Page 372 - Week 02 - Tuesday, 4 March 2008
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I am satisfied that this bill will improve the administration of payroll tax and will harmonise the structure of the tax between different Australian jurisdictions. This should have the effect of reducing compliance costs for businesses that span multiple jurisdictions. In light of the assurances of the Department of Treasury about the use of the grouping provisions in the bill, I will be supporting the bill.
It is important to ensure that employers in the ACT are not burdened with unnecessary compliance costs due to the arbitrary rules imposed by different jurisdictions. Harmonising ACT laws and payroll tax with those of other jurisdictions, particularly our neighbouring jurisdiction, is a sensible measure to reduce compliance costs for businesses operating in the ACT and across the border. Hopefully, this bill will also alleviate some of the disincentives for New South Wales businesses to expand into our jurisdiction.
MR SMYTH (Brindabella) (11.01): The opposition will be supporting this bill to amend the payroll tax regime in the ACT. I thank the government for arranging a briefing on the bill; the officers were quite informative. It is a particularly technical bill in the matters that it contains relating to payroll tax. Before I make specific comments on the bill, I would like to make some general comments.
There are few taxing measures that can impose such a competitive disadvantage on Australian business—that is, on businesses that operate across any state and territory boundary—as payroll tax. It takes only a moment to see the issues that arise for businesses that have operations in one or more state or territory, and particularly for Canberra, with New South Wales just across the border in Queanbeyan. There are serious issues over the lack of compatibility between jurisdictions, meaning that companies need to operate more than one payroll system—which, of course, means that when staff move temporarily between jurisdictions there are implications for managing their payrolls.
These are not minor matters because each jurisdiction may make changes to their payroll tax regime, meaning that the relevant company payroll system has to be changed almost continually. The differences in the payroll tax regimes across Australia create a significant competitive disadvantage for businesses that operate in more than one jurisdiction. Implicit in my comments, therefore, is the objective of minimising or eliminating differences in payroll tax regimes across Australia. This brings me to the bill that is before us today.
The bill grows out of the national reform agenda whereby treasurers have agreed that we need to work towards those objectives of minimising the difficulty with workers crossing borders. I have already noted that this bill is largely technical. The areas that it seeks to address are contained in six broad areas: exemptions for wages paid in the ACT for services performed in another country; motor vehicle allowance exemptions; accommodation allowance exemptions; fringe benefits; the grouping provisions; and the employee share acquisition scheme. There are also some transitional provisions. These are good and sensible amendments and it is good to see that treasurers across the country have been able to come to an agreement at least on this part of the payroll tax system. As I noted, it is largely a technical bill. For instance, a good example is proposed section 10 on pages 33 and 34, which contains the formulas for the calculation of various matters within the payroll tax issue.
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