Page 4616 - Week 16 - Tuesday, 27 November 1990
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In fact, taxation decisions should be subject to scrutiny and to the full debate that I have called for amongst the elected members in this Assembly. The example that I spoke of, that Mr Humphries raised last year, was the new general rate following the revaluation of residential properties. That is a rate of taxation that affects a vast number of ACT residents, as does this change to the financial institutions duty. I reiterate that it is appropriate for such matters to be the subject of debate, and of vote, in this Assembly. On that occasion we successfully asked the Assembly to amend the Rates and Land Tax Act, to fix the general rate in legislation, although that had not been done in the past. It is a good principle to abide by.
Mr Speaker, in concluding I reiterate that we do not oppose the Bill. I hope that Mr Duby will respond to some of the questions I have raised, particularly about consultation and about the impact of the Government's decision to increase the financial institutions duty. I would ask the Government to introduce an amendment to the Bill to enshrine the rate of duty in the Act and to ensure that future tax changes are decided by the Assembly rather than by one individual.
MS MAHER (8.08): I wish to speak in support of the Bill. This Bill contains a number of features which will be welcomed by the ACT community. The Bill will introduce measures which reduce the opportunity for local and cross-border tax avoidance, as Ms Follett has already mentioned. Firstly, I would like to refer to the provisions of the Bill dealing with the exemption of social security beneficiaries. Department of Social Security pension payments which previously did not qualify for an exemption under the Act, that is, family allowance, double orphans allowance and the child disability allowance, will now qualify for an exemption. Financial institutions and the Department of Social Security will welcome this change. It removes the costly exercise of having to separate and identify various categories of pensions for revenue collection purposes. Canberra's welfare recipients should also be pleased with this amendment.
The Bill also addresses an anomaly in the ACT concerning charging of FID on roll-over term deposits and commercial bills. Under the existing Act, FID has been chargeable for the roll-over of term deposits when interest has been added to the principal and the total reinvested. This was not the original intention of the legislation and it is considered inequitable because duty was paid on the principal when it was originally invested. The provisions also caused confusion in financial institutions, some of which introduced special arrangements to legitimately avoid extra FID when term deposits were rolled over.
The new provisions achieve the original intention that FID is payable on the interest added to the roll-over sum. This will be welcomed by financial institutions and their customers. This change allows considerable investment
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