Speaking at the recent WAMA Annual Conference, Federal Minister, Alex Somlyay, outlined the Howard Government’s policies in respect to Local Government. He said that, under the Coalition’s Tax Package general rates; water and sewerage charges; charges for regulatory and licensing services, such as zoning, planning fees and dogs; and fines and penalties, like parking fines, would all be GST free.
“The GST will not apply to the collection of garbage where the collection is a Council wide activity and noted on the rate notice,” the Minister said.
Recognising that there will be differences on this point, State to State and Council to Council, he said that negotiations will be entered into with Local Government to take account of the differences.
“The GST will apply to Local Government’s commercial activities,” he continued. “This will ensure these commercial activities do not have a head start over the private sector.”
On the issue of Financial Assistance Grants, the Minister said that the Commonwealth will make the payment of GST revenue to the States conditional on the maintenance of growth of general purpose and road payments to Local Government in line with present arrangements.
“Under this new tax plan, the financial position of Local Government is preserved with guaranteed access to the GST revenue,” Alex Somlyay stated.
Shadow Minister, Senator Belinda Neal, provided the following statement on the Labor Party’s position regarding Local Government.
“Local Government is grass roots government,” she said. “It is integral to invigorating our regions. Yet the Howard Government has cut $62.1 million over four years from Financial Assistance Grants to Local Government.
“The Department of Regional Development was abolished and with it approximately $150 million worth of programs, including Better Cities and the urban flood mitigation program. Funding to community services, such as child care, has also been cut.
“In its tax package, the Howard Government abolished Financial Assistance Grants to Local Government. State and Territory Governments will now fund Local Government.
“Rates, water and sewerage are exempt from the Howard Government’s GST, but other Council services will charge GST. Local Councils will pay GST on all goods and services they purchase. Costs will be passed on to ratepayers by reducing services or increasing rates.
“Labor will seek an Agreement between the Commonwealth and Local Government, and Constitutional Recognition for Local Government. We will fund Local Government using Financial Assistance Grants. We will maintain the Local Government Development Program and revitalise regions with a regional development program closely involving Local Government.”
