National Taxation Reform (Consequential Provisions) Act 2000

i National Taxation Reform (Consequential Provisions) Act 2000 Act No. 6/2000 TABLE OF PROVISIONS Section Page PART 1—PRELIMINARY 1 1. Purposes 1 2. Commencement 2 3. Definitions 2 PART 2—INTERGOVERNMENTAL AGREEMENT 4 4. Intergovernmental Agreement 4 PART 3—PAYMENT OF GST EQUIVALENTS BY STATE ENTITIES 5 5. Voluntary GST equivalent payments 5 6. Directions to State entities 5 PART 4—GOVERNMENT FEES AND CHARGES 6 7. Fees set by statutory rules may be increased 6 PART 5—FINANCIAL INSTITUTIONS DUTY 8 8. Deemed receipts 8 9. New section 17 inserted 8 17. Liability to duty discontinued 8 10. Exempt bank accounts 9 11. New section 32A inserted 9 32A. Application of this Part limited 9 PART 6—PAY-ROLL TAX ACT 1971 11 12. Definitions 11 13. GST not to be included in deemed wages in certain circumstances 11 -- 1 of 62 -- Section Page ii PART 7—STAMPS ACT 1958 13 14. Definitions 13 15. Duty on transfers of quoted marketable securities discontinued 14 16. Exclusion of GST from rental business duty 15 17. Duty on registration and transfer of motor vehicles 16 18. New section 137AJ substituted 17 137AJ. Endorsement of duty on application 17 19. Registered used car dealers 17 20. Marketable security duty 18 21. Exclusion of GST from duty on cattle sales 19 22. Duty on sales of sheep and goats 19 23. Exclusion of GST from duty on pig sales 19 24. Motor vehicle duty 19 25. Repeal of unproclaimed subdivision (5A) of Division 3 of Part II 20 PART 8—ABOLITION OF STAMP DUTY ON BOOKMAKERS' STATEMENTS 21 26. Abolition of duty on bookmakers' statements 21 27. New section 168 inserted 21 168. Transitional provision—repeal of duty on bookmakers' statements 21 PART 9—GAMBLING TAXES AND PAYMENTS 22 28. Club Keno Act 1993 22 29. Gaming and Betting Act 1994 23 30. Gaming Machine Control Act 1991 24 31. Gaming Machine Control Act 1991—statute law revision 28 32. Tattersall Consultations Act 1958 29 PART 10—OTHER AMENDMENTS 30 33. Cessation of State off-road diesel subsidies 30 34. Subsidy for cellar door and mail order wine sales 30 35. Duty on sale of livestock 31 __________________ SCHEDULE—Intergovernmental Agreement on the Reform of Commonwealth–State Financial Relations 32 ═══════════════ NOTES 60 -- 2 of 62 -- 1 National Taxation Reform (Consequential Provisions) Act 2000 † [Assented to 11 April 2000] The Parliament of Victoria enacts as follows: PART 1—PRELIMINARY 1. Purposes The purposes of this Act are— (a) to record the State's intention to give effect to the Intergovernmental Agreement on the Reform of Commonwealth–State Financial Relations; Victoria No. 6 of 2000 -- 3 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 2 (b) to enable State entities to make GST equivalent payments; (c) to amend the Financial Institutions Duty Act 1982 and the Stamps Act 1958 to discontinue financial institutions duty and stamp duty on certain share transfers and on bookmakers' statements; (d) to alter government fees and charges to take GST into account; (e) to amend various Acts as a consequence of national taxation reform. 2. Commencement (1) This Act, except Parts 8 and 9 and sections 17, 18, 19, 24, 33 and 34, comes into operation on the day after the day on which it receives the Royal Assent. (2) Section 31 is deemed to have come into operation on 17 February 1999. (3) The remaining provisions of Part 9 and sections 17, 18, 19, 24, 33 and 34 come into operation on 1 July 2000. (4) Part 8 comes into operation on 3 July 2000. 3. Definitions In this Act— "Commissioner of Taxation" means the person holding office for the time being as Commissioner of Taxation under the Taxation Administration Act 1953 of the Commonwealth; "GST" has the same meaning as it has in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth; s. 2 -- 4 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 3 "GST Imposition Acts" means the following Acts of the Commonwealth— (a) A New Tax System (Goods and Services Tax Imposition—Customs) Act 1999; (b) A New Tax System (Goods and Services Tax Imposition—Excise) Act 1999; (c) A New Tax System (Goods and Services Tax Imposition—General) Act 1999; "Intergovernmental Agreement" means the Intergovernmental Agreement on the Reform of Commonwealth–State Financial Relations set out in the Schedule; "State entity" means a person that is not liable for GST that it would be liable for if— (a) the imposition of that GST were not prevented by section 114 of the Commonwealth Constitution; and (b) section 5 of each of the GST Imposition Acts had not been enacted. _______________ s. 3 -- 5 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 4 PART 2—INTERGOVERNMENTAL AGREEMENT 4. Intergovernmental Agreement (1) A copy of the Intergovernmental Agreement on the Reform of Commonwealth–State Financial Relations is set out in the Schedule. (2) It is the intention of the State to comply with, and give effect to, the Intergovernmental Agreement. _______________ s. 4 -- 6 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 5 PART 3—PAYMENT OF GST EQUIVALENTS BY STATE ENTITIES 5. Voluntary GST equivalent payments A State entity may pay to the Commissioner of Taxation amounts representing amounts that would have been payable for GST if— (a) the imposition of that GST were not prevented by section 114 of the Commonwealth Constitution; and (b) section 5 of each of the GST Imposition Acts had not been enacted— and may do things of a kind that it would be necessary or expedient for it to do if it were liable for that GST. 6. Directions to State entities (1) The Treasurer may give a State entity written directions that it— (a) make payments that it is authorised by section 5 to make; (b) do anything else that it is authorised by that section to do. (2) The Treasurer, by a further written direction given to the State entity, may amend or revoke a direction previously given under this section. (3) Requirements in a direction under this section may relate to things that have happened before the direction was given. (4) A State entity is to comply with directions under this section despite any other written law. _______________ s. 5 -- 7 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 6 PART 4—GOVERNMENT FEES AND CHARGES 7. Fees set by statutory rules may be increased (1) The Governor in Council, on the recommendation of the