Push for pipeline cash State Government challenged to fix GST issues
IF the State Government can fund Brisbane’s $5.4 billion Cross River Rail project, it can overcome the GST implications of having federal money spent securing Townsville’s future water supplies, businessman Adrian Gabrielli says.
Mr Gabrielli, who operates one of the city’s biggest construction firms, was commenting on delays by the State Government in signing a project agreement with the Federal Government over construction of stage two of the Haughton pipeline project.
The state has just spent as much as $200 million funding development of Haughton stage one and now is baulking at having the Federal Government’s funding released to complete stage two.
According to the office of Treasurer Cameron Dick, the Federal Government “must exempt this Project Agreement from GST calculations” because it “could cost Queenslanders $156 million in GST shortfall”.
It is understood the shortfall arises because the federal money could be counted as state revenue,
GST allocation.
Budget papers show the Federal Government allocated $260 million over five years from 2019-20 to the Haughton project and the Townsville Port channel upgrade in April last year.
The channel upgrade is proceeding but not Haughton stage two.
A State Government spokeswoman said ports were not included in the Commonwealth Grants Commission’s GST assessment and so federal payments for this project reducing its would not impact land’s GST share.
Mr Gabrielli said, while the state’s potential GST impact was not a “small figure”, Townsville’s economic recovery and ability to source water should be the priority.
He said the state could pull a Cross River Rail project “out of a bag” but couldn’t seem to assure stage two of the Haughton pipeline.
“They seem to be prioritising the southeast corner. Maybe they need to think about that,” Mr Gabrielli said.
Townsville Chamber of
Queens
Commerce president Michele Falconieri said that the Haughton project should proceed to activate the economy and provide jobs, while businessman Carey Ramm said politicians were losing sight of the outcome, which was ultimately water security for Townsville.
The State Government is funding Brisbane’s Cross River Rail itself – reportedly the largest infrastructure project in the state’s history – after the Coalition did not provide any contribution in last year’s federal budget.