Legislative Council, Wednesday 31 May 2023

Ms FORREST question to LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Mrs HISCUTT

I refer to the mooted $60 million Cradle Mountain cableway that was to be funded 50 per cent by the Tasmanian Government and 50 per cent by a Federal grant from the Community Development Grants program.

1. Would the grant, if received, have been included as a specific purpose grant by the Commonwealth Grants Commission when calculating the State’s share of the GST pool;

2. Did the State seek or receive any advice from the Federal government as to how the grant would be treated for GST purposes; and
a) If received, what was that advice; and

3. Has the State received other Federal funds as Community Development grants; and
a) If so how were they treated for GST purposes?

ANSWER:

Under the Terms of Reference for the Annual Update of the GST distribution for a particular year, the Commonwealth Grants Commission (CGC) is required to take account of payments for specific purposes. The CGC does not make assessments regarding Commonwealth payments until the year in which the funding occurs.

Treasury is not able to pre-determine how the CGC makes its assessments. However, generally payments which support state services, and for which expenditure needs are assessed, will have an impact on the relativities.

Tasmania has received a number of grants under the former Australian Government’s Community Development Grants (CDG) Program.

It is not possible to provide a definitive response on how the CGC would assess grants provided under the CDG Program. The CGC’s assessment of whether a payment will impact state GST relativities depends on the purpose for which the funding was provided and whether it supports a state service. The impact of Commonwealth payments on Tasmania’s GST distribution also depends on the amount of funding received relative to other states and territories, including the extent to which funding is above or below the State’s equal per capita (EPC) share.