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Legislative Assembly for the ACT: 2001 Week 10 Hansard (30 August) . . Page.. 3728 ..

Payroll Tax Amendment Bill 2001

Debate resumed from 28 August 2001, on motion by Mr Humphries:

That this bill be agreed to in principle.

MR QUINLAN (10.42): The opposition will be supporting this bill, which my office has been negotiating and discussing with appropriate officers. The bill is necessary because changes to the Commonwealth trainee and apprenticeship scheme 1998 have caused some ambiguity among employers about the definition of trainees and/or apprentices for payroll tax exemption purposes. Unfortunately, some employers have used the ambiguity to claim payroll tax exemptions beyond the original intent of the legislation. I understand that in one case an employer has claimed an entire workforce of 450 as trainees and therefore as being eligible for payroll tax exemption. Of course, that is way beyond the spirit of what was intended to encourage traineeships and apprenticeships.

The legislation was due to commence on 1 October 2001 and this could have allowed a window of opportunity for employers to take advantage of the ambiguity. But last night the government agreed to put forward an amendment that will change the effective date to 1 September.

The bill will give the minister power to approve training courses that would effectively define trainees as "new starters". While in the majority of cases training courses could comply with industry-based training and a nationally agreed structure defined by the Australian National Training Authority, ANTA, the minister could approve training outside this structure. We think there is probably work to be done in relation to the bill in that particular area. However, the bill is structured to allow training to be approved by disallowable instrument, so that will have to do for the time being.

The financial implications could run into millions of dollars, particularly if word got out and payroll tax collections in the ACT were affected. So it is quite obvious that this bill must be supported. I remain concerned about the limited time that we have had to digest the bill and consider the appropriate alternatives of how the dimensions of the problem should be addressed. Notwithstanding the limited time available to us, we will say that the bill is adequate to do the job. We will support the bill and the amendments.

MR HUMPHRIES (Chief Minister, Minister for Community Affairs and Treasurer) (10.46), in reply: Mr Speaker, I thank the opposition for its support of this bill. It is unusual for a bill of this magnitude with such serious implication for revenue to be dealt with in such a short space of time, but I think this course of action is warranted in these circumstances. As Mr Quinlan has noted, the effect of the bill is to restore the original policy intent behind payroll tax exemptions and provide a way to encourage employers to take on genuine trainees and apprentices.

The bill will provide certainty to employers as to which classes of employees are eligible for a payroll tax exemption and, of course, most importantly, it will prevent the leakage of perhaps as much as $5 million in annual payroll tax revenue. Mr Speaker, for those reasons I think it is important that we deal with this legislation today. I will make some comments about the amendment when we reach the detail stage.

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