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Legislative Assembly for the ACT: 2000 Week 5 Hansard (11 May) . . Page.. 1418 ..

MR HUMPHRIES (continuing):

financial institutions and on liabilities of short-term dealers in respect of short-term dealings. The bill ensures that no liability will arise in respect of those receipts or dealings on or after 1 July 2001 and that no returns will be required to be lodged in respect of receipts or dealings arising in any month after June 2001. Other provisions of the Financial Institutions Duty Act 1987 will be retained to permit the undertaking of compliance activities relating to the pre-1 July 2001 liability of all financial institutions.

Mr Speaker, this bill also addresses two unintended consequences of the GST legislation. Under current legislation, the interaction of GST and stamp duty poses a problem for the hiring industry. Effectively, both taxes apply last, resulting in a cascading effect on the calculations. Despite representations from state and territory governments and the industry, the Commonwealth has decided not to change its GST legislation to exclude duties from the calculation of consideration for hiring charges for GST purposes. Therefore, in an effort to avoid circular taxation, Tasmania and Victoria have moved to exclude GST from their hiring duty base. Relevant amendments to the Duties Act effected by this bill will bring the ACT into line with those states and other jurisdictions which are also pursuing this approach.

This bill also ensures that the payroll tax base under the Payroll Tax Act 1987 does not include GST paid on services performed by contractors. The Payroll Tax Act deems that payments made under a service contract are wages for the purposes of payroll tax. From 1 July 2000 the payments made by a deemed employer to a contractor will be inclusive of the GST. However, it is not the government's policy intention to impose payroll tax upon the GST inclusive value of a service contract. Therefore, the bill provides that any GST component of an amount paid or payable by an employer in relation to the performance of work under a service contract, or the resupply of goods by an employee under a service contract, should be deducted for payroll tax purposes.

In conclusion, this bill is a further indication of the territory's intention to comply with and give effect to the intergovernmental agreement. This, together with the Financial Relations Agreement Bill 2000 already tabled, is another step in the process of implementing the national tax reform system. I commend the bill to the house.

Debate (on motion by Mr Quinlan ) adjourned.


MR HUMPHRIES (Treasurer, Attorney-General and Minister for Justice and Community Safety) (10.38): Mr Speaker, I present the Subsidies (Liquor and Diesel) Repeal Bill 2000, together with its explanatory memorandum.

Title read by Clerk.

MR HUMPHRIES: Mr Speaker, I move:

That this bill be agreed to in principle.

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