Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

The Treasurer has provided the following answer to the honourable senator's question:

(1) The policy intention of the proposed measure is to ensure that GST is captured on the value added to real property by developers constructing new residential premises.

(2) The Government has undertaken public consultation on the design of a legislative amendment to give effect to the policy intention. Details are available in a Discussion Paper, located at:

http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=1920.

(3) The proposal has financial implications in relation to GST revenue. However, the full impact on GST collections is offset by corresponding changes to GST payments to the States. The financial implications of the proposed measure were reported in the 2011-12 Budget.

(4) The administrative and compliance costs of implementing the proposed measure are expected to be low and because of this, no Regulation Impact Statement is required.

(5) (a) Stakeholders directly affected by the measure are property developers and tax professionals providing advice to these entities.

(b) Stakeholders have been involved in consultation following announcement of the measure.

(c) Public consultation on a discussion paper of the proposed measure was held between 27 January 2011 and 25 February 2011.

(d) Yes.

(6) The proposed measure is a government response to a recent court decision (Commissioner of Taxation v Gloxinia Investments (Trustee) [2010] FCAFC 46) which found that the sale of certain residential premises to owner-occupiers and investors was input taxed rather than taxable. The court decision is contrary to the policy intent in relation to the taxation of residential premises as it results in GST not being collected on the full value added to premises by developers in some circumstances.

(7) The discussion paper outlines two alternative means of implementing the Government's policy announcement. The final design of the legislative amendment has not yet been finalised. Further consultation will be undertaken on exposure draft legislation.

(8) The proposed measure has been announced with a retrospective start date to reduce risks to revenue that might arise from behavioural change.

(9) The proposed measure has been costed in accordance with normal Treasury estimation processes.

(10) No.

(11) No international comparisons have been considered.