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Revenue measures to Support Core Services

Thu 17 May 2012

Lara Giddings

Premier

The Premier, Lara Giddings, said the State Government had made the difficult decision to raise some fees and charges in order to maintain core services.

These measures will apply from 1 October and will raise an additional $28.7 million in 2012-13, and $39.4 million in a full year in 2013-14.
 
According to Commonwealth Grants Commission, Tasmania's overall taxation severity is currently the second lowest of all the States and Territories, and these changes are not expected to materially alter this position.
 
Ms Giddings said while significant savings had been found across Government departments, the continued downturn in GST and own-source revenue had made a period of net debt unavoidable.
 
"This year we have made the decision to quarantine health and education and public safety from the further cuts required of other Departments but in doing so we have had to take the difficult decision to raise revenue through other means.
 
"Regrettably, we are asking Tasmanians to shoulder a modest increase in some fees and charges in order to sustain the services they rightfully value the most."
 
Ms Giddings said taxes would be raised in four areas where Tasmania's rates and thresholds are already well below other States and Territories.
 
The taxation changes will apply to:
 
-        Conveyance Duty - which will rise to a new top marginal rate of 4.5 per cent for properties valued at above $725 000, still well below the average top marginal rate across other States of 5.5 per cent;
 
-        Insurance Duty - where the rate charged on contracts of general insurance will rise from 8 per cent to 10 per cent of the premium paid, in line with the situation in most other States;
 
-        Duty on Motor Accident Insurance Board premiums - which will increase from $6 per registration to $20 per registration, the first increase for a number of years; and
 
-        Motor Tax - which is currently second lowest of all the States and Territories, and will remain competitive despite a 20 per cent rise for light vehicles.
 
"We have also consciously avoided areas that would act as a disincentive to the creation of new jobs," Ms Giddings said.
 
"It is anticipated that the overall impact of these measures on individual Tasmanians will be manageable.
 
"For example a family with a $180 a month insurance policy on home, contents and two cars will pay an extra $3.30 a month in insurance costs.
 
"The changes to motor tax will add $24.50 to the annual registration of a four cylinder car and adjustments to conveyance duty will add around $385 to the cost of buying the average home, valued at $360,000."


Revenue measures to Support Core Services