Page 4617 - Week 16 - Tuesday, 27 November 1990
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flexibility without the application of extra duty on the roll-over principal. Likewise, the removal of the term restriction on the roll-over of commercial bills of exchange will allow businesses flexibility in choosing a shorter or longer term to meet their financial needs.
Mr Speaker, members will be aware that in recent times there have been a number of mergers of financial institutions in the ACT. Under the Act no provision existed to exempt the accounts of depositors in such financial institutions. The exemptions from FID on new accounts established as a consequence of the amalgamation or reconstitution of the financial institution will remove an anomaly whereby FID is charged on deposits twice. Customers of merging financial institutions will benefit from this change.
Mr Speaker, under existing legislation the Crown is not bound by the Act and the Commissioner for ACT Revenue must exempt accounts kept on behalf of the Commonwealth, a State or a Territory and certain statutory authorities. This Bill binds the Crown and changes the exemption status so that all government organisations will have to apply to the commissioner for exemption. Only those organisations that are solely funded from the consolidated revenue of their State or Territory will be eligible for exemption.
This provision will enable FID to be charged to accounts of government organisations that compete on a commercial basis with private businesses, whether or not for profit, and will allow greater control over the granting of exemptions. This initiative removes an advantage which some government agencies enjoy and which cannot be justified in the current climate of public sector competitiveness and management accountability.
Under the existing Act the only way an exemption can be granted to an organisation, other than those that are specifically mentioned in the Act, is by prescribing them by regulation. This means that an organisation, once exempt, could conduct non-exempt commercial activities through exempt accounts without paying FID. The new provisions will allow the Government to exempt specified accounts, or classes of accounts, as opposed to an organisation, for the purposes of the Act, which will reduce the likelihood of commercial activities receiving exemption.
In conclusion, Mr Speaker, the Financial Institutions Duty Bill, while primarily intended to close off possible avoidance avenues when the ACT FID rate is increased from 1 January next year, will provide a number of benefits to the ACT community, which I have outlined. Therefore, I commend the Bill to members.
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