Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

Claims that this important budget measure is linked to the government closing off a loophole in the GST law are incorrect and misleading. The government is fixing a loophole in the law that allows businesses to get GST refunds they do not deserve. This loophole was revealed by the Federal Court decision in KAP Motors that allowed motor dealers to have a GST refund without passing it on to consumers. To avoid disadvantaging these taxpayers, who the court decided were entitled to a refund, we changed it to ‘going forwards’. As the opposition should know, all GST revenue is paid to the states and territories. Therefore, the Federal Court decision has not had impact on the Commonwealth budget.