Tasmania’s Goods and Service Tax (GST) outcome will not be affected by a possible increase in the state’s gambling tax rates. This is according to Damien Febey, a Department of Treasury and Finance intergovernmental and financial policy branch assistant director.
Febey was responding to a question from Murchison Independent MLC Ruth Forrest at hearing in August. Forrest is chairperson of the Legislative Council select committee tasked with an inquiry into the Commonwealth GST distribution system’s impact on Tasmanian service delivery and expenses. This is being done partly through a comparison of actual and estimated expenses per capita in the state, with the national average.
Income Treated Equally
The state currently receives 3.7% of the national GST pool. This is set to remain unchanged even if the state sees an increase in revenue due to higher gambling taxes. According to Febey, the state’s GST outcome would not be affected, as the income would be treated equally.
Earlier this year, it was announced that the state government would introduce as much as a 15% point-of-consumption (POC) tax on net wagering revenue generated within Tasmania. The new tax will come into effect on 1 January 2020. The state will join South and Western Australia, as well as Queensland and ACT, which also charge a 15% POC gambling tax. Victoria and New South Wales charge 10% and 8% POC tax, respectively. The Northern Territory is the only state yet to introduce such a tax.
The first such tax was introduced in South Australia in 2017. However, the Australian Trainers’ Association, as well as Thoroughbred Racing SA, have criticised the 15% rate. In a letter to South Australian officials, the association described the rate as a disadvantage. Furthermore, it said that bookmakers were encouraging gamblers to bet in states with lower POC rates.
Quarantined Grants Questioned
The Tasmanian portion of the GST outcomes was not the only thing Forrest questioned. The chairperson also wanted to know why certain Commonwealth Grants were quarantined.
Forrest mentioned the example of the funds granted to the Royal Hobart Hospital for a rebuilding project. She said the grant had been not been subject to GST.
Responding to the chairperson’s question, economic and financial policy deputy secretary Fiona Calvert said that any quarantined payments had been negotiated with the federal treasury. However, she added that the treasurer would prefer payments not to be quarantined, so as to not encourage similar requests from other states.