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MRS CARNELL (Chief Minister and Treasurer) (5.18): I understand very well what Ms Follett has said on this amendment. In fact, it is something I put initially when we were looking at implementing this policy. The problem that was brought forward, and I think it is a very real one, is how you assess the long-term unemployed if you do not do it on the basis of their receiving social security payments. As Ms Follett would know as a previous Treasurer, whenever you go down the path of tax exemptions, you have to make sure that those tax exemptions are enforceable and have some capacity to be monitored and to be put in place.

The question we had to answer when we were drafting this legislation was how we stopped companies - I am sure that there would not be too many of them - replacing current staff with long-term unemployed. The answer to that question is that there is an awful lot of training that goes into staff, and we could not really believe that companies would do that. It simply would not be cost-effective for them to do so, so we ruled that one out. The second question was whether we could make this available to people who were not receiving social security benefits. The problem we struck was how we were going to provide a very simple method for employers to determine the eligibility of the people who applied for jobs under this Act. We determined that, in these sorts of areas, the first and most important thing to do is to make sure that you target these exemptions appropriately. By targeting them at the long-term unemployed who rely on social security payments, we have targeted people who are supporting families - obviously, if they are supporting a family, they will be getting social security payments - and people who are single and are being supported totally on unemployment benefits. We believe that it does target those people properly.

I share Ms Follett's wish to extend it, but when you do this sort of thing you have to make sure that you extend it in a way that is implementable and enforceable. I think we should not pass these amendments today. Put this Bill in place in its current form, assess what the uptake is and what the extra need is out there for people who are not registered with social security, and look in the longer term at Ms Follett's ideas, because I think they do warrant looking at. At this stage, we simply could not work out how you would stop the system being abused.

MR MOORE (5.21): Let me first say that the amendments put up by Ms Follett make good sense, and I think the Chief Minister has acknowledged that they make very good sense. The problem the Chief Minister and Treasurer has is that we may not know how we are going to stop people abusing the system. Clearly, where you use people on social security, there is a simple computer comparison to make as to whether somebody who has applied and is nominated has actually been on social security. That would deal with the vast majority of cases. So, what happens with these other people? The usual system in ensuring that people are not cheating is to rely on a series of things. The first one, and I gather the one that is most successful, is dobbing in. Where somebody has been applying for exemption from payroll tax under this section and they have employed somebody who has been working, often they are dobbed in because they are cheating. Normally, for cheating in any taxation matters quite severe penalties apply. Whilst there are those who would abuse the system, I would have thought that they were very few and far between. By and large, most people accept that, while they will legally minimise the amount of taxation they have to pay, and fair enough, they will do so within the law. The number of people who will do it outside the law is very minor.

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