Calls for end to contributions tax
The City of Greater Bendigo will ask the Municipal Association of Victoria (MAV) to make a submission to the Federal Government’s tax review calling for the removal of contributions tax on Defined Benefits Superannuation shortfalls.
In July 2013, Council, along with other local authorities, was required to fund a shortfall in Defined Benefits Superannuation of $10.3 million, which included $1.546 million of contributions tax payable to the Federal Government.
Local authorities in Victoria were collectively required to contribute $533 million, of which $79.94 million was contributions tax.
Mayor Cr Barry Lyons said the tax burden should be lifted and that the $1.546 million paid as the tax on super shortfalls by Council would be better spent on providing infrastructure and services for the Greater Bendigo community.
“The Federal Government has indicated its intention to undertake a review of taxation and Council believes that this provides a significant opportunity to draw attention to taxation impacts on local government.
“The MAV State Council on October 24 provides an important vehicle to raise the issue and seek sector wide support for the MAV to make a comprehensive submission to the review.”
Cr Lyons said the Council would also seek MAV State Council support for increased access to Financial Assistance Grants.
“Councils are recipients of Financial Assistance Grants from the Federal Government, which have increased by CPI annually.
“These are significant untied grants which councils rely upon for their day-to-day operations.
“As the last Federal Budget, the Government announced that the grants would not be indexed for the next three years, which effectively reduces the real value of the grant.
“In our case, this amounts to approximately $1.8 million less funding.”