Wednesday, 18 December 2013

Is Abbott using the Australian Tax Office as an excuse to extend the range of the Goods & Services Tax?

Excerpts from the House of Representatives Hansard on 5 December 2013:

Mrs ELLIOT (Richmond) (14:04): My question is to the Prime Minister. Given that the Prime Minister said,
'There will be no change to the GST, full stop, end of story', why is the government now considering applying the GST to relocatable home parks—the complete opposite of what the Prime Minister promised?
Mr ABBOTT (Warringah—Prime Minister) (14:05): Our commitments will be kept; but obviously, in the administration of tax law, various things happen, including draft tax office rulings.

Ms RYAN (Lalor—Opposition Whip) (13:45): I am extremely concerned about the Australian tax office's draft ruling to increase the GST on mobile home parks. I am advised that my electorate of Lalor has approximately 620 mobile or demountable homes, with almost 950 permanent residents who will be adversely affected by this ruling.
Earlier this week, I spoke about tenancy eviction and homelessness in my electorate. This draft ruling is another housing pressure that our community cannot afford.
My office has been inundated by local residents from various retirement villages who are concerned about the burden of having to find between $700 and $1,200 extra per year to pay the GST if it is applied and passed on.
One constituent in particular, Bob from Ison village in Wyndham, is very worried about the impact this draft ruling could have on him and others like him, not only financially but also the undue stress it will cause.
I am aware that residents in three Lalor retirement villages are currently preparing petitions to the House on this matter. Mr Abbott promised during the election campaign that there would be no change to the GST, but now he is in government it feels like another promise is going to be broken.
I stand in the House today to oppose the increase in GST on moveable homes and implore the government to keep its promise and remove the worry this draft ruling is currently causing to the people in my electorate of Lalor.

The Australian Tax Office position:

ATO welcomes feedback on draft ruling

Media Release 22 November 2013

There has been some public misinformation about the Australian Taxation Office’s draft ruling on GST for moveable home estates.
Commissioner Chris Jordan today said the ruling was only draft, that no final decision had yet been made and the public was encouraged to set out any concerns in submissions.
“We have not made a final decision about charging GST on moveable home estates,” Mr Jordan said. “We have issued a draft ruling so the community and stakeholders can comment and raise any concerns.
“There has been a bit of public misunderstanding and I just want to make clear that the draft ruling does not apply to caravan parks and won’t come into play retrospectively.
“Submissions close on 20 December and I encourage people to set out any concerns they have.”
Draft ruling Goods and services tax: supplies made by an operator of a 'moveable home estate' (GSTR 2013/D2) was released for consultation on 30 October 2013.
The preliminary view in the draft ruling is that a moveable home estate does not fall within the definition of commercial residential premises. This is because it is not sufficiently similar to a caravan park.
Consequently, under the draft ruling, operators would no longer be able to apply the concessionary treatment in Division 87 of the GST Act to their supplies of long-term accommodation to residents.
Taxpayers do not need to change current approaches until a final ruling is published.
We are continuing to consult with industry stakeholders on this issue and expect a final ruling to issue in mid 2014.
“I am pleased and encouraged that the community knows they can engage with us on these issues,” said Mr Jordan. “We will consider all feedback.”
Feedback can be submitted before 20 December 2013 on (07) 3213 8417 or via email at

Text of Draft Goods & Services Tax Ruling here.

Federal Nationals Member for Cowper, Luke Hartsuyker, alleges that he had made a submission to the Australian Tax Office asking it to withdraw its draft ruling. His fellow National Party MP for Page, Kevin Hogan, does not appear to have anything to say on the subject to date.


The Australian Taxation Office 20 December 2013:

Goods and Services Tax Ruling GSTR 2013/D2 is withdrawn with effect from today.....
The draft Ruling is being withdrawn following consideration of comments received over the course of the consultation period, which contend that moveable home estates are sufficiently similar to caravan parks for the purposes of paragraph (f) of the definition of commercial residential premises in section 195-1 of the GST Act. These comments support the alternative view set out at paragraph 72 of the draft ruling. Similarities to caravan parks include, amongst other things, the leasing of a site separately from a building and shared facilities....

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