Minister, may make regulations providing for a fee or charge set by a statutory rule specified in the regulations to be increased by an amount or a percentage specified in the regulations. (2) Except as provided in sub-section (6), the increase in the fee or charge cannot exceed the amount of GST payable on the supply to which the fee or charge relates. (3) The Minister may make a recommendation under sub-section (1) only if he or she considers that the increase in the fee or charge is necessary to cover the increased cost of the supply to which the fee or charge relates as a result of the implementation of— (a) the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth; and (b) the GST Imposition Acts; and (c) the Intergovernmental Agreement. (4) Part 2 of the Subordinate Legislation Act 1994 does not apply to regulations made under this section. (5) A fee or charge may be increased only once under this section. (6) In determining the amount of GST payable on the supply to which a fee or charge relates for the purposes of regulations under this section, the fee or charge is to be taken to be payable in relation to supplies made wholly on or after 1 July 2000. (7) Despite sub-section (6), the increase in a fee or charge under this section does not apply to that s. 7 -- 8 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 7 part of the supply to which the fee or charge relates that is in respect of the period before 1 July 2000 and any such fee or charge must be reduced accordingly. (8) In this section— "GST" includes notional GST of the kind for which payments may be made under Part 3 by a State entity. _______________ s. 7 -- 9 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 8 PART 5—FINANCIAL INSTITUTIONS DUTY 8. Deemed receipts (1) At the end of section 8 of the Financial Institutions Duty Act 1982 insert— "(2) Sub-section (1) does not apply to a receipt of consideration after 30 June 2001.". (2) In section 9 of the Financial Institutions Duty Act 1982, after sub-section (2) insert— "(3) This section does not apply to an amount deposited or credited to an account, or transferred or transmitted to or for the credit of an account, after 30 June 2001.". (3) In section 10 of the Financial Institutions Duty Act 1982, for sub-section (2) substitute— "(2) Sub-section (1) does not apply— (a) in any case where section 8 or 9 applies in relation to the amount credited; or (b) to an amount credited after 30 June 2001.". 9. New section 17 inserted After the heading to Part III of the Financial Institutions Duty Act 1982 insert— "17. Liability to duty discontinued (1) Liability to pay financial institutions duty in respect of a receipt of money does not arise under section 18(1) if the money is received after 30 June 2001. (2) Liability to pay financial institutions duty in respect of broker receipts does not arise under section 18(2A) if the broker receipts are received or retained after 30 June 2001. No. 9850. Reprint No. 4 as at 9 December 1999. Further amended by No. 34/1999. s. 8 -- 10 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 9 (3) Liability to pay financial institutions duty in respect of the average daily liability during a month of a registered short-term money market operator does not arise under section 20 in respect of any month after June 2001. (4) Liability to pay financial institutions duty in respect of a deposit of money does not arise under section 21(1) if the money is deposited after 30 June 2001.". 10. Exempt bank accounts In section 32 of the Financial Institutions Duty Act 1982, after sub-section (3) insert— "(4) After 30 June 2001, sub-section (1) applies only in relation to a financial year that ended on or before that day and to amounts paid into or out of exempt bank accounts on or before that day. (5) If the Commissioner has approved a year ending on a date other than 30 June as a financial year, the financial year that, but for this sub-section, would have ended after 30 June 2001 is to be taken to have ended on that day.". 11. New section 32A inserted After the heading to Part V of the Financial Institutions Duty Act 1982 insert— "32A. Application of this Part limited (1) An application for registration as a financial institution is not required to be made under section 33(1) or (4) after 30 June 2001 and cannot be made under section 33(2) after that day. s. 10 -- 11 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 10 (2) Sections 35 and 35A do not require a return to be furnished relating to a month ending after 30 June 2001. (3) An application for registration as a short- term money market operator cannot be made under section 37(1) after 30 June 2001. (4) Section 38 does not require a return to be furnished relating to a month ending after 30 June 2001. (5) An application for registration as a depositor is not required to be made under section 40(1) or (4) after 30 June 2001. (6) Section 42 does not require a return to be furnished relating to a month ending after 30 June 2001. (7) Sections 36, 39 and 43 apply only in relation to a period for which a return was required.". _______________ s. 11 -- 12 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 11 PART 6—PAY-ROLL TAX ACT 1971 12. Definitions In section 3(1) of the Pay-roll Tax Act 1971, after the definition of "fringe benefit" insert— ' "GST" has the same meaning as it has in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth except that it includes notional GST of the kind for which payments may be made under Part 3 of the National Taxation Reform (Consequential Provisions) Act 2000 by a person that is a State entity within the meaning of that Act;'. 