Ms MARTIN - 1999-02-18
The week before the last Territory election, John Howard announced the federal Coalition government would contribute $100m cash from the Federation Fund to our railway project. On 14 November, the former Chief Minister told Territorians that John Howard had confirmed what we expected - that the $300m cash contributions from the Territory, South Australian and federal governments would all be tax free. This morning’s NT News says the Howard government is considering taxing the contribution, thus robbing the project of over $100m or providing the money as a capital grant which is not what was promised - or wanted - by investors. I ask the Chief Minister why there is speculation on this issue? John Howard has already made it clear the $100m cash will be delivered, and the $300m will not be taxed.
ANSWER
Mr Speaker, the speculation is because the mechanism to ensure that the $100m of Commonwealth money - real money - is delivered in real terms. This is the reason for the speculation and there are discussions going on to ensure we come up with the appropriate mechanism. The Minister for the AustralAsia Railway, the Hon Barry Coulter, has an excellent story to tell. I am not sure if he is going to cover that issue in his statement today but I will refer the question to him to clarify the issue.
Mr COULTER: Mr Speaker, it is really quite simple. I was in Adelaide with both the previous Chief Minister and South Australian Premier Olsen when Mr Howard made the Commonwealth pledge of $100m. I never heard him say the word ‘cash’ at any time, but it is the Australian Taxation Office which has decided that the capital grant monies are assessable income and it is their ruling that those monies are therefore taxable. The agreement that had been reached with the member for Port Darwin and the Premier was that we could undertake a $300m capital works program, which would not be taxable. The consortia are being asked to bid on that basis.
I have also been talking to the Treasurer, the Finance Minister, the Prime Minister’s office and the Transport Minister’s office with regard to ‘grossing up’ the grants - that is, they simply pay themselves the tax. That is a matter which is under active consideration at the moment, to ensure that $300m would be available cash-in-hand to consortia if that is their preferred option and those discussions are still taking place. Make no mistake, however, there is a way through this at the moment which says that a $300m capital works program - not taxed - can proceed and that is what consortia are being asked to bid on at present.
ANSWER
Mr Speaker, the speculation is because the mechanism to ensure that the $100m of Commonwealth money - real money - is delivered in real terms. This is the reason for the speculation and there are discussions going on to ensure we come up with the appropriate mechanism. The Minister for the AustralAsia Railway, the Hon Barry Coulter, has an excellent story to tell. I am not sure if he is going to cover that issue in his statement today but I will refer the question to him to clarify the issue.
Mr COULTER: Mr Speaker, it is really quite simple. I was in Adelaide with both the previous Chief Minister and South Australian Premier Olsen when Mr Howard made the Commonwealth pledge of $100m. I never heard him say the word ‘cash’ at any time, but it is the Australian Taxation Office which has decided that the capital grant monies are assessable income and it is their ruling that those monies are therefore taxable. The agreement that had been reached with the member for Port Darwin and the Premier was that we could undertake a $300m capital works program, which would not be taxable. The consortia are being asked to bid on that basis.
I have also been talking to the Treasurer, the Finance Minister, the Prime Minister’s office and the Transport Minister’s office with regard to ‘grossing up’ the grants - that is, they simply pay themselves the tax. That is a matter which is under active consideration at the moment, to ensure that $300m would be available cash-in-hand to consortia if that is their preferred option and those discussions are still taking place. Make no mistake, however, there is a way through this at the moment which says that a $300m capital works program - not taxed - can proceed and that is what consortia are being asked to bid on at present.
Last updated: 09 Aug 2016