Legislative Assembly for the ACT: 2004 Week 08 Hansard (Tuesday, 3 August 2004) . . Page.. 3298 ..
the directors of non-profit organisations. However, I believe a little more thought was needed, especially as many organisations are incorporated under ACT incorporations law. I see ongoing problems with this legislation that need to be worked through. Unnecessary questions are created for the community sector. I would like to have worked through those concerns with the non-profit sector and maybe come up with amendments. Those issues could have been worked through to avoid the situation where people, I guess through fear, do not take up voluntary positions to help the community sector with their management structures.
MS TUCKER (11.10): This legislation reduces the ability of company directors to avoid responsibility for debt incurred by companies under their charge even if they are no longer directors. As members have said, it comes from the Cole royal commission. The bill makes every member of a company jointly and severally liable for the payroll tax debts of every other member. It also addresses so-called phoenix firms that are used by companies to avoid liability for debts. This bill makes the ACT law consistent with New South Wales, which should simplify compliance and help avoid cross-state avoidance of tax debts. These goals of the bill are worthy of supporting.
I know Ms Dundas’ concerns and I was prepared to support her motion for adjournment. We have also found ourselves caught a bit short on this and I have only started consulting fairly recently with the community sector. I acknowledge that we have had this bill since May, but it seems as though the government did not consult with the community sector on this. So I have sympathy with the move to adjourn. However, it is obvious that this bill is going to get up today, so I will just note a couple of points.
Basically while any community sector organisations and their directors who are avoiding paying a tax debt should be made liable for their debts, there is a possibility that some community organisation directors may not be aware that the organisation is not paying the tax owed. It is entirely possible that the directors may be deceived by the staff managing the organisation. In such a case the directors may not be aware that they have not paid the taxes owed. However, the other side of that concern is put clearly by the Treasurer’s office. There are protections in this legislation. The main points are that not-for-profit organisations can be exempt from some taxes such as payroll tax, but this does not necessarily include all taxes. New section 56E that is proposed in this bill states:
It is an defence to a proceeding for recovery of an assessment amount from a director or former director of a corporation if the director or former director establishes that he or she took all reasonable steps in the circumstances to ensure that the corporation paid the assessment amount.
So arguably that is one protection. Also, of course, finally the Treasurer has the power to waive fees and fines and to approve act of grace payments under the Financial Management Act. I put on the record today that the Greens have been told that these protections are in place to avoid any unwanted negative impacts of this on important community initiatives and organisations—initiatives through setting up and running organisations—and that the intention of this legislation is not to catch good people working for the community in the ACT. It is about the issues that were identified in the Cole Royal Commission. Protections are there to avoid people being unfairly caught up in this law.