13. GST not to be included in deemed wages in certain circumstances (1) In section 3C(6) of the Pay-roll Tax Act 1971— (a) at the end of paragraphs (e) and (f) omit "and"; (b) after paragraph (g) insert— "(h) a reference in sub-section (2)(c) to an amount paid or payable by an employer does not include a reference to an amount in respect of any GST payable on the supply to which the amount paid or payable by the employer relates.". (2) In section 3D(2)(c) of the Pay-roll Tax Act 1971, for "sub-section (3)" substitute "sub-sections (2A) and (3)". (3) After section 3D(2) of the Pay-roll Tax Act 1971 insert— "(2A) An amount referred to in sub-section (2)(c) paid or payable in connection with an No. 8154. Reprint No. 7 as at 1 September 1999. Further amended by 34/1999. s. 12 -- 13 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 12 employment agency contract does not include an amount in respect of any GST payable on the supply to which the employment agency contract relates.". (4) After section 3F(1) of the Pay-roll Tax Act 1971 insert— "(1A) The Commissioner cannot include in a determination under sub-section (1)(c) in respect of a contract an amount in respect of any GST payable on the supply to which the contract relates.". _______________ s. 13 -- 14 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 13 PART 7—STAMPS ACT 1958 14. Definitions (1) In section 3 of the Stamps Act 1958— (a) after the definition of "futures contract" insert— ' "GST" has the same meaning as it has in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth except that it includes notional GST of the kind for which payments may be made under Part 3 of the National Taxation Reform (Consequential Provisions) Act 2000 by a person that is a State entity within the meaning of that Act;'; (b) for the definition of "recognised stock exchange" substitute— ' "recognised stock exchange" means— (a) a stock exchange that is a member of the Fédération Internationale des Bourses de Valeurs; or (b) the Stock Exchange of Newcastle; or (c) a stock exchange prescribed as a recognised stock exchange for the purposes of this Act;'. (2) In section 26A(4) of the Stamps Act 1958, in the definition of "private company", for "listed on" substitute "quoted on the market operated by". No. 6375. Reprint No. 15 as at 1 May 1999. Further amended by Nos 32/1999, 34/1999 and 47/1999. s. 14 -- 15 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 14 15. Duty on transfers of quoted marketable securities discontinued (1) In section 55A of the Stamps Act 1958, for sub- section (1) substitute— "(1) This subdivision does not apply to— (a) an SCH-regulated transfer to which subdivision (4AB) applies; or (b) a transfer of a marketable security or right in respect of shares— (i) made or executed to perfect a sale or purchase to which subdivision (4AA) applies; and (ii) deemed to be duly stamped in accordance with that subdivision; or (c) a transfer after 30 June 2001 of a marketable security, or right in respect of shares, quoted on the market operated by Australian Stock Exchange Limited or a recognised stock exchange.". (2) In section 60A of the Stamps Act 1958, for sub- section (2) substitute— "(2) This subdivision and subdivision (4AA) apply only to a sale or purchase effected before 1 July 2001 of a marketable security, or right in respect of shares— (a) quoted on the market operated by Australian Stock Exchange Limited; and (b) made for a consideration in money or money's worth of not less than the unencumbered value of the marketable security or right in respect of shares.". s. 15 -- 16 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 15 (3) After section 60EA(a) of the Stamps Act 1958 insert— "(ab) the transfer is made before 1 July 2001; and". (4) In section 60EJ of the Stamps Act 1958, after sub-section (5) insert— "(6) SCH is not required to lodge a return or pay duty under this section in respect of a month occurring after June 2001.". (5) In section 60H(1) of the Stamps Act 1958, for paragraph (a) substitute— "(a) there is an instrument of transfer on which duty is payable under this Act and it is not duly stamped; or". (6) In section 60J(a) of the Stamps Act 1958, after "made" insert "before 1 July 2001". (7) In section 62G of the Stamps Act 1958, after sub-section (2) insert— "(3) A statement is not required to be lodged under this section in relation to an entitlement arising after 30 June 2001 to shares quoted on the market operated by Australian Stock Exchange Limited or a recognised stock exchange.". (8) In section 62I(1)(a) and (b) of the Stamps Act 1958, after "Limited" insert "or a recognised stock exchange". (9) In section 75I(1)(a) of the Stamps Act 1958, for "listed on" substitute "quoted on the market operated by". 16. Exclusion of GST from rental business duty In section 131AC(4) of the Stamps Act 1958— (a) at the end of paragraph (b) omit "or"; s. 16 -- 17 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 16 (b) after paragraph (c)(ii) insert— "(d) any GST payable on supplies to which the rental agreements or special rental agreements relate—". 17. Duty on registration and transfer of motor vehicles (1) In section 137AB(1) of the Stamps Act 1958, after "make" insert "or lodge". (2) In section 137AB of the Stamps Act 1958, after sub-section (2) insert— "(3) A person (other than a registered used car dealer) who— (a) acquires a motor car within the meaning of the Motor Car Traders Act 1986 from a registered used car dealer; and (b) lodges an application for transfer of registration of the motor car under the Road Safety Act 1986— must also lodge with the application a copy of the agreement for sale of the motor car supplied to the person under section 41 of the Motor Car Traders Act 1986, unless the application is exempt from duty under this Act.". (3) In the Stamps Act 1958— (a) in section 137AD, after "making" insert "or lodging"; (b) in section 137AH(1), for "the duty required to be paid on that return" substitute "the amount required to be paid on the return under section 137AK(1)(b) (if any)". s. 17 -- 18 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 17 18. New section 137AJ substituted For section 137AJ of the Stamps Act 1958 substitute— "137AJ. Endorsement of duty on application (1) This section applies if— (a) a person acquires a motor vehicle or heavy trailer from a registered used car dealer; and (b) the motor vehicle or heavy trailer is registered under the Road Safety Act 1986; and (c) the acquirer pays to the registered used car dealer the duty payable on the application for transfer of registration of the motor vehicle or heavy trailer. (2) If this section applies, the registered used car dealer must endorse on the application for transfer of registration— (a) the dealer's code number; and (b) a statement that the acquirer has paid to the registered used car dealer the duty payable on the application and the amount of duty paid. Penalty: 100 penalty units.". 