Page 183 - Week 01 - Wednesday, 17 February 1993
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(iii) where the contractor is a natural person - by the contractor and 1 or more persons employed by, or who provide services for, the contractor in the course of a business carried on by the contractor;
unless the Commissioner determines that the contract was entered into with an intention of either directly or indirectly avoiding or evading the payment of tax by any person.".
The amending Bill perpetuates, as Ms Follett said, the discretionary power of the Commissioner for ACT Revenue to determine when the exemption from payment of payroll tax will be applied. As I have said before, all other Australian jurisdictions have enshrined these exemptions in their legislation rather than in regulations, as exists in the ACT. The proposed amendments to the amending Bill seek to ensure that the exemptions available to New South Wales businesses, for example, under the equivalent provisions to section 3B of the Act, are also applied in the ACT with respect to agency arrangements. The details of the proposed amendment are there before you.
The proposed amendment also adds to subsection 9(3), as proposed in the amending Bill. It will have the effect of specifying with greater particularity the circumstances where the services provided will not be subject to payroll tax; that is, where the services performed are, firstly, not of a kind usually required by the agent in running the business; secondly, not of a kind ordinarily required by the agent for more than 180 days in a financial year; and, thirdly, not of a kind where the contract period, or combination of periods, exceeds 90 days in a financial year. A seasonal worker for a primary producer may be hired for more than 90 days, but as a primary producer does not normally hire seasonal workers for more than 180 days in a financial year the contract is excluded. Subparagraph (iv) of the amendment refers to a contract whose value exceeds $500,000 a year.
The amendment is highly technical, but what it attempts to do is make sure that agents and subcontractors in the ACT are not placed at a disadvantage in comparison with their fellows in New South Wales. The other part of the amendment also means that the decisions made already by the ACT Revenue Commissioner, Mr Faichney, are enshrined in legislation. That will give clarity and surety to those hundreds of people who literally do not know from week to week or month to month whether they are liable to pay payroll tax or not. If members care to flip through revenue circulars, they are very complicated documents that people in agency situations and partnerships find very difficult to understand. They obviously seek legal advice, but I am advised by the lawyers also that they are very complicated documents. There have been cases where the commissioner makes a certain decision one way one month, only to tell a tax adviser or a lawyer, down the track, that that decision has been reversed for various reasons.
We are saying that the ACT is the only jurisdiction in Australia that does not have that legislative surety, and we think it should have it. Secondly, I applaud Ms Follett for saying that she is attempting to cover all people in the agency-type situation, not just the computer industry. I am sure she will agree that the Liberal Party's amendment does that very thing she purports to have done in her legislation. I commend the amendment to the Assembly.
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