Impact of the Governments Plan for a New Tax System on Rural and Remote Indigenous Communities Report Prepared by ATSIC January 1999 The Allen Consulting Group
Tabled paper 965
Tabled Papers for 8th Assembly 1997 - 2001; Tabled Papers; ParliamentNT
Tabled by Sydney Stirling
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I m p a c t o f a N e w T a x S y s t e m o n R u r a l a n d R e m o t e I n d i g e n o u s C o m m u n i t i e s 4. Impact of the Governments Tax Package on Rural and Remote Area Indigenous Communities 4.1 General Approach In order to produce quantitative estimates of the impact of the Governments tax package on rural and remote area Indigenous communities, we have relied on expenditure data obtained by the survey commissioned by ATSIC as part of this study. We have sought as far as possible to corroborate these findings with other available evidence presented by other analysts who have considered this issue and by discussing our findings with experts in the field. We have relied upon the estimates of the impact of tax reform on industry costs and consumer prices presented in the Governments August 1998 publication, Tax Reform, not a new tax, a new tax system: The Howard Governments Plan fo r a New Tax System. While there has been a good deal of questioning of the Treasury estimate that the effect of tax reform on the CPI will lead in the second year to an increase in the CPI of only 1.9 per cent, we have not sought to enter into this debate, but rather have worked on the basis set out in the Governments own report. We recognise that this is almost certainly a conservative estimate, particularly in respect to its impact on food and other essential items, and so consider the implications o f diversions from these estimates in more detail in Section 4.2.9 below. 4.2 Cost of Living Impact 4.2.1 Total Impact o f the Tax Package on Communities Cost o f Living Adding up the contributions to the cost of living increases to rural and remote Indigenous communities from each of the elements of Indigenous household expenditure, results in an increase in the cost o f living o f 3.7 per cent almost double the increase in the cost o f living the Government has estimated to flow from the tax package for the non-Indigenous community (see Table 2). T h e A llen C o n s u l t i n g ( i i 'oup 10
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