the purposes of agreeing
the GST administration costs.
F9. The Performance Agreement will stipulate arrangements for an audit of
15 GST costs and the systems for the control of GST costs.
F10. The Performance Agreement will outline the process and timing of
consultation for developing/modifying budgets and business plans for
GST administration. These budgets and business plans will be
developed, and/or revised, in an appropriate and timely manner so as to
20 broadly accord with Commonwealth arrangements for funding agency
operations.
F11. The Performance Agreement will recognise that the States and Territories
will fully compensate the Commonwealth for the agreed costs of
administering the GST.
25 Monitoring and Review
F12. The Performance Agreement will stipulate the:
(i) number and timing of formal reports by the ATO to the
Sub-Committee;
(ii) number and timing of progress reports by the ATO to the
30 Sub-Committee; and
(iii) arrangements for special briefings on particular issues.
page 51
Financial Relations Agreement (Consequential Provisions) Bill 1999
Schedule 1 Intergovernmental Agreement on the Reform of
Commonwealth-State Financial Relations
F13. The Parties to the Performance Agreement will ensure appropriate
alignment of ATO Parliamentary reporting responsibilities and reporting
responsibilities under the Performance Agreement.
F14. The Performance Agreement will stipulate that ATO reports to the
5 Sub-Committee on outcomes will include:
(i) updates on relevant internal governance arrangements, including
appropriate strategic plans and annual and other relevant reports
that scrutinise aspects of GST operations (including annual and
other relevant reports from the Australian National Audit Office);
10 (ii) accrual-based financial reports;
(iii) key outcome performance indicators (including, registrations,
revenue, refunds, costs, key processing workloads, Taxpayer
Charter standards and international benchmark comparisons);
(iv) litigation and public ruling information;
15 (v) updates on relevant compliance and cost-of-compliance research;
(vi) administrative base issues; and
(vii) commentary on administrative performance and any key emerging
GST compliance issues and related initiatives.
F15. The Performance Agreement will ensure that the States and Territories
20 will have access to GST data held by the ATO subject to statutory
limitations.
Matters of Operational Significance
F16. The Performance Agreement will outline arrangements for raising
matters of operational significance with the Ministerial Council. Matters
25 of operational significance may include disputes over the interpretation of
the Performance Agreement and non-performance by the ATO against
agreed targets. The Performance Agreement will ensure that the ATO
will have the opportunity to provide direct advice to the Ministerial
Council on any matters submitted to the Council.
page 52
Financial Relations Agreement (Consequential Provisions) Bill 1999
Intergovernmental Agreement on the Reform of Schedule 1
Commonwealth-State Financial Relations
Development of Agreement
F17. The Performance Agreement will be developed by the GST
Administration Sub-Committee and representatives of the ATO. The
Performance Agreement is to be developed with reference to both:
5 (i) the guiding principles outlined in this Appendix; and
(ii) actual GST performance data (including revenue) in the Australian
context, gathered during the transitional years.
F18. The Performance Agreement is to be finalised by the end of the GST
transitional year ending June 2002. The Performance Agreement is to be
10 endorsed by the Ministerial Council prior to being signed.
F19. The Performance Agreement will stipulate the process for its amendment.
Transitional Arrangements
F20. The ATO and the GST Administration Sub-Committee will discuss
key operational issues and costs commencing in October 1999 and on
15 a semiannual basis throughout the GST transitional year ending
30 June 2002.
F21. The ATO will arrange for an audit of the systems for the control of GST
costs and the GST costs incurred during the period from 1 July 1999 to
the date of the signing of the Performance Agreement by the Parties.
20 F22. The ATO will undertake to establish, by the end of the Transitional year
ending 30 June 2002, final GST benchmarking arrangements with
relevant overseas administrations, subject to their agreement. The ATO
will discuss benchmarking plans with the GST Administration
Sub-Committee.
25
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