19. Registered used car dealers (1) In section 137AK of the Stamps Act 1958— (a) in sub-section (1), for paragraph (b) substitute— "(b) pay to the Comptroller any amounts received from acquirers of motor vehicles or heavy trailers during the preceding month in respect of stamp s. 18 -- 19 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 18 duty payable on applications for transfer of registration of those vehicles or trailers."; (b) in sub-section (2), for "duty" substitute "an amount". (2) Section 137AL of the Stamps Act 1958 is repealed. (3) At the end of section 137AM of the Stamps Act 1958 insert— "(2) A person must not endorse on an application for transfer of registration a statement that the acquirer has paid to a registered used car dealer any duty payable on that application unless the acquirer has paid the duty to the registered used car dealer. Penalty: 100 penalty units. (3) A person must not endorse on an application for transfer of registration an amount of duty other than the amount of duty actually paid by the acquirer to the registered used car dealer. Penalty: 100 penalty units.". (4) Section 137AQ of the Stamps Act 1958 is repealed. 20. Marketable security duty (1) In clauses 1(e)(i) and 2(a) in Heading IV(A) in the Third Schedule to the Stamps Act 1958, for "listed on the" substitute "quoted on the market operated by". (2) After clause 2 in Heading IV(A) in the Third Schedule to the Stamps Act 1958 insert— "3. Duty is not payable under this Heading on a transfer after 30 June 2001 of a marketable security, or right in respect of shares, quoted on the market operated by s. 20 -- 20 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 19 Australian Stock Exchange Limited or a recognised stock exchange.". 21. Exclusion of GST from duty on cattle sales In clause (3) in Heading XVII in the Third Schedule to the Stamps Act 1958, after the definition of "calf" insert— ' "purchase money" for a sale does not include an amount in respect of any GST payable on the supply to which the sale relates.'. 22. Duty on sales of sheep and goats In Heading XVIIA in the Third Schedule to the Stamps Act 1958, after "($0.12)" insert "for each sheep, goat or carcase sold". 23. Exclusion of GST from duty on pig sales (1) In Heading XVIII in the Third Schedule to the Stamps Act 1958— (a) before "Any statement" insert "(1)"; (b) omit 'Under this heading XVIII, "pig" means any boar sow barrow or sucker.'. (2) At the end of Heading XVIII in the Third Schedule to the Stamps Act 1958 insert— '(2) In this Heading— "pig" means any boar, sow, barrow or sucker; "purchase money" for a sale does not include an amount in respect of any GST payable on the supply to which the sale relates.'. 24. Motor vehicle duty In Heading XXI in the Third Schedule to the Stamps Act 1958, exemption (4) is repealed. s. 21 No. 101/1995. -- 21 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 20 25. Repeal of unproclaimed subdivision (5A) of Division 3 of Part II Part 7 of the State Taxation (Further Amendment) Act 1995 is repealed. _______________ s. 25 -- 22 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 21 PART 8—ABOLITION OF STAMP DUTY ON BOOKMAKERS' STATEMENTS 26. Abolition of duty on bookmakers' statements In the Stamps Act 1958— (a) subdivision (12) of Division 3 of Part II is repealed; (b) Heading XV in the Third Schedule is repealed. 27. New section 168 inserted After section 167 of the Stamps Act 1958 insert— "168. Transitional provision—repeal of duty on bookmakers' statements Despite the repeal of subdivision (12) of Division 3 of Part II— (a) a bookmaker must comply with section 120 as in force immediately before that repeal, in respect of the weekly period ending before that repeal; (b) the Comptroller may make an assessment under section 120(6)(a) in respect of a weekly period ending before that repeal; (c) section 118 continues to apply in relation to betting transactions made in a weekly period ending before that repeal, as if it had not been repealed.". _______________ s. 26 -- 23 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 22 PART 9—GAMBLING TAXES AND PAYMENTS 28. Club Keno Act 1993 (1) In section 3 of the Club Keno Act 1993, after the definition of "gaming revenue" insert— ' "GST" has the same meaning as it has in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth;'. (2) In section 7(2) of the Club Keno Act 1993— (a) in paragraph (a), for "331 / 3 per centum" substitute "24·24%"; (b) for paragraph (b) substitute— "(b) to the venue operator of an approved venue in which tickets in club keno games are sold during the week— (i) if GST is payable on the supply to which the amount to be paid under this paragraph relates, an amount calculated in accordance with the formula— GR 30 V T × × 11 where— GR is the gaming revenue for the week; T is the total amount received by the participants for club keno games conducted during the week; No. 56/1993. Reprint No. 2 as at 17 February 1999. Further amended by No. 53/1999. s. 28 -- 24 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 23 V is the amount received at the approved venue for club keno games conducted during the week; (ii) if GST is not payable on the supply to which the amount to be paid under this paragraph relates, an amount calculated in accordance with the formula— GR 3 V T × where— GR is the gaming revenue for the week; T is the total amount received by the participants for club keno games conducted during the week; V is the amount received at the approved venue for club keno games conducted during the week.". (3) In section 7 of the Club Keno Act 1993, after sub-section (6) insert— "(7) This section as amended by section 28 of the National Taxation Reform (Consequential Provisions) Act 2000 applies in respect of a week commencing after 1 July 2000.". 