Page 4529 - Week 15 - Tuesday, 14 December 1993
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MS FOLLETT: I thank Mr Kaine for the question, Madam Speaker. To tackle the last bit of the question first, I think it is erroneous to say that the Commonwealth has a hands-off approach to what the article describes as the sacred cow of superannuation. I think that that article ignores the Commonwealth's direct taxation on both contributions and earnings of superannuation funds. It is not a hands-off matter at all; it is just a different way of doing it.
Madam Speaker, to answer the major part of Mr Kaine's question, this is not a matter in respect of which there is uniformity of action amongst States and Territories, by any manner of means. To say that the Territory alone is pursuing some course of action is also not quite correct. Different actions are being pursued by other States and Territories, and there is no uniformity.
I think Mr Kaine mentioned that New South Wales, Victoria, Western Australia and South Australia have adopted the approach that no superannuation components of wages be included for payroll tax purposes, but Queensland and the Northern Territory have issued rulings to the effect that employee contributions paid by employers at the election of the employees are to be included. Tasmania has had a parliamentary review of this situation and I understand that that review has come down on the side of employer contributions for superannuation being included in the tax base, but the parliament has not yet moved in that direction. So there is no uniformity at all. Ideally, Madam Speaker, I think it is a matter on which there should be uniformity. In fact, the Under Treasurer, Dr Rosalky, will be raising this issue at the next meeting of heads of Treasury, which is a forum where all State and Territory Under Treasurers discuss issues of national significance. That is the bigger picture.
Here in the ACT, I have been advised by the Commissioner for ACT Revenue that the practice of increasing superannuation contributions as part of a salary sacrifice measure in order to reduce liability for payroll tax is becoming more prevalent. So there is a risk of a tax avoidance issue arising. In addition, the Federal Government's superannuation guarantee charge is becoming an increasingly significant proportion of wages and salaries packages. This is clearly an issue that needs to be addressed, because the upshot of it is, of course, that the Territory's revenue base can be eroded, as can other States' revenue bases. As I say, I believe that it is best if the matter is addressed across the board.
The commissioner has advised me, Madam Speaker, that his office is not requiring superannuation contributions to be included by employers in taxable wages at this time, so they are not. Madam Speaker, earlier this year compliance inspectors issued a small number of payroll tax assessments which included as taxable wages superannuation contributions in lieu of salary. These are under review, on objection, by the commissioner; but I repeat that the commissioner is not requiring superannuation contributions to be included in taxable wages. However, I think that there is a need to clarify this issue for employers. I will be discussing the matter with the commissioner, and between us we will make sure that ACT employers are made aware of what the situation is in as clear terms as possible at the first available opportunity.
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