Page 5861 - Week 18 - Wednesday, 11 December 1991
Next page . . . . Previous page . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
attributable to service contract provisions. I understand, Mr Speaker, that the Housing Industry Association has been pressing for those details for some time and it is apparent that the Government may face some difficulty in isolating that sum.
The Rally's own computation of the potential impact on revenue is based on the following premise: If the threshold liability for payroll tax is a payroll of $500,000 or more, which is the current law, then the net does not catch the small builder. On the Housing Industry Association's advice, the tax liability is for those builders who build between 15 and 20 homes per year. The industry also believes that the service contract provision adds between $1,200 and $1,500 to the price of an average new home. I remind members that the Master Builders Association has lobbied strenuously for an exemption from payroll tax for independent subcontractors, including labour-only subcontractors such as bricklayers, ceramic tilers and carpenters.
The 1989 amendments impose an assessable tax liability in respect of any trades man or woman if he or she works for a contractor for more than 120 days in one year. The legislation has been expressed at 90 days, but in fact much discretion has been left to the Commissioner for ACT Revenue in setting these parameters.
Returning to the computation, if one looks at an annual housing turnout rate of 2,400 per year in the Territory and figures provided by the Housing Industry Association indicating that only 50 ACT builders would fall within the payroll net as a result of building an average of 25 homes a year, the assessable tax liability is therefore 1,250 homes by $1,200. This brings the maximum estimated potential diminution in revenue to $1.5m.
However, from that sum should be deducted those elements of payroll tax liability which do not relate to the service contract provision and will remain assessable items. This is the computation that only the Government is in a position to provide. I note that the Chief Minister reminded us yesterday, in answer to a question that I posed, that the Government is aware that this tax has an incidence in the service related occupations outside of house construction, but the extent of that impact is as yet unassessed.
In any event, as a means of offsetting this loss of revenue, the Housing Industry Association argues that the 8,000 subcontractors in this Territory could be licensed in the same manner in which they are registered in New South Wales. As members are aware, and as I mentioned yesterday in the house, only plumbers and electricians are licensed in this Territory, whereas a vast range of subcontracting trades - for instance, bobcat drivers, carpenters, ceramic tilers, painters, decorators - are not registered. An annual registration fee of $100 would produce approximately $800,000.
Next page . . . . Previous page . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .