Page 374 - Week 02 - Tuesday, 4 March 2008
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to $1.5 million to ensure that bracket creep was addressed and that we would get the settings right to ensure that business in the ACT was competitive.
During the debate on the Road Transport (Third-Party Insurance) Bill 2007, I thought for a moment that the Treasury had actually developed a sense of humour. In their examples, instead of the nameless A, B and C, they referred to Albert, Boris and Chloe. I was disappointed to note that the sense of humour has not appeared to last and we have gone back to having corporation A, corporation B and corporation C. That is just by way of a lighter note.
Payroll tax remains a significant source of revenue for the ACT government. It will be worth well over $200 million in this financial year. The ACT needs to have the most efficient payroll tax regime that is possible. It needs a payroll tax regime that has the highest possible extent of compatibility with the regime in New South Wales in particular, given the cross-border issues in the ACT. This bill takes us a further step down the path of compatibility. I look forward to seeing initiatives that will add more commonality to the payroll tax regimes that operate in both the ACT and New South Wales. I also look forward to announcements that may or may not appear in the budget as to whether the government will address issues such as the rate and, indeed, the bracket creep over the thresholds that has been occurring during their term in government. The opposition will support this bill.
DR FOSKEY (Molonglo) (11.09): I will also be supporting the Payroll Tax Amendment Bill because it seems to me to be entirely sensible. It makes a great deal of sense for payroll tax issues to be harmonised across borders in Australia. I note that this bill will not come into effect until June this year, which should give business plenty of time to plan and adjust.
The major intent of this legislation is to allow companies to lower their compliance costs by cutting down on their paperwork. I also note that rates of tax and tax-free thresholds have been excluded from the harmonisation, which allows the ACT to continue to apply a tax rate of 6.85 per cent, which is considerably higher than in many other states, while also allowing a higher threshold of $1.25 million of payroll whereby no duty is payable. This means that larger businesses are paying higher taxes on larger amounts of payroll, while smaller companies which come under the threshold do not need to pay payroll tax. This accords with the Greens’ support for small business.
In terms of the detail of the bill, we support the status quo whereby employee share acquisitions are included as wages. We also support the exemption of wages for employees who work outside Australia for more than six months as, apart from other issues, those employees will make fewer demands on services in the ACT. It would not be surprising to anyone here that the Greens do not support motor vehicle allowances being tax free, except in cases where they really are required for work purposes. Nor do we support large cars being part of fringe benefits. For this reason, we think it is of concern that we are harmonising our exemption on payroll tax with other states to the large car rate. This may be appropriate for some workers in the Northern Territory, but is it sensible or responsible to encourage large cars in the ACT?
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