Page 2643 - Week 09 - Wednesday, 24 August 1994
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During the course of consultation with the Law Society, concern was expressed that agreements for the change in beneficial ownership would be subject to duty, rather than the actual transfer. This is not intended. The amendment clarifies the position that agreements to transfer marketable securities are not liable for duty and maintains the status quo in that regard. To achieve uniformity with legislation of other jurisdictions, the Bill restricts the concession for securities lending transactions to those completed within 12 months. In other States, securities that are loaned for longer periods to be held as collateral for loans are subject to loan security duty. The Bill inadvertently provided for a liability for loan security duty on these transactions in the ACT. The amendment, therefore, expands the concession to ensure that loans of securities to be held as collateral are not subject to duty in the ACT.
Madam Speaker, Division 3 was deleted by the Bill, as it will no longer be required with the change in nexus to the place of incorporation. This division provides that transfers of shares in ACT incorporated companies are ultimately liable for duty in the ACT, even if the primary liability is to another jurisdiction. This amendment retains the existing Division 3 to close a potential opportunity for tax avoidance due to the change in the nexus provisions. It is possible in the transitional period for shares in an ACT incorporated company to be stamped as exempt in another jurisdiction. Restoring Division 3 ensures that, on the registration of the securities, they will be liable for ACT duty. The penalty provisions have been amended to ensure that the maximum period of imprisonment is consistent with other legislation in the ACT for the corresponding monetary penalty. I present a supplementary explanatory memorandum.
MR KAINE (4.53): I take no particular objection to the amendments that the Government has now brought forward to its own Bill; but I would comment that this, surely, is an example of sloppy work on somebody's part. They bring down a Bill that they tell has to be in effect by 1 September because it has to be uniform, and, even as we are debating it, we are given a bunch of amendments. I can understand that one or two of the amendments, perhaps, flowed from some complexity that needed to be clarified; but I cannot understand why the Bill was put before the Assembly before these matters were clarified. Is this the way the Government does all its work? The indications are that it is. That, I believe, reflects poorly on the Government's approach.
As I said, one or two of the amendments now before us probably flow from the complexity of the matter; but there are a couple that do not. One is simply increasing a penalty from six to 12 months. Why did they not look at that before they put the Bill on the table in the first place? If six months or $10,000 was the appropriate penalty in May, why has it changed? The answer is that the Government did not review it. It did not look for cross-comparisons between this and other law, to see what the appropriate level of punishment or penalty was. That is the thing that concerns me most.
I indicated yesterday that the Opposition supports the Bill. Its objectives are worthy. I also pointed out that, in my view, by implementing this new law, the Government may well be enhancing its revenue collection, because the mechanisms in place may well allow more efficient collection of the revenue. For the same reason, I have no particular objection to the amendments that they put forward at the last minute yesterday.
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