By the time this edition goes to print, we should have a clearer indication of how the Federal Government’s Tax Reform package is likely to fare in the Senate. Following the $500,000 Senate Inquiry, the pros and cons of the proposals remain locked along Party lines. Similarly, there are conflicting statistics being bandied around concerning groups in the community being worse or better off under the package.
With the support of the two Independent Senators, Harradine and Colston, looking more and more likely to be the Government’s only chance to push this Legislation through before the new Senate comes into being on 1 July, it is still a line ball as to whether we will get a GST and, if so, what form it will take.
As the debate continues over the fairness of the package, particularly the equity of large tax cuts to high income earners and adequate compensation for those on low or fixed incomes, public opinion is also becoming more divided. There is a consensus that Australia does need tax reform but the question remains is the package being proposed the panacea we are wanting.
As the wrangling and the deals go on in Canberra, Local Government concern continues about the impact on Councils and communities of both a GST and changed funding arrangements between the Federal and State Governments.
On the second of these vital issues the Australian Local Government Association (ALGA) achieved a major victory, with the Senate recently passing a resolution rejecting the proposal to transfer responsibility for the payment of Local Government Financial Assistance Grants from the Commonwealth Government to the States and Northern Territory. This is the first element of the Government’s tax bill to be amended by the Senate.
The majority of Senators condemned the Government for seeking to change the 25 year Commonwealth-Local Government funding partnership. They described this proposal as ‘a regressive step that fails to recognise Local Government as an important sphere of government in Australia, a partner of the Commonwealth, and as a fundamental contributor to the wellbeing of the community’.
With the Labor, Democrat, Greens and two Independent Senators in agreement on this issue, ALGA President, Councillor John Campbell, believes this is a very good sign that the majority of Senators are prepared to listen to Local Government concerns. He said, given this victory, ALGA will continue to lobby for the Commonwealth Government to provide Local Government with a set percentage of either a GST or income tax. This would resolve the problem of Local Government funding being frozen at its current low level.
The fact that Local Government was locked out of recent Commonwealth and State Government closed shop negotiations over funding arrangements is further evidence of Local Government not being treated as a real partner.
It is time for the Howard Government to start listening more carefully to concerns being raised in regard to adverse effects aspects the package will have on Councils and their communities. This means the involvement of all spheres of Government in intergovernmental forums and consultation processes.
