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 Income tax reductions, especially for persons earning incomes between $30,000 and $50,000 per annum. Increased assistance to families through the income tax system. The First Home Owners Scheme. Increases in pensions and benefits of 4 per cent. Because of the nature and level of the income received by rural and remote Indigenous communities, the income tax reductions are unlikely to be o f significant benefit to them. The same is true of the increased assistance to families through the income system and the First Home Owners Scheme. The main element of the Governments compensation package which will be relevant to rural and remote Indigenous communities are increased social security payments and increased payments under the CDEP Scheme as they account for the great bulk of income received the by communities.' As indicated in the Governments tax report: Social security recipients and lower income groups will be provided with extra assistance to ensure that they are more than just protected from the impact of tax reform on prices. In practice, consistent with this commitment, the Government has decided that: ...pensions and benefits will be increased by 4 per cent when the GST commences, and the Government will ensure that over time this increase remains at 1.5 per cent above the actual Consumer Price Index (CPI) impact. The Governments decision to increase pensions and benefits by 4 per cent is designed to over-compensate social security recipients and lower income groups for the 1.9 per cent price effects of the tax package. However, as this report has demonstrated, the cost of living increase for rural and remote Indigenous communities associated with the tax package is, on arguably conservative assumptions, almost twice as high (3.7 per cent) as that estimated by the Government for the community as a whole. If, as shown in 4.2.9 above, the price increase for food for rural and remote Indigenous communities was 25 per cent greater than that for the non-Indigenous community, the cost of living increase for rural and remote Indigenous communities would be well over twice as high (4.17 per cent) as that estimated by the Government. The upshot of this situation is that unless other action is taken, rural and remote Indigenous communities will be significantly worse-ofT if the compensation package is applied to them in its current form. Tin! Allen Consulling < Ii-unp 17


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