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PAYROLL TAX (AMENDMENT) BILL 1995
MRS CARNELL (Chief Minister and Treasurer) (10.37): Mr Speaker, I present the Payroll Tax (Amendment) Bill 1995, together with the explanatory memorandum.
Title read by Clerk.
MRS CARNELL: I move:
That this Bill be agreed to in principle.
Mr Speaker, the Payroll Tax Act 1987 provides for the imposition of payroll tax in the ACT. Payroll tax is levied on employers and is based on wages paid or payable to employees. Wages are broadly defined to include allowances, fringe benefits and payments made under certain service contracts. Payroll tax is payable by all employers in the ACT with Australia-wide wages in excess of $550,000 per annum. The current rate is 7 per cent of taxable wages.
As part of my Government's electoral promises regarding taxation, my Government announced its intention to provide a two-year exemption from payroll tax on wages paid to new employees who were previously unemployed for over 12 months. Such an initiative will encourage the employment of the long-term unemployed and provide a focus for government assistance for long-term unemployed utilising the private sector. The Payroll Tax (Amendment) Bill 1995 will give effect to this commitment.
Mr Speaker, this Bill proposes that, where a long-term unemployed person gains employment, the employer will not have to pay payroll tax on the first two years’ wages paid to that person. To provide a means of verifying a person's status as long-term unemployed, the Bill proposes a two-part eligibility criterion. The criterion is based on the person being registered as unemployed with the Commonwealth Employment Service for a period of more than 12 months and receiving an unemployment allowance from the Department of Social Security in respect of that unemployment. The Bill does, however, recognise that occasions will arise where an offer of employment may not result in ongoing employment. So that an unemployed person will not be required to wait a further 12 months to be eligible under the exemption, the Bill provides for the concession to be preserved for future employers, provided that the person's period of employment does not exceed four weeks in the preceding 12 months.
The linking of the eligibility criteria to allowances already paid will also provide employers with simple tests under which to establish their eligibility for the payroll tax concession. My Government believes that this initiative should be supported by all members of the Assembly, as it will assist long-term unemployed people to both obtain and maintain meaningful periods of employment.
Debate (on motion by Ms Follett) adjourned.