Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

asked the Minister representing the Treasurer, upon notice, on 10 March 2011:

With reference to changes to the GST treatment of residential premises:

(1) What is the policy intention of the proposed measure.

(2) How does the proposed measure enable the policy intention to be achieved.

(3) Is the effect of the proposed measure revenue neutral:

(a) if so, how has revenue neutrality been achieved;

(b) have other saving measures been needed to achieve revenue neutrality;

(c) if not, how much revenue is expected to be raised as a result of the measure; and

(d) can the annual numbers for the forward estimates period be provided, and any further information covering the longer term.

(4) Have the likely administrative and compliance costs of implementing the proposed measure been assessed; if so, what are they.

(5) (a) What stakeholders will be directly affected by the measure;

(b) have these stakeholders been involved in consultation prior to and during the development of the measure;

(c) what consultation has the Government been engaged in; and

(d) have independent bodies or experts been involved in the consultation process.

(6) Is this proposed measure a government response to an identified problem; if so, what problem is it addressing.

(7) Were any alternatives considered before this approach was proposed, if so:

(a) can details of those alternatives be provided; and

(b) why was it decided that those options would not be implemented.

(8) Will inaction pose a risk to the integrity of the tax system or broader government administration; if so, how would you rate that risk.

(9) What modelling has been carried out in developing the proposed measure.

(10) Have the broader implications of the implementation of the measure on the economy been forecast; if so, what are they.

(11) Have international comparisons been considered and does the proposed measure accord with international 'best practice'.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to 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.