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Legislative Assembly for the ACT: 2002 Week 14 Hansard (12 December) . . Page.. 4373..


Taxation (Government Business Enterprises) Bill 2002

Mr Quinlan , pursuant to notice, presented the bill and its explanatory memorandum.

Title read by Clerk.

MR QUINLAN (Treasurer, Minister for Economic Development, Business and Tourism, Minister for Sport, Racing and Gaming and Minister for Police, Emergency Services and Corrections) (11.01): I move:

That this bill be agreed to in principle.

Mr Speaker, the Taxation (Government Business Enterprises) Bill 2002 gives effect to the territory's commitment to national competition policy as applied to the territory's business entities. A key aspect of national competition policy is agreement by all state and territory governments to apply the principles of competitive neutrality to their significant business enterprises. In general, the principle of competitive neutrality aims to ensure that government entities should be subject to the same taxes and regulatory regime as their private sector competitors.

The bill will do two things. Firstly, the bill will give legislative effect to a memorandum of understanding which was signed by all states and territories in 2001 for the implementation and administration of the national tax equivalent regime, which deals with liability to pay income tax. Government business enterprises do not pay income tax as such, but the income tax equivalent regime establishes a scheme which requires designated government businesses to pay income tax equivalents as if they were private sector businesses. The scheme is administered by the Australian Taxation Office in cooperation with the ACT Revenue Office. In the ACT, territory-owned corporations will be subject to income tax equivalents.

Secondly, the proposed legislation will provide a simple, transparent and open system to determine and identify those government business entities which will be liable to pay all territory taxes-for example, rates, land tax, payroll tax, and stamp duty. Currently, the framework governing the liability of ACT government business entities to pay territory taxes is inconsistent and somewhat haphazard. The executive will prescribe by regulation those entities which are to be subject to the two tax regimes. A number of enterprises will be subject to both schemes and some will be liable to pay only territory taxes. Also, some entities may be directed by notifiable instrument to pay a limited number of territory taxes.

The bill will not only provide a more robust and transparent framework, but also ensure a degree of flexibility. As government business entities change, the minister can add and delete government businesses from the scheme. The lists of those businesses subject to various tax regimes will be able to be amended by regulation or notifiable instrument.

The bill also includes a number of consequential amendments which remove the liability for a number of ACT government entities to pay Commonwealth income tax equivalents, as currently provided in their enabling legislation; omit the reference to the liability to pay territory taxes in the enabling legislation of various entities as this liability will be specified, where appropriate, in the regulations that will follow this bill; amend the


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