29. Gaming and Betting Act 1994 (1) In section 45(1) of the Gaming and Betting Act 1994, for "28·2%" substitute "19·11%". (2) In section 45 of the Gaming and Betting Act 1994, after sub-section (4) insert— No. 37/1994. Reprint No. 2 as at 10 February 2000. Further amended by No. 41/1999. s. 29 -- 25 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 24 "(5) This section as amended by section 29 of the National Taxation Reform (Consequential Provisions) Act 2000 applies to amounts deducted in respect of 1 July 2000 and any subsequent day.". (3) In section 74(1) of the Gaming and Betting Act 1994, for "28·2%" substitute "19·11%". (4) In section 74 of the Gaming and Betting Act 1994, after sub-section (4) insert— "(5) This section as amended by section 29 of the National Taxation Reform (Consequential Provisions) Act 2000 applies to amounts deducted and fractions retained in respect of 1 July 2000 and any subsequent day.". (5) In section 77 of the Gaming and Betting Act 1994— (a) in sub-section (1), for "20%" substitute "10·91%"; (b) in sub-section (2), for "28·2%" substitute "19·11%". (6) In section 77 of the Gaming and Betting Act 1994, after sub-section (5) insert— "(6) This section as amended by section 29 of the National Taxation Reform (Consequential Provisions) Act 2000 applies in respect of a period commencing on or after 1 July 2000.". 30. Gaming Machine Control Act 1991 (1) In section 136 of the Gaming Machine Control Act 1991, for sub-section (3) substitute— "(3) The following are the amounts to be paid under this sub-section— (a) to the venue operator of an approved No. 53/1991. Reprint No. 6 as at 10 February 2000. Further amended by Nos 117/1993, 90/1997 and 41/1999. s. 30 -- 26 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 25 venue in respect of which a licence referred to in section 12A(1)(b) or (d) is in force and at which a gaming machine of the gaming operator is played— (i) in the case of the holder of a gaming operator's licence under Part 3 or a company declared under section 3A to be an operator in relation to such a licence—the prescribed percentage of the total daily net cash balances during that period of gaming machines of the gaming operator at the venue; (ii) in the case of the holder of a gaming licence under the Gaming and Betting Act 1994— (A) if GST is payable on the supply to which the amount to be paid under this sub- paragraph relates—36 2 / 3 % of the total daily net cash balances during that period of gaming machines of the gaming operator at the venue; (B) if GST is not payable on the supply to which the amount to be paid under this sub- paragraph relates—33 1 / 3 % of the total daily net cash balances during that period of gaming machines of the gaming operator at the venue; (b) to the venue operator of an approved venue in respect of which a licence s. 30 -- 27 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 26 referred to in section 12A(1)(a) is in force and at which a gaming machine of the gaming operator is played— (i) in the case of the holder of a gaming operator's licence under Part 3 or a company declared under section 3A to be an operator in relation to such a licence—the prescribed percentage of the total daily net cash balances during that period of gaming machines of the gaming operator at the venue; (ii) in the case of the holder of a gaming licence under the Gaming and Betting Act 1994— (A) if GST is payable on the supply to which the amount to be paid under this sub- paragraph relates—27·5% of the total daily net cash balances during that period of gaming machines of the gaming operator at the venue; (B) if GST is not payable on the supply to which the amount to be paid under this sub- paragraph relates—25% of the total daily net cash balances during that period of gaming machines of the gaming operator at the venue; s. 30 -- 28 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 27 (c) to the Authority to be paid into the Consolidated Fund— (i) in the case of the holder of a gaming operator's licence under Part 3 or a company declared under section 3A to be an operator in relation to such a licence—the prescribed percentage of the total daily net cash balances during that period of gaming machines of the gaming operator at the venue in respect of which a licence referred to in section 12A(1)(a) is in force; (ii) in the case of the holder of a gaming licence under the Gaming and Betting Act 1994—81 / 3 % of the total daily net cash balances during that period of gaming machines of the gaming operator at the venue in respect of which a licence referred to in section 12A(1)(a) is in force; (d) to the Authority to be paid into the Consolidated Fund— (i) in the case of the holder of a gaming operator's licence under Part 3 or a company declared under section 3A to be an operator in relation to such a licence—the prescribed percentage of the total daily net cash balances during that period of all gaming machines of the gaming operator at approved venues; s. 30 -- 29 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 28 (ii) in the case of the holder of a gaming licence under the Gaming and Betting Act 1994—24·24% of the total daily net cash balances during that period of all gaming machines of the gaming operator at approved venues.". (2) In section 136 of the Gaming Machine Control Act 1991— (a) sub-sections (3C) and (3D) are repealed; (b) in sub-section (5), after the definition of "daily net cash balance" insert— ' "GST" has the same meaning as it has in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth.'. 31. Gaming Machine Control Act 1991—statute law revision (1) In section 136(3) of the Gaming Machine Control Act 1991— (a) in paragraph (a), for "12A(1)(c)" substitute "12A(1)(b)"; (b) in paragraph (b), for "12A(1)(a) or (b)" substitute "12A(1)(a)"; (c) in paragraph (c), for "12A(1)(a) or (b)" substitute "12A(1)(a)". (2) In section 136A of the Gaming Machine Control Act 1991— (a) for "12A(1)(c)" (wherever occurring) substitute "12A(1)(b)"; (b) for "12A(1)(a) or (b)" substitute "12A(1)(a)". s. 31 -- 30 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 29 32. Tattersall Consultations Act 1958 (1) In section 3 of the Tattersall Consultations Act 1958, after the definition of "Director" insert— ' "GST" has the same meaning as it has in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth;'. (2) In section 6(1) of the Tattersall Consultations Act 1958— (a) in paragraph (a), for "36 per centum" substitute "32·36%"; (b) in paragraph (b), for "34 per centum" substitute "29·46%". (3) In section 12 of the Tattersall Consultations Act 1958, after sub-section (3) insert— "(4) This Act as amended by section 32 of the National Taxation Reform (Consequential Provisions) Act 2000 applies to Consultations and soccer football pools conducted on or after 1 July 2000.". _______________ No. 6390. Reprint No. 7 as at 24 November 1998. Further amended by Nos 4/1999, 46/1998 (as amended by No. 12/1999), 12/1999, 47/1999 and 53/1999. s. 32 -- 31 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 30 PART 10—OTHER AMENDMENTS 33. Cessation of State off-road diesel subsidies In the Business Franchise (Petroleum Products) Act 1979— (a) in section 2(1), the definition of "exemption certificate" is repealed; (b) in section 17(1), paragraphs (a) and (b) are repealed; (c) in section 18(1), for "section 17(1)(a), (b) or (c)" substitute "section 17(1)(c)"; (d) sections 19, 20, 20A and 20B are repealed. 