Page 2171 - Week 10 - Thursday, 26 October 1989
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However, as the legislation has been drafted without reference to practical situations, the private sector is most concerned. Are they to leave it to those who administer the legislation to ensure that anomalies or inequities do not arise? That is the situation under the terms of this Bill. The legislation allows for administrators to shift ground by virtue of interpretation.
The question of subcontractors where materials are involved was also discussed. They felt the proposed legislation allows the commissioner to determine the split between labour and materials. The ACT Treasury is currently compiling an explanatory paper in relation to the proposed Bill. It would have been preferable if further explanation had been included in the explanatory memorandum to the Bill initially.
Other points were dealt with. The private sector was worried about the fact that legislation relates to contracts in existence at the time of passing legislation. Neither New South Wales nor Victorian legislation dealing with payments to contractors applies to contracts already entered into. The term "person" is not defined in the legislation.
The proposed legislation determines "benefit" as that used for the Fringe Benefits Assessment Tax Act. This does not apply in New South Wales or Victoria, where clarification of what is a benefit has been done by rulings. By using this definition, the term "benefit" has been extended to situations where the benefit is not part of the remuneration package of the employee that is negotiated at the time of employment. The Treasury was asked whether the commissioner would adopt miscellaneous tax rulings and other documents issued by the Federal commissioner of taxation in relation to fringe benefits tax. The Treasury was unable to clarify this. That is a matter of concern to the private sector.
The Supreme Court in New South Wales has recently handed down a decision in the Terry Shields case. The principal enunciation in that case is that a benefit is wages for payroll tax purposes if it is provided to the employee in lieu of cash. The Treasury staff have apparently indicated that the New South Wales commissioner is considering introducing legislation to determine a benefit in the same name as the proposed ACT legislation.
There also arose the question of when payroll tax is payable on benefits. On a literal interpretation of the legislation, it will be payable monthly, as are other wages. However, the New South Wales commissioner has accepted payment on an annual basis to fall in line with calculations for FBT purposes.
An area also of concern is that of employment agents. The proposed legislation treats the employment agent as an
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