Page 2830 - Week 07 - Thursday, 7 June 2012
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the speech that I should have given on this bill. However, as we support both of them, it is not the worst mistake that has ever been made. For those who thought that my talking about business and subleases did not make a lot of sense, that was because it was the wrong one.
As I mentioned when I spoke to the landholder amendment bill, it makes sense to align us with New South Wales. It was an unnecessary burden. Given that land is our major asset and that the community benefit from investment in new infrastructure, particularly in our new town centres, we agree that we should not be putting ourselves at a disadvantage and discouraging investment in the ACT.
Getting back to the Duties Amendment Bill 2012 (No 2), it is a sensible change to remove liability for duty goods associated with the sale of a business and a sublease. As this is a cognate debate—so I cannot make another mistake, hopefully—I will deal with our comments on the Rates and Land Tax Legislation Amendment Bill. We also agree that this is a sensible correction to what was clearly the reverse situation when rates were being levied on activities which were not permitted on the land. The Greens support both bills.
MR BARR (Molonglo—Deputy Chief Minister, Treasurer, Minister for Economic Development and Minister for Tourism, Sport and Recreation) (12.20), in reply: Once again I thank the opposition and the Greens for their support. These bills possibly fall within the category of dull but very worthy, Mr Speaker, in that they seek to remove small nuisance taxes from the ACT business community as imposed under the Duties Act 1999.
In accordance with the intergovernmental agreement on the reform of commonwealth-state financial relations, over a number of years duty was abolished on a range of business-related transactions. Those relevant to this amendment were the transfer of non-real core business assets, abolished on 1 July 2006, and the creation of short-term subleases of less than 30 years, which was abolished on 1 July 2009. The duty on transfers of subleases, however, was retained.
Usually when a business is sold the sublease is also transferred to the new owner, along with the sale of the goods of the business. The value of a short-term sublease is nominal and only attracts the minimum duty of $20. Currently under the act business goods such as coffee machines, fridges or ovens, which are transferred with a sublease, attract ad valorem duty. For example, if a business owner transferred goods in conjunction with a sublease, the sublease transfer component would only attract the nominal $20 duty.
However, duty would also be charged on the total value of the goods transferred, which may amount to hundreds of dollars. Given that duty on transfer of business assets was abolished in 2006, abolishing duty on short-term subleases removes this nuisance tax. It also removes the anomalous duty on goods transferred with these short-term subleases. However, transfers of long-term subleases, those with a term greater than 30 years, and their associated goods will remain liable for the duty.
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