Page 3830 - Week 13 - Thursday, 18 October 1990
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Pornography
MR STEVENSON: My question is to Mr Duby. Does Mr Duby consider that the money for misery being obtained from those promoting pornography in Canberra, and spreading it throughout Australia in contravention of the law of every State in Australia, is enough? Is any investigation currently being undertaken or planned concerning whether or not the figures given out by those promoting pornography before the Bill was introduced are the correct ones, or whether the figure applying after the Act came into effect - the one that has resulted in such a low amount of money being obtained - is the correct one?
MR DUBY: I thank Mr Stevenson for the question. Really he asked two questions. He asked whether I consider that the money being raised from the X-rated video franchise tax is enough, and the answer to that is no, I do not. He then asked whether I can give an explanation as to why the estimates of revenue from the proposed tax do not match the figures that are currently being applied in the collection of tax now, and I can explain that quite easily.
The Government was aware at the time of announcement that revenue estimates could be based only on widely publicised but unsubstantiated information provided by the X-rated video industry to the Commonwealth parliamentary committee on X-rated videos. I must point out, of course, that this is a legal industry. Subsequent investigations by the Revenue Office, since the introduction of the X-rated video tax, have revealed that the industry is smaller than that publicly portrayed.
It has also been established that significant numbers of X-rated videos were manufactured and distributed to retail outlets prior to the introduction of the tax. It must be remembered that the tax legislation was passed, I believe, in May of this year and was to become effective on 1 July. So these businesses - as I said, legal businesses - had the legal option of minimising the tax that they would have paid if they had not taken certain steps. As a result, a large number of X-rated videos were produced and distributed to retail outlets prior to 1 July. It must be remembered, of course, that this X-rated video franchise tax is based on the wholesale value of videos sold and distributed. This had the effect, of course, of reducing the value of taxable wholesale sales during July and August.
There is no disputing the fact that tax avoided on these transfers of stock from manufacturing and wholesale arms of the industry to retail arms of the industry have been estimated by the Revenue Office to be in the region of $800,000. In the long term, these circumstances are highly
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