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 1. Focus of the Report The central focus of this report is upon the impact of the Governments plan for a new tax system and, in particular, the GST and the associated compensation package on rural and remote Indigenous communities. These communities have characteristics in terms of their level and sources o f incomes and patterns of consumption which differ markedly from those o f the community in general. Rural and remote Indigenous communities tend to be characterised by relatively low levels of income that are largely derived from social security payments and Community Development Employment Projects scheme payments. In some cases additional income is generated through sales of arts and artefacts and participation in tourism activities. As well as having relatively low levels of income, rural and remote Indigenous communities have patterns of expenditure which differ markedly from those of the Australian community in general. In particular, expenditure on food and non-alcoholic beverages accounts for a very high proportion o f expenditure, even relative to the 24 per cent expenditure share on food for the lowest quintile by household incomes of the Australian community. Education and health services are essentially provided by the Government. Housing is provided through Community Housing bodies with households paying non-market determined rents. Savings tend to be low. One of the central principles of the Governments tax package as spelt out in the five principles of taxation reform announced by the Prime Minister on 13 August 1997, is: that there should be appropriate compensation for those deserving of special consideration. While a compensation package has been included as an integral element of the taxation package, the issue is whether it adequately provides for the special circumstances faced by rural and remote Indigenous communities. Major elements of this report address the following issues: 1. The special nature of the level and composition of income received by people in rural and remote Indigenous communities and their pattern o f expenditure. 2. The impact of the Governments tax package, including the GST, on the cost of living of rural and remote Indigenous communities. 3. The shortfall in the compensation package designed to ensure people are not made worse off by the tax package. 4. Proposals for changes in the compensation package to ensure that rural and remote Indigenous communities are not disadvantaged by the Governments tax reform package. T in : A l ien C o n s u l t i n g < in n ip 2
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