Peter Costello

Media Releases

$20 Million for Clubs in New South Wales

NO.015

$20 MILLION FOR CLUBS IN NEW SOUTH WALES

All registered clubs in New South Wales will be guaranteed to receive the gaming rebate which was earlier denied by the NSW government. The New South Wales government will be compensated for the amount under its Guaranteed Minimum Amount (GMA) from the Commonwealth.

Following the introduction of the GST the States and Territories were required to adjust their gambling tax arrangements to take account of the impact of the GST on gambling operators. All States gave effect to this by reducing their gambling taxation rates by 9.09 per cent. In New South Wales, registered clubs’ first $100,000 of gambling profits were taxed at zero per cent before the GST was introduced, while clubs’ gambling profits between $100,001 and $200,000 were taxed at one per cent. As these particular rates could not be reduced by the required 9.09 per cent, the New South Wales government agreed to pay clubs an up front rebate to compensate clubs for the period of 2000-01 to 2003-04 to ensure that the policy intent of no increases in taxes on gambling was achieved.

The Commonwealth Government agreed to guarantee the rebate to the New South Wales government.

The New South Wales government threatened not to continue the rebate last year. Following pressure from clubs and the public, the New South Wales government announced it would pay a rebate from 2004-05, but chose to confine the rebate to clubs with an annual gaming income of up to $1 million.

Subsequently, after further pressure, the New South Wales Government decided to extend the rebate to all registered clubs from 2004-05.

Since the New South Wales Government has now decided to pay the rebate to all registered clubs, without a qualifying cap of $1 million in annual gaming income, the Commonwealth Government accordingly agrees to include the cost of the full rebate in New South Wales’ GMA in 2004 05 and subsequent years. This will ensure that New South Wales is not worse-off as a result of paying the rebate.

The Commonwealth Government’s commitment to include the cost of the full rebate in New South Wales’ GMA will cost the Commonwealth Government an estimated $20 million per annum until New South Wales comes off Budget Balancing Assistance (BBA). On the basis of estimates released in the Mid Year Economic and Fiscal Outlook 2003-04, New South Wales will come off BBA in 2006 07.

CANBERRA
25 March 2004

Contact:
David Alexander
02 6277 7340

25 Mar 2004

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