Despite a possible increase in Tasmania‘s gambling tax rates, the state will not see a change in their Goods and Service Tax (GST) outcome.
Damien Febey, a Department of Treasury and Finance intergovernmental and financial policy branch assistant director, revealed this while answering a question from Murchison Independent MLC, Ruth Forrest, at a hearing in August
Forrest, the chairperson of the Legislative Council select committee, was conducting an inquiry into the Commonwealth GST distribution system’s impact on Tasmanian service delivery and expenses. The inquiry is being conducted, in part, through a comparison of actual and estimated expenses per capita in the state with the national average.
All income is equal
Tasmania currently receives 3.7% of the national GST pool. This will remain unchanged even if the state sees an increase in revenue due to higher gambling taxes. Febey advised that the state’s GST outcome would not be affected, as the income would be treated equally.
Earlier this year, the state government announced that it would introduce as much as a 15% point-of-consumption (POC) tax on net wagering revenue generated within Tasmania. The new tax is set to come into effect on 1 January 2020.
This will put the state in line with South and Western Australia, as well as Queensland and ACT, which also charge a 15% POC gambling tax. Victoria and New South Wales charge a lower POC tax at 10% and 8% respectively. The Northern Territory stands alone as the only state yet to implement a similar tax.
This tax category, which first made an appearance in Australia in 2017, has not been universally accepted.
In a letter to South Australian officials, The Australian Trainers’ Association, as well as Thoroughbred Racing SA, blasted the 15% tax rate, describing it as disadvantageous. They explained that the rate put their operations in jeopardy, due to bookmakers encouraging real money gamblers to bet in states with lower POC rates.
Quarantined Grants Questioned
In addition to the Tasmanian portion of the GST outcomes, Forrest questioned why certain Commonwealth Grants were quarantined. Forrest mentioned the example of the funds granted to the Royal Hobart Hospital for a rebuilding project, pointing out that the grant had been not been subject to GST.
Economic and financial policy deputy secretary Fiona Calvert responded, saying that any quarantined payments had been negotiated with the federal treasury. She added that the treasurer would prefer payments not to be quarantined as they would prefer to dissuade similar requests from other states.
