STATUTES AMENDMENT (BUDGET 2008) BILL

Committee Stage

In committee.

Clause 1.

The Hon. R.I. LUCAS: I thank the minister. In the early hours of this morning, the minister placed on the record some responses to questions that I raised in relation to the cost of payroll tax changes. There really is just one issue that I want to clarify in terms of the minister's response, based on the advice that he will have from his adviser. Last night, one of the questions I put was: what would be the cost of increasing the payroll tax threshold to $800,000, as is being advocated by Business SA and other lobby groups? The minister's response based on advice was:

I can inform him—

that's me—

that the cost of that is estimated at $46 million in 2008-09.

I also asked about the budget costs of increasing the threshold ultimately to $600,000, as is proposed in this bill, and the minister referred me to Budget Paper 3, page 3.2. If I look at 2009-10 rather than 2008-09, the budget indicates that the cost of increasing the threshold from $504,000 to $600,000 for the financial year 2009-10 is an aggregate of $10.8 million and $9.4 million, which is $20.2 million.

My question to the minister is: given that that is proposed, to take that from $600,000 then to $800,000 as Business SA is advocating, am I right in assuming that the cost of that additional increment will be the difference between $46 million and $20 million, which is about $26 million (albeit that it is one year later than the $46 million estimated for 2008-09, and there may well be a 3 per cent inflator or something like that which might need to go on the figure, but we can just disregard the inflator for the moment)? Am I right in assuming that essentially what the Treasury is saying is that the cost of going from $600,000 to $800,000 from 2009-10 or any year onwards will be approximately $46 million (or whatever that inflated figure will be) less the $20 million or the inflated figures we see for 2010-11 or 2011-12 in those particular years?

The Hon. P. HOLLOWAY: My advice is that, if we are increasing it from a threshold of $552,000, the cost to $800,000 would be $45.8 million. So that is the increment, from $552,000 to $800,000. If it were to go from $600,000 to $800,000, that would have a cost of $37.7 million.

The Hon. R.I. LUCAS: And for which financial year is that estimate: 2008-09 or 2009-10?

The Hon. P. HOLLOWAY: The sum of $45.8 million would be the cost in 2008-09. The $37.7 million would be the cost in 2009-10.

The Hon. R.I. LUCAS: I think I have clarified that, so if I can just repeat it and ask for the minister's confirmation: that, in essence, looking at the financial year 2009-10, if this government were to increase the $600,000 threshold to $800,000, then the cost to Treasury in the budget would be $37.7 million. Is my understanding of that cost of $37.7 million in that particular year therefore correct?

The Hon. P. HOLLOWAY: Yes, that would be the 2009-10 cost. You would be at the $600,000 threshold then, so if you were to increase it in 2009-10, it would cost an additional $37.7 million.

Clause passed.

Clause 2.

The Hon. R.I. LUCAS: I am not sure what particular clause this would be under, because I have only just become aware in the past 20 minutes (having read the Hansard report of the taxation administration bill which has just been introduced in our chamber) that, at very late notice yesterday, the Treasurer introduced an amendment without any discussion with the opposition indicating that there was something which should have been done in this particular bill in relation to the payroll tax monthly changes.

As I said, I have only read this because by happenstance I stumbled across the Hansard debate yesterday in the House of Assembly on the Statