New tax legislation to be introduced by the Federal Treasury in the June Parliamentary sittings could sound the death knell for future public/private partnerships.
“This would force councils to raise rates by up to 5.2 per cent, costing Queensland ratepayers $11 million,” said Local Government Association of Queensland President, Councillor Paul Bell. “We’re concerned about the impact of the implementation of changes to the New Business Tax System (Tax Preferred Entities – Asset Financing) Bill 2003 (Division 250) by which the Australian Tax Office (ATO) aims to reject waste, water and sewerage contractors’ depreciation claims, reduction of capital write offs and other costs which are tax deductible under current legislation,” Councillor Bell said.
“If the legislation proceeds councils will either need to reimburse contractors for their unclaimable outgoings or look at the feasibility of carrying out the services themselves. Either way, rate increases will be inevitable. There’s been a notable absence of thorough consultation with councils on this issue from Federal Treasury and the Tax Office.
“There appears to have been no thought given to the impact on contractors and councils alike, just an unseemly grab for funds by the ATO. If this gets through, it will be the thin edge of the wedge, with the Tax Office taking councils for easy victims. Councils are angry now and the ATO hasn’t begun to hear the screams from the contractors. State Treasurer, Terry Mackenroth, told me the State Government would find itself in a similar position with its contractors as councils if the legislation proceeded as the ATO wants it.”
Councillor Bell has called on the Federal Government to ensure the scope of the bill excludes Local Governments.
