Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .

Legislative Assembly for the ACT: 1999 Week 5 Hansard (5 May) . . Page.. 1402 ..

MR SMYTH (continuing):

represents about 48 per cent of ACT building and construction work. Home owners undertaking relatively small renovating projects would incur an additional cost. The levy would be seen by project owners, home builders and renovators as simply a tax on building and construction.

Mr Berry's Bill largely mirrors the previous government Bill. The reason the Government developed the Bill was to focus on the actual detail that would be required if a levy was introduced. This made clear the impact of its regulatory nature and the associated administrative costs, and, as the Minister has already said, this was a significant reason for not proceeding.

Mr Berry's estimate of the funds to be raised is overly optimistic. The Commonwealth has indicated that it is exempt from State taxes and charges and the levy would not apply to its building activity. The Department of Defence, for example, is responsible for 80 per cent of the Commonwealth's capital works in the ACT and has refused to pay the levy in any State.

Mr Speaker, it is estimated that administration costs could be as high as $400,000. This estimate is based on the administration costs of similar schemes in other States and the ACT construction industry long service leave fund. These costs would make a significant dent in the $1m revenue Mr Berry estimates the levy would provide.

The construction industry is characterised by a high level of subcontracting activity, a dynamic work force and a history of structuring business through informal avenues. Within this context, many of the provisions contained in the proposed Bill would be difficult to enforce, particularly those relating to calculating and collecting the levy. South Australia, for example, has a very low compliance rate in training levy collection, particularly in relation to small projects. Tasmania has resorted to the use of debt collectors to recover outstanding payments.

Mr Speaker, the levy is inconsistent with moves to minimise regulation in building processes. The Department of Urban Services is working to streamline the building regulation arrangements. The approach taken to implement the levy in the proposed Bill is not consistent with these reforms.

The Bill itself has significant financial implications for the Government, although Mr Berry, in his presentation speech, indicated that the Bill would have no impact on the budget. Mr Speaker, this is not correct. While the Bill exempts work carried out by a public authority, this does not cover work awarded as a result of public tendering. For example, if Totalcare successfully tenders to the Department of Education and Community Services to repave a school playground costing $50,000, the levy would be payable.

Mr Speaker, as you just heard Mr Stefaniak say, given the size of our capital works program and the works carried out through the departments, some $140m, the levy on that would be around the $300,000 mark. This, of course, has not been appropriated in the budget. So, I guess, we are then left with the unenviable task, because of Mr Berry's Bill, of working out what we have to take out of the capital works program to free up the money that would be necessary to pay this levy.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .