Page 2161 - Week 10 - Thursday, 26 October 1989
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This is just another loophole, a bottom of the harbour scheme, call it whatever you like, for people not to have to pay their share of the tax. By dividing their companies up and putting so many people into each company so that it is just below the amount, they do not have to pay payroll tax. Well, if you are telling me that that is not cheating, then I do not know what is. If it is the same business and it is employing the same amount of people, then it should be paying the payroll tax.
Mr Kaine: You have to demonstrate, Minister, that that is happening.
MRS GRASSBY: It is happening. You are saying that we do not have consultation. This is always the Liberal Party's cry, that we do not have consultation with people. Since 25 July people have known about this Bill. It has lain there and they have known exactly about it. All of a sudden they have woken up to it. Unless you spoon-feed them, as I have said before, they scream like mad. They are saying, "It is going to cost us this, it is going to cost us that". But they want everything else.
They want all the facilities that we have got in Canberra; they want all the good roads; they want all the parks; they want Canberra to look beautiful, as it does; but they do not want to pay tax for it. They expect the wage-earner to pay the tax, and the wage-earner has very little tax avoidance opportunity at all. If you look at what wage-earners get back in their tax cheques, you find they would be lucky if they got back a couple of hundred dollars a year, but if you look at what the companies take off in tax you find there are thousands upon thousands of ways they have learned to save tax.
So, Mr Speaker, I cannot possibly support the Opposition in this. I support the Government's payroll tax Bill because I think it is a fairer way of people paying their tax. You know, it is those who can afford to pay the tax who should be paying it.
MR HUMPHRIES (4.08): Mr Speaker, I think it is worth just looking at some of the implications of this Bill and examining the history of payroll tax and what it was originally conceived as and what it now means to governments as a source of funding. The payroll tax idea first was introduced by the Commonwealth in 1941 as a means of financing child endowment and remained in its hands for some years, until 1972, when States assumed responsibility for its collection from the Commonwealth.
Since that time, of course, payroll tax has become easily the largest source of taxation revenue for the States, representing more than 30 per cent of taxation revenue. Since 1972, the rates have been raised from about 2.5 per cent to more or less 5 per cent across the board. I think there is one State that has not yet reached 5 per cent. In some States there are surcharges or levies that add an
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