Australian Auditor-General Says GST Not State Revenue

by Mary Swire, Tax-News.com, Hong Kong

20 February 2002

Australian Auditor-General Pat Barrett announced on Tuesday that under accepted accounting standards, the GST should be treated as a Commonwealth tax in the Federal Government's accounts.

Currently, the Howard Government regards the GST as state revenue, as despite the fact that it is levied and collected on a federal level, the proceeds from the tax go to the states and territories. However, the opposition Labor Party have long been concerned that by classifying the Goods and Services Tax in such a way, the Government are able to underestimate federal revenue collection figures by a significant account.

In response to questions from Labor's Finance Spokesman, Stephen Conroy, over whether the GST should in fact be regarded as a Commonwealth tax, Pat Barrett commented that: 'We've got legal opinion and certainly accounting opinion [which] would suggest that that is the appropriate treatment,' and confirmed that the Australian Government's treatment of the GST constitutes a breach of Australian Accounting Standard 31.

However, during a Senate Estimates Hearing, Finance Minister Nick Minchin dismissed his opposite number's questioning as politically motivated:

'Senator Conroy seeks to have it regarded as a Commonwealth tax so that the total Commonwealth taxation appears to be a higher amount of GDP than in reality it is,' he protested. 'Therefore he can go on arguing that we're the highest taxing government, a quite inappropriate and unsustainable proposition.'

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