Second Reading Speeches

Treasury Laws Amendment (Making Sure Every State and Territory Gets Their Fair Share of GST) Bill 2018

Type
Government
Portfolio
Treasury
Originating house
House of Representatives
Status
Act
Parliament no
45

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Summary

Gives effect to elements of the Government’s interim response to the Productivity Commission’s report

Horizontal Fiscal Equalisation
by amending the:
Commonwealth Grants Commission Act 1973
to require the Treasurer, when framing the annual terms of reference for a Commonwealth Grants Commission (CGC) inquiry into how the goods and services tax (GST) should be distributed among the states and territories, to require the CGC to transition the horizontal fiscal equalisation system from full equalisation (equalised to the strongest state or territory) to reasonable equalisation (equalised to the stronger of New South Wales and Victoria); and
Federal Financial Relations Act 2009
to: introduce a minimum GST revenue sharing relativity that may be determined by the Treasurer for any individual state or territory for a financial year; boost the annual funding pool from which GST revenue grants are made to the states and territories with additional Commonwealth financial assistance each year; and provide a guarantee, by way of additional Commonwealth financial assistance, to each state or territory that would have received a greater overall entitlement under the current distribution system as compared to the updated distribution system during the transition period. Also provides for a review of the operation of the Act by the Productivity Commission by 31 December 2026.