Page 4988 - Week 13 - Thursday, 12 November 2009
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multiple administration systems to manage their situations. This imposes a gross inefficiency on Australian businesses and the Australian community. The position has now been reached where all jurisdictions have agreed to implement the provisions that are set out in this bill.
The crux of this bill is that, where employers have employees who regularly work in different jurisdictions during a month, such as people in the airline industry, the liability for that employer to pay payroll tax will be determined by the employee’s place of residence. In situations where an employee does not have a principal place of residence, the liability will be determined by the employer’s registered business address.
Even though the bill replaces two pages in the current act with six pages in the bill, I have been assured that the harmonisation of this issue will be of considerable benefit to those businesses which have employees working in different jurisdictions. The new regime will be simpler for employers to apply and for governments to administer.
I do note that the provisions in this bill are being put into operation by all jurisdictions as from 1 July this year. The reason for this was to ensure that neither employers nor employees could “forum shop” to gain the most advantageous outcome. As a matter of principle, we do not support retrospectivity in legislation, and the reason for this is that circumstances in which decisions have been made by an individual or an organisation should not be changed once those decisions have been made. In this instance, however, the question of retrospectivity concerns issues relating to equity and fairness in the application of this revenue-raising measure. To that extent, therefore, we accept that the retrospectivity that has been applied to this change in policy has established a uniform regulatory environment across Australia.
In the context of consideration of this bill, it is appropriate for the opposition to emphasise that there remain considerable differences in the regulatory environment facing businesses in Australia, and the various payroll tax regimes are a major part of this. We urge the ACT government to give as much impetus as possible to the national harmonisation project to enhance the competitive position of Australian companies as they compete in the global marketplace. I think it is fair to say that, along with many other harmonisation activities, the rate of progress is very slow.
We did raise the question of any financial consequences flowing from this change. The advice we received is that it is virtually impossible to quantify any financial effects. The number of employers is rather small; the number of employees also is relatively small. As well, it is difficult to determine whether a jurisdiction might benefit from this change given the difficulty in establishing liability under the former provisions.
We have spoken to the business community about this bill. In general terms, there is support for measures that achieve harmonisation. Anything that makes life less complex for employers and employees is strongly supported. There has been one matter of concern, nevertheless, that has been raised with us by the business community. This concern relates to subparagraph (i) of proposed section 2G(6)(a) on page 7 of the bill. This provision defines “corporate employee” for the purposes of this legislation.
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