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Could easily take GST of council rates

Media release 30 April 2008

If Government won’t take GST off food –they could easily take GST of council rates.

Could be done by a stroke of a pen.

Government and opposition both say that removing GST from food would be too costly in terms of administration and a significant loss of revenue.

The same argument cannot be applied to effectively removing GST from council rates.

This can be done by applying a GST zero-rating to all council rates.

This would give residential ratepayers an immediate 11% reduction in rates which would equal more than $4 a week to a $2,000 annual rates bill comprising local, regional and water rates.

For superannuitants, and others on low or fixed incomes, even a $4 a week reduction would be a welcome relief.

And research carried out last year showed that revenue lost to government would be less than $200 million – peanuts for a government running a multi billion dollar surplus.

There are already a number of items which are zero-rated including internet sales overseas, financial services, exported goods and services and sales of businesses. But council rates, which the courts have declared to be a tax, still carry the additional tax of GST.

Within the next two months councils will be finalising their rate demands for the new financial year and increases ranging from 5% to 26% for some residents will be confirmed.

The 11% savings by effectively removing GST will go some way to alleviating the pain of these rates increases.

And it could be done by a stroke of Dr Cullen’s pen.


© Scoop Media

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