Page 2170 - Week 10 - Thursday, 26 October 1989
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Members of the private sector did meet with officials today, and a number of points came out of this particular Bill. They were concerned about the lack of a consultative process, particularly in relation to the Bill, and a number of points were raised. I think it is worth while to go through them.
Firstly, let us take service contracts. The principle of the legislation dealing with payments to contractors is the same as in the New South Wales and Victorian legislation. However, the ACT legislation differs significantly in the area of exclusions and exemptions. New South Wales has specifically excluded four situations. However the ACT Bill has not followed it. These situations are as follows:
Services of a kind ordinarily required by a business for less than 180 days in that financial year;
Services provided by one person for a period of 90 days or less in that financial year;
Payment of consideration under contract being $500,000 or more; and
Where the contractor engages labour to perform the work in relation to the services, the subject of the contract, the contractor may work on the job together with his partner or partners and/or employees.
The New South Wales legislation specifically excludes owner-drivers, insurance agents and brokers, and direct selling agents. The Victorian payroll tax commissioner has also excluded these.
The discussion that arose on these matters was quite lengthy, and some other issues were raised. The ACT Treasury was asked whether owner-drivers would be considered employees under this legislation. The response was that, if the service is in the nature of a contract of service, a liability exists; if a contract for service, no liability exists.
The Treasury was also asked whether a partnership would be excluded or a contractor who employs labour. It appears that these persons would be excluded by virtue of the commissioner's discretion under the proposed legislation. However, the view of the business community and professionals is that taxation by discretion is unacceptable.
It is accepted by members of the private sector that, where there are contrived contractual situations whereby one person "contracts" to the same business for long periods, the legislation is not challenged; that is, where a definite employer-employee relationship exists.
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