Legislative Assembly for the ACT: 2005 Week 07 Hansard (Thursday, 23 June 2005) . . Page.. 2226 ..
The most significant are amendments to the Payroll Tax Act, bringing employer contributions to employee share schemes and to directors and board members into the calculations of payroll value for the purposes of assessing payroll tax. It does mean that there will be a slight increase in payroll tax receipts for the ACT government on the very reasonable basis that shares and options ought to count as pay in this context and that future payroll tax obligations could otherwise be avoided by paying increasing proportions of wages and fees as shares or options.
MR MULCAHY (Molonglo) (11.27): Mr Speaker, the opposition supports the Revenue Legislation Amendment Bill. As members would be aware, the bill is effectively in two parts. It aims to streamline the Duties Act, Land Tax Act and Rates Act to make their administration less cumbersome. The second part aims to increase the government’s revenue by extending the reach of payroll tax, but on the basis that it is addressing an anomaly. This anomaly is dealt with by expanding the definition of wages to capture the value of employee share schemes, a benefit that is now quite prevalent, particularly with larger employers in Canberra and national firms.
At present, if a person wants to seek exemption from duty on the registration of a motor vehicle, they must first go to the ACT Revenue Office to obtain an exemption certificate. They then have to go to a shopfront or motor registry for processing. The amendments to the Duties Act provide for the exemption from car registration to be obtained at the same place where the registration is processed, with no requirement for a separate certificate. I think this change makes sense and we certainly are pleased to support this amendment. However, I did raise in estimates the issue that it would be nice to see the capacity for people to deal with some motor registry issues on Saturdays, particularly in respect of licence renewal, but the minister said that would not be happening. Nevertheless, the amendments proposed make sense to us and we support them.
At present the revenue commissioner is required to calculate interest on any refund due in respect of land tax and rates and, since the calculation of interest follows a purely mathematical formula, there is no discretion. The amendments provide for any officer to do it, not only the revenue commissioner. Once again, it makes sense to us that this measure be introduced and we therefore support the amendments.
Turning to payroll tax, at present in the ACT an employee can receive shares in a company as part of a salary package and the employer does not pay payroll tax on the value of those shares. The amendments proposed by the government impose payroll tax on employer contributions to employee share schemes—that is, the value of the shares is to be included as part of wages.
It is probably worth reflecting on a little background in relation to payroll tax. In this territory the rate is 6.85 per cent on wages and other taxable payments made by an employer when the Australia-wide payroll payments by that employer exceed $1.250 million per year. I would remind members that the Liberal Party policy as it presently stands is to reduce the payroll tax burden by raising that threshold to $2 million.
I must say that the issue of payroll tax is one that has always troubled particularly larger employers—those who carry most of the jobs in the private sector. I personally have