Page 2047 - Week 10 - Wednesday, 25 October 1989
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So much for the Government's high moral position. It has been the Treasurer's intention all along to introduce this measure. It must have been known that she intended to do so when she developed the first budget five months ago, purely as a revenue gain, knowing fully that her budget lacks substance and offers no real, long-term, productive programs for the ACT which in the course of good government would generate a higher revenue base for the future. A higher revenue base is absolutely essential to maintain an acceptable level of delivery of government services to our community in the future.
Let us be clear; this Bill goes much further than to addressing any erosion of the payroll tax base. It quite positively expands that base by redefining payroll on which this tax is to be levied in the future - an expansion in definition which business and particularly small business will find exceedingly oppressive.
I understand that the Government consulted the Law Society and the Institute of Chartered Accountants on this Bill, and as far as the technical aspects of the Bill go it would certainly be appropriate. However, the Government did not seek extensive consultations with appropriate major employers, despite their protestations yesterday. The Confederation of ACT Industry, CARD, the Master Builders Construction and Housing Association and the Business Owners and Managers Association were simply not consulted, despite the Government's argument. They had no idea, until I brought it to their attention within the last few days, how wide-ranging these changes were and the impact that they would have on their businesses. Apparently, some were told in an offhand way that there would be a Bill to tighten up some loopholes, but that was the extent of the consultation. So much for the much-vaunted consultation promises of this Government.
The legislation, Mr Speaker, proposes to widen the tax burden considerably by the following mechanism: firstly, it extends the payroll tax base to include payments made to employees that are currently excluded; they include, for example, payments such as the payout of furlough on the termination of employment. Secondly, it includes a wider range of benefits as wages for payroll tax purposes, including those already covered by the Commonwealth fringe benefits tax legislation. Thirdly, it aims to nullify contractual arrangements which are deemed - and I repeat deemed - to be shams. Fourthly, it makes employment agents liable for payroll tax for certain on-hired employees.
There are many problems associated with the introduction of such amendments to the legislation which I am sure the Treasurer does not fully comprehend and has not thought through. Firstly, the changes envisaged were broad in the definition of "wages" and "employer" to allow the taxing of benefits along the lines of the Commonwealth fringe benefits tax. Fringe benefits tax legislation is very
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