Page 1587 - Week 08 - Thursday, 28 September 1989
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restore the tax base. Over the years employers have changed their methods of payment to employees by providing an increasing proportion of the employees' income as benefits. This problem has been recognised and countered by the Federal Government through the introduction of the Fringe Benefits Tax Assessment Act 1986. To ensure that such payments are included in the payroll tax base, the definition of "wages" within the Payroll Tax Act will be expanded to include benefits which will be assessed along the lines consistent with the Fringe Benefit Tax Assessment Act.
In order to avoid or reduce payroll tax, schemes have been developed over recent years which attempt to sever the existence of an employer-employee relationship through the use of artificial contract arrangements. The proposed amendments will counter such avoidance schemes by deeming that all contracts of service will attract payroll tax liability. Truly independent contractors, however, need not fear these amendments as exemption provisions are also included in the amendments to protect such contractors. The proposed legislation will bring the ACT into line with New South Wales and Victoria in the treatment of these avoidance schemes.
The payroll tax liability of persons hired out by employment agents is often difficult to establish. The proposed amendments will clarify this by deeming the agent as the employer. The proposed amendments will not affect the situation where the agent fulfils purely a job finder role. The problems I have outlined are Australia-wide and have been tackled by a majority of States and the Northern Territory. The proposed amendments have been developed after a close study of the relevant State legislation and will not only reverse the current erosion of the tax base, but will bring ACT anti-avoidance legislation substantially into line with the States and the Northern Territory. I now present the explanatory memorandum to the Bill.
Debate (on motion by Mr Collaery) adjourned.
TRUSTEE COMPANIES (AMENDMENT) BILL 1989
MS FOLLETT (Attorney-General) (10.39): I present the Trustee Companies (Amendment) Bill 1989. I move:
That this Bill be agreed to in principle.
The Trustee Companies Act 1947 regulates the operation of trustee companies in the Australian Capital Territory. Trustee companies provide a range of services, including the management and administration of deceased estates. The Bill contains amendments which will, firstly, extend the circumstances under which a trustee company may be authorised to act jointly with an executor of a will, or jointly with a person entitled to obtain administration of an estate.
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