34. Subsidy for cellar door and mail order wine sales (1) In section 177(1) of the Liquor Control Reform Act 1998, for "sales taxes" substitute "taxes". (2) In section 179 of the Liquor Control Reform Act 1998, for sub-section (1) substitute— "(1) A person who is in a class of persons determined by the Commissioner of State Revenue who hold, or have held, licences must make a record of sales and purchases of liquor and keep each record for a period of 5 years after it was made. (1A) A determination of the Commissioner of State Revenue for the purposes of sub- section (1)— (a) must be published in the Government Gazette and in a newspaper generally circulating in Victoria; (b) takes effect on the date it is published or on the later date specified in it.". No. 9272. Reprint No. 4 as at 19 March 1998. Further amended by No. 103/1998. s. 33 No. 94/1998. Amended by No. 24/1999. -- 32 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 31 35. Duty on sale of livestock (1) In section 3 of the Livestock Disease Control Act 1994, after the definition of "goat" insert— ' "GST" has the same meaning as it has in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth except that it includes notional GST of the kind for which payments may be made under Part 3 of the National Taxation Reform (Consequential Provisions) Act 2000 by a person that is a State entity within the meaning of that Act;'. (2) In section 92 of the Livestock Disease Control Act 1994, after sub-section (3) insert— '(4) In this section— "purchase money" for a sale does not include any amount in respect of any GST payable on the supply to which the sale relates.'. __________________ No. 115/1994. Reprint No. 3 as at 13 January 2000. s. 35 -- 33 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 32 SCHEDULE Section 4 INTERGOVERNMENTAL AGREEMENT ON THE REFORM OF COMMONWEALTH–STATE FINANCIAL RELATIONS THE COMMONWEALTH OF AUSTRALIA THE STATE OF NEW SOUTH WALES THE STATE OF VICTORIA THE STATE OF QUEENSLAND THE STATE OF WESTERN AUSTRALIA THE STATE OF SOUTH AUSTRALIA THE STATE OF TASMANIA THE AUSTRALIAN CAPITAL TERRITORY, AND 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 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, Queensland and Tasmania Sch. -- 34 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 33 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 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 (6) this revised Agreement supersedes the previous Agreement of 9 April 1999: IT IS HEREBY AGREED: PART 1—PRELIMINARY Commencement Clause 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 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 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. Acknowledgment of Agreement Sch. -- 35 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 34 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 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. 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 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 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 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 Territory Governments being financially better off under the new arrangements. (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; Sch. -- 36 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 35 • 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; (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 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 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 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 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 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) principles subject to the Sch. -- 37 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 36 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. 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 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 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 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 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 that excess. 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 Sch. -- 38 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 37 funding and administration of a new uniform First Home Owners Scheme. 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 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. 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 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 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 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; (ii) similarly, those regulatory charges that do not relate to particular goods or services should be outside the scope of the GST; and Sch. -- 39 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 38 (iii) the inclusion of any other charge in the Commonwealth Treasurer’s determination notwithstanding that it may relate to the 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 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 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 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 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 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 cooperatively to introduce voluntary payment arrangements in these circumstances. Sch. -- 40 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 39 27. All governments have agreed that no further compensation payments will be payable by any jurisdiction under the SOPI. 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. 