Territory Stories

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

Details:

Title

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

Other title

Tabled paper 965

Collection

Tabled Papers for 8th Assembly 1997 - 2001; Tabled Papers; ParliamentNT

Date

1999-02-16

Description

Tabled by Sydney Stirling

Notes

Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.

Language

English

Subject

Tabled papers

File type

application/pdf

Use

Copyright

Copyright owner

See publication

License

https://www.legislation.gov.au/Series/C1968A00063

Parent handle

https://hdl.handle.net/10070/295731

Citation address

https://hdl.handle.net/10070/394614

Page content

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 The GST will have a mix of effects on the cost of private motor vehicles. As highlighted by Stanley (1998), in the case of new cars, prices will fall as the existing 22 per cent wholesale sales tax is replaced by the 10 per cent GST rate. This is estimated to lower new car prices by 8.3 per cent. It can be expected that the prices of used-cars will also fall. However, the Government will now tax the service component of used-car prices when sold by dealers, and maintenance service costs will also be subject to GST. Having regard to all these factors and the reality that many of the motor vehicles in the communities need constant maintenance, the costs of buying and maintaining private vehicles may well increase. For the purposes of this study, we have used the Government study estimate of the effect of the tax package in increasing transport and storage costs of 1.6 per cent. Taking the share of communities household budgets spent on transport, together with the Governments estimate of the effect of the GST on transport and storage costs, results in a cost of living increase of 0.10 per cent. 4.2.6 Fuel and Power The survey shows that rural and remote Indigenous communities are spending about 5 per cent of household budgets on fuel and power. The Governments study on the impact of tax reform on consumer prices found that the tax reform package increases the consumer prices o f electricity, gas and water by 5.2 per cent. Taking the share of communities household budgets spent on fuel and power, together with the Governments estimate of the effect of the GST in increasing electricity, gas and water prices, results in the communities cost o f living increasing by 0.26 per cent as a result of the impact of the tax package on fuel and power. 4.2.7 Alcoholic Beverages and Tobacco The survey shows that on average rural and remote Indigenous communities are spending 20 per cent of their household budgets on alcoholic beverages and tobacco which makes it the second most important expenditure item in their budgets behind food. Both alcoholic beverages and tobacco are subject to high rates of excise tax for reasons to do with public health policy and revenue raising. In the case o f alcoholic beverages, there will be adjustments in the excise depending on the nature of the alcoholic beverage concerned. For example, the change in the excise on full strength beer will be limited so that the retail price of a carton of full strength beer will only increase by the estimated general price increase associated with indirect tax reform. In the case of tobacco the Government has decided to apply the excise on a per stick basis. After the introduction o f the per stick excise and the application of GST? premium branded 25s will be expected to rise by 6.5 per cent. T h e /Mien C o n su l t in g < in>ii)> 14


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