NO.033

TAXES IN SIX STATES AND TERRITORIES TO BE ABOLISHED

Taxpayers in six States and Territories will pay less tax when taxes such

as stamp duty on mortgages, leases, and credit and rental arrangements are abolished

under the Intergovernmental Agreement (IGA) between the Commonwealth and the

States signed in 1999.

When the GST was introduced it was introduced to replace nine State and Territory

taxes. This goal is now in sight for six of the States and Territories.

Given the massive windfall that all States and Territories are benefiting from

under GST it is clear that all the States and Territories are now in a position

to honour their Agreement to abolish other taxes.

The proposal today by six States and Territories provides a timeline for the

abolition of several stamp duties worth $4.4 billion over six years.

The two highest taxing States, New South Wales and Western Australia, maintain

their intention to keep State stamp duties and take the GST as well.

This means that consumers and businesses in those States will face double taxation.

Businesses in New South Wales and Western Australia are now at a competitive

disadvantage. Consumers in New South Wales and Western Australia will be paying

higher prices and higher tax than the rest of Australia until such time as these

States match the rest of Australia by abolishing other taxes in return for the

GST.

The Commonwealth welcomes the announcement of Victoria, Queensland, South Australia,

Tasmania, Australian Capital Territory and the Northern Territory and will engage

on the remaining issues comprised in their offer put to the Commonwealth today.

MELBOURNE

20 April 2005

Contact: David Alexander

02 6277 7340