Mr BALCH - 1998-08-19
Has the Coalition’s tax reform package been examined for any likely effect on the Alice Springs to Darwin railway project, and is any such effect considered beneficial or detrimental?
ANSWER
Madam Speaker, it is estimated that the overall cost of construction of the railway will fall by approximately $40m. Diesel fuel for earthmoving and track-laying plant makes up about 8% of the overall construction cost. With the elimination of the diesel fuel excise, that cost will be halved. Some plant and equipment is likely to cost significantly less, given the elimination of the wholesale sales tax. Furthermore, the cost of transporting supplies in construction will fall by about 4% if carried by rail and 6.7% if carried by road. These savings will be offset by an increase in the cost of materials such as steel and cement. The steel could cost up to $15m more. Overall, the GST may be beneficial to the cost of construction, although any benefit will be modest.
The Commonwealth government estimates that operational costs will fall by 4% under the package. That relates directly to the fall in diesel fuel costs to run the 4000 hp locomotives. It is generally thought that the GST is not likely to have any other impact on rail operational costs because any tax payable will be passed on to the final consumer. GST which may be payable on rail imput costs is likely to give rise to tax credits which will be offset against GST payable on rail services.
In addition to the cost consideration, the overall package is expected to have a positive impact on exports. The elimination of wholesale sales tax will make Australian goods more competitive internationally. This, together with the domestic transport sector becoming more competitive relative to international transport, will enhance the land-bridging trade along the railway corridor.
As the Chief Minister has suggested to the opposition, people should take their time with this package. They should look at it and do what Gareth Evans has done: after a couple of weeks, ask for a briefing from Treasury. Gareth Evans, in spite of his arrogance - I have suffered, sitting across the table when he has been at his worst after an asthma attack - can humble himself to go to Treasury after a week of slamming this thing, to ensure that the figures are right and to have a proper look at the proposal. Why is the opposition in all its glory - not being as arrogant as Mr Evans - not doing the same? Why not do what he has done?
I seriously caution opposition members against shooting from the lip without knowing what they are talking about. I suggest they avail themselves of briefings which will enable them to understand the package and the GST. They will look stupid if their boss in Canberra comes up with something very similar. They will find themselves in the same trouble they get into on every major issue - as they have on statehood today - because each of them has a different opinion. The Leader of the Opposition is saying one thing, the Deputy Leader of the Opposition is saying another and the Labor Senator for the Northern Territory is saying a third.
ANSWER
Madam Speaker, it is estimated that the overall cost of construction of the railway will fall by approximately $40m. Diesel fuel for earthmoving and track-laying plant makes up about 8% of the overall construction cost. With the elimination of the diesel fuel excise, that cost will be halved. Some plant and equipment is likely to cost significantly less, given the elimination of the wholesale sales tax. Furthermore, the cost of transporting supplies in construction will fall by about 4% if carried by rail and 6.7% if carried by road. These savings will be offset by an increase in the cost of materials such as steel and cement. The steel could cost up to $15m more. Overall, the GST may be beneficial to the cost of construction, although any benefit will be modest.
The Commonwealth government estimates that operational costs will fall by 4% under the package. That relates directly to the fall in diesel fuel costs to run the 4000 hp locomotives. It is generally thought that the GST is not likely to have any other impact on rail operational costs because any tax payable will be passed on to the final consumer. GST which may be payable on rail imput costs is likely to give rise to tax credits which will be offset against GST payable on rail services.
In addition to the cost consideration, the overall package is expected to have a positive impact on exports. The elimination of wholesale sales tax will make Australian goods more competitive internationally. This, together with the domestic transport sector becoming more competitive relative to international transport, will enhance the land-bridging trade along the railway corridor.
As the Chief Minister has suggested to the opposition, people should take their time with this package. They should look at it and do what Gareth Evans has done: after a couple of weeks, ask for a briefing from Treasury. Gareth Evans, in spite of his arrogance - I have suffered, sitting across the table when he has been at his worst after an asthma attack - can humble himself to go to Treasury after a week of slamming this thing, to ensure that the figures are right and to have a proper look at the proposal. Why is the opposition in all its glory - not being as arrogant as Mr Evans - not doing the same? Why not do what he has done?
I seriously caution opposition members against shooting from the lip without knowing what they are talking about. I suggest they avail themselves of briefings which will enable them to understand the package and the GST. They will look stupid if their boss in Canberra comes up with something very similar. They will find themselves in the same trouble they get into on every major issue - as they have on statehood today - because each of them has a different opinion. The Leader of the Opposition is saying one thing, the Deputy Leader of the Opposition is saying another and the Labor Senator for the Northern Territory is saying a third.
Last updated: 09 Aug 2016