Page 4614 - Week 16 - Tuesday, 27 November 1990
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The Bill is designed to clarify some aspects of the existing Financial Institutions Duty Act, and to make some amendments which will reduce the possibility of avoidance of this tax. The Labor members of the Assembly very much welcome the decision, that is encompassed in the Bill, to exempt all social security payments from this duty. However, there are a number of matters in the Bill on which I would appreciate Mr Duby's clarification.
The first of these is the fact that this is one of the first examples where the Government has introduced a Bill and then expected it to be debated and passed less than a week after its introduction. In fact, the Bill was introduced on 22 November, some five days ago. It seems to me to be expecting a very great deal for members of the Assembly to deal with such a matter in less than a week. The agreement we established last year, which was to allow a week after introduction, was a sensible agreement. That agreement allowed for proper consideration, and for fully informed debate on Bills. If there is a reason why we have less than a week on this occasion, I would like to hear it.
Mr Duby's presentation speech on this Bill did, in fact, contain something which is rather more important than the provisions of the Bill itself. He referred to the Commonwealth's decision to abolish the debit tax on bank accounts, and to reduce financial assistance grants to the States and Territories in line with the estimated receipts from the tax. In effect, the Commonwealth is withdrawing from this field of taxation, and making way for the States and Territories to raise their own revenue.
In his speech, the Minister pointed out that all other States and Territories intend to introduce their own debits tax. For what Mr Duby says is the sake of simplicity, the ACT Government has apparently decided against a debits tax. Instead, it will increase the rate of financial institutions duty by one-third, from 0.06 per cent to 0.08 per cent. There are some reasons for concern in that statement made by Mr Duby. The first concern I have relates to the impact of this duty. The existing Commonwealth debits tax applies only to debits from accounts which can be drawn upon by cheque or payment order. In other words, the tax is paid by the business community, and by those individuals who choose to operate a cheque account.
In contrast, the financial institutions duty is payable on deposits to all accounts at financial institutions. At first glance, it does appear that what the Government has done is to transfer the burden of the Commonwealth's debits tax, which falls mainly on medium and high income sections of the community, to a duty which hits everybody who operates an account. Perhaps Mr Duby could comment on that.
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