As the clock counts down to the next millennium, communities across the nation, and the governments that represent them, face some important issues running through to our Centenary of Federation on 1 January 2001.
The first, which we face as a nation, is making a decision at the referendum on 6 November as to whether we move to an Australian head of state. Will we finally cut the last vestige of our colonial past to become a fully independent nation? In spite of some media reports of lack of interest and divergent views on how the head of state should be chosen, with a raft of politicians, sportspeople and other well known Australians now voicing their opinions, there is no doubt debate on this important issue will heat up over the next two months.
Being the end of one century and on the threshold of the next, if Australian electors follow their predecessors at the end of the last century and vote for a change, this foundation for the further reviewing of our Constitution and system of governance may mean Constitutional Recognition of Local Government is not that far away.
Soon after this crucial referendum, we will celebrate the roll over to 2000. As the champagne corks pop at midnight, undoubtedly most of us will be hoping that all the preparations that have been put in place will ensure our systems, which rely on that major invention of this century, the computer chip, do in fact hold up.
Given the world time zones, with New Zealand being the largest nation with extensive computer systems to first experience the change over just hours before Australia, no doubt there will be some urgent phone calls and hook ups just in case problems do occur. This of course assumes that Y2K preparations by the telecommunications industry and those responsible for satellite technology hold up!
Across Australia, Councils have been proactive in both testing and renewing their systems to ensure they are compliant. However, they must also be ready to support their local community in case problems do eventuate. Similar to natural disasters, Councils are the first point of contact and support for communities in times of disruption.
Once we pass this milestone, the next major change will be the introduction of the Goods and Services Tax on 1 July 2000. Similar to Y2K, Council preparations need to start now to ensure the smoothest possible transition to the new system.
According to GST expert, Pat McCarthy from Gadens Accounting in Sydney, Councils face a tougher assignment in implementing the GST to ensure they do not lose out financially, than they have had with Y2K (refer page 1 story). His message to Councils is clear, with less than 11 months to go, start now.
Similarly, Mark Hayes, Partner at Maddock Lonie & Chisholm, told delegates at a recent Local Government Professionals conference in Victoria that the GST is much more than a cashflow issue. Councils must have the people and systems in place to minimise the impact of the GST on their operations, and consequently the communities they serve. Internal training, identifying issues and reviewing documents is vital. He also warned Councils to be prepared for variations in the GST rate, noting that in most countries the rate has increased after the introduction of this tax.
Contracts entered into by Councils on or after 8 July this year that run beyond 1 July next year will become subject to GST after that date. All contracts should be audited as soon as possible to see if changes need to be made.
Similarly, under the clawback provisions of the New Tax System any savings made from the removal of current taxes should be passed on to the consumer. This could accrue to Council from any savings made by its contractors, or Council passing its savings on to ratepayers or its service users.
A question remains as to whether grants from one level of government to another will be subject to GST. These and many other issues need to be cleared up as soon as possible so Councils can prepare for the new system knowing exactly where they will stand.
So the challenges continue and the key, as ever is preparedness.
