Page 4623 - Week 16 - Tuesday, 27 November 1990
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It also needs to be pointed out that the question was asked, "Why is the ACT the only jurisdiction which is simply increasing FID tax and not introducing its own BAD tax?". The answer is quite simple, in a lot of ways. There are a number of States in the Commonwealth that have never had a financial institutions duty tax. For example, Queensland has never had that tax. For Queensland to introduce a new tax, in addition to taking up or trying to take up the slack from an old tax, was regarded by them to be politically unacceptable, and they chose not to go down that course.
At the moment New South Wales is looking at its whole range of revenue raising proposals in this area, and is actually in the process of evaluating both BAD and FID taxes, and introducing a FAT tax - a financial assets tax. At this stage they are not too sure which route they will be taking. At the moment they have decided to simply maintain the bank account debits tax, the BAD tax, at that level, and perhaps reform their own area of revenue taxing at some time in the future.
It should be pointed out that a State like South Australia already has a financial institutions duty tax at the highest level in the nation, of 0.1c in the dollar, whereas the ACT at this stage is only planning to introduce a tax of 0.08c.
Mr Stevenson: At this stage? Is that an omen?
MR DUBY: I will rephrase that. Under this legislation the ACT plans to introduce FID tax at 0.08c in the dollar, which is 0.02c less than that which currently applies in South Australia. So clearly, a state like South Australia, was unwilling, or unable, to introduce legislation to raise their current FID tax to a comparable level; in other words, to raise it even higher than that which already exists, for the simple reason that they would have run into avoidance problems which, of course, occur - as all students of revenue collections in this country know - when you have one jurisdiction adjacent to another that, on whatever the particular item might be, imposes duties that are substantially different to those which apply across the border. I suppose that the best example of that is the cigarette tax, which has been known to cause all sorts of difficulties between Queensland and southern States in terms of collection, smuggling, and all sorts of things. We have that problem, of course, in relation to financial transactions. So, South Australia's hands are also really tied.
The question was raised of the lack of public information. As I said, I do not think you can do much more than announce the matter in the Assembly, put out a media release and have detailed consultation with all elements of the major players involved in the local financial industry in the ACT. We have had detailed consultation with the Bankers Association, with CARD - the Canberra Association
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