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 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 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 (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: (i) the unanimous support of the State and Territory Governments; (ii) the endorsement by the Commonwealth Government of the day; and Sch. -- 41 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 40 (iii) the passage of relevant legislation by both Houses of the Commonwealth Parliament. 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 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 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 (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. 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 between the ATO and the State and Territory Governments consistent with Appendix F to this Agreement. These arrangements will include maximising compliance, cost efficiency, simplicity for taxpayers and administrative transparency. Sch. -- 42 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 41 39. The ATO and State and Territory Governments will collaborate to explore options for the States and Territories to benefit from the use of 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 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: (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; (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; (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 considering any amendments which may be proposed as a consequence of such review; (ix) making recommendations to the Commonwealth Treasurer on the Guaranteed Minimum Amount applying to each State and Territory under the Transitional Arrangements; Sch. -- 43 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 42 (x) approving changes to the GST base which require the support of a 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 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 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 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 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. SIGNED for and on behalf of the Parties by: The Honourable John Winston Howard, Prime Minister of the Commonwealth of Australia, on the 20th day of June 1999 The Honourable Robert John Carr, Premier of the State of New South Wales, on the 24th day of June 1999 The Honourable Jeffrey Gibb Kennett, Sch. Sch. -- 44 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 43 Premier of the State of Victoria, on the 26th day of June 1999 The Honourable Peter Douglas Beattie, Premier of the State of Queensland, on the 25th day of June 1999 The Honourable Richard Fairfax Court, Premier of the State of Western Australia, on the 29th day of June 1999 The Honourable John Wayne Olsen, Premier of the State of South Australia, on the 25th day of June 1999 The Honourable James Alexander Bacon, Premier of the State of Tasmania, on the 25th day of June 1999 Kate Carnell, Chief Minister of the Australian Capital Territory, on the 22nd day of June 1999 The Honourable Denis Gabriel Burke, Chief Minister of the Northern Territory of Australia, on the 22nd day of June 1999 APPENDICES A: Taxes Subject to Reform B: Payment of GST Revenues to the States and Territories C: Transitional Arrangements D: First Home Owners Scheme E: GST Administration Sch. -- 45 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 44 F: GST Administration Performance Agreement—Guiding Principles 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 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 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 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. (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 companies and trusts, and in public companies and trusts where the securities are not quoted on the ASX or another recognised stock exchange. 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 -- 46 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 45 Debits tax levied on the value of withdrawals (debits) from 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 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 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 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 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. 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. (vi) Stamp Duty on Cheques, Bills of Exchange and Promissory Notes Sch. -- 47 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 46 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. APPENDIX B PAYMENT OF GST REVENUES TO THE STATES AND TERRITORIES B1. Subject to the transitional arrangements and other relevant provisions in 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 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 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: (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. 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 month of June; plus Sch. -- 48 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 47 (iii) an adjustment amount (which may be positive or negative) to account for any difference between the estimated and actual 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 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 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 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 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 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 Treasurer; (ii) populations by the Statistician; Sch. -- 49 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 48 (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 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 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. B10. The timing of payments of GST revenue grants may be varied by agreement between the Parties to this Agreement. APPENDIX C TRANSITIONAL ARRANGEMENTS Guarantee in Legislation C1. Commonwealth legislation will provide a State or Territory with an 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. (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. Sch. Sch. -- 50 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 49 (ii) In subsequent transitional years, transitional assistance will be provided to a State or Territory as a grant. 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: 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 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 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. plus Loan Repayments: in 2001–02 only, the repayment of a guarantee loan by a State or Territory. plus 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 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). -- 51 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 50 minus 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 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 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). 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 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 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 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 Sch. Sch. -- 52 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 51 State and Territory in the financial year and the 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 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 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 current financial year. 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 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 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 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. Sch. -- 53 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 52 C8. The methodology for calculating the amounts of particular components of the Guaranteed Minimum Amount for a State or Territory has been agreed by the Heads of Treasuries and is set out in the document titled Methodology for Estimation of Components of the Guaranteed Minimum Amount. APPENDIX D FIRST HOME OWNERS SCHEME Principles D1. The States and Territories will make legislative provision for the First 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 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 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 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 dwellings where these meet local planning standards. Sch. -- 54 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 53 (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 which involves a shared equity arrangement will be eligible. (viii) Assistance will not be means tested. (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 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. 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 benefits of the FHOS for recipients. APPENDIX E GST ADMINISTRATION E1. The Commissioner of Taxation has the general administration of the GST law. 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 administrative nature involves legislation necessary to: (i) protect the integrity of the GST base; or Sch. -- 55 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 54 (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 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 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 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 a member of the Sub-Committee, the Chair will consult with the other members concerning convening a meeting. 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 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. 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. -- 56 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 55 E11. Public rulings will not be referred to the Ministerial Council. However, 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 forwarded through the GST Administrative Sub-Committee to the Ministerial Council for consideration. APPENDIX F GST ADMINISTRATION PERFORMANCE AGREEMENT— GUIDING PRINCIPLES Preamble 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 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 administration costs being paid by the States and Territories. F3. The Performance Agreement will reflect the commitment by the Parties to: Sch. Sch. -- 57 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 56 (i) achieving world’s best practice for GST administration in Australia; (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 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, budgeting arrangements and monitoring and review arrangements for the purposes of maintaining accountability and transparency of operations. 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 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. 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. Sch. -- 58 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 57 F9. The Performance Agreement will stipulate arrangements for an audit of 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 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. 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 Sub-Committee; and (iii) arrangements for special briefings on particular issues. 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 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); (ii) accrual-based financial reports; Sch. -- 59 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 58 (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; (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 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 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. 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: (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 Sch. -- 60 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 59 Performance Agreement is to be 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 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. 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. ═══════════════ Sch. -- 61 of 62 -- Act No. 6/2000 National Taxation Reform (Consequential Provisions) Act 2000 60 NOTES † Minister's second reading speech— Legislative Assembly: 2 March 2000 Legislative Council: 21 March 2000 The long title for the Bill for this Act was "to record the State's intention to give effect to the Intergovernmental Agreement on the Reform of Commonwealth–State Financial Relations and to enable State entities to make GST equivalent payments, to discontinue financial institutions duty and stamp duty on certain share transfers and on bookmakers' statements, to alter government fees and charges to take GST into account, to amend various Acts as a consequence of national taxation reform and for other purposes." Notes -- 62 of 62 --