Page 2795 - Week 11 - Wednesday, 21 October 1992
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Wednesday, 21 October 1992
__________________________
MADAM SPEAKER (Ms McRae) took the chair at 10.30 am and read the prayer.
PAYROLL TAX (AMENDMENT) BILL 1992
MR DE DOMENICO (10.31): Madam Speaker, I present the Payroll Tax (Amendment) Bill 1992.
Title read by Clerk.
MR DE DOMENICO: I move:
That this Bill be agreed to in principle.
Madam Speaker, payroll tax on service contracts was introduced in the Australian Capital Territory on 1 November 1989. There is no payroll tax on service contracts in Queensland, Western Australia or the Northern Territory. Payroll tax on service contracts does exist in Victoria, New South Wales and Tasmania. South Australia also introduced it, after an extensive review of legislation in the other States, on 1 April 1992.
Madam Speaker, much has been said about the importance of the housing sector to the ACT economy. Discussions with both the Master Builders Association and the Housing Industry Association show a united front in their request for the sort of change proposed in this Bill. I believe that the Chief Minister herself has hinted that the Government would not be against some changes to the Payroll Tax Act. Another reason for this Bill is that prior to the election in February the Liberal Party gave a commitment that it would amend the Payroll Tax Act. What we are doing here this morning is honouring that commitment. Obviously, there are other reasons why there is a need for change. The rules for payment of payroll tax with respect to partnerships in the ACT, in the opinion of the Liberal Party and the Opposition, must conform to the rules that apply in New South Wales. The exemptions contained in revenue rulings should form part of the legislation.
We need to look at the application of payroll tax to partnerships in the ACT. Payments made to a contractor, we believe, should be treated the same, irrespective of whether the contractor operates through a company or is a partnership or is a sole trader. Assuming that a contractor, for example, does not fall within any other exemption, it is useful to look at a practical example as it applies to the building industry. We all know how important the building industry is to the ACT.
Let us take the situation where two bricklayers and one labourer provide bricklaying services to a builder. All of them work on the one site. If they operate through a company, then the builder does not pay payroll tax - and that is included in revenue circular 6 - as the persons performing the work will be employed by the company. If one of the bricklayers employs the other two -
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