NO.078

The States and Territories (States) will today receive their first payment of GST

revenue, as part of the Government’s important reforms to Commonwealth-State

financial relations.

Under The New Tax System, all GST revenue is paid to the States. This means that

States will have access to a secure revenue base to enable them to fund essential services

such as schools, hospitals, roads and police. They will no longer need to rely on

financial assistance grants from the Commonwealth and some of their own inefficient taxes

which are to be abolished.

At the same time, the Commonwealth has guaranteed that in each of the transitional

years following the introduction of the GST, each State’s budgetary position will be

no worse off than if the Government had not reformed Commonwealth-State financial

relations. To meet this guarantee, a total of $2.65 billion of budget balancing assistance

was forwarded to the States on 4 July 2000.

The States will share an expected $24 billion of GST revenue in 2000-01. The revenue is

to be distributed in accordance with the GST relativities recommended by the Commonwealth

Grants Commission.

Today’s payment of more than $109 million represents GST collected by the

Australian Customs Service on taxable importations.

SYDNEY

27 July 2000

Contact: David Alexander (0418 210 601)