Today I am announcing that the Government will provide an income tax

exemption for local government businesses which become companies.

The exemption will encourage local government businesses to become companies

and thereby improve their efficiency and product and service delivery.

At present, local government businesses are not separate from local governments

themselves and therefore come within the general local government income

tax exemption.

The new exemption is consistent with National Competition Policy and

will apply from 1 July 2000. The necessary legislation will

be introduced into the Parliament as soon as is practicable.

CANBERRA

19 June 2000

Contact: Geoff Clark (Treasury)

02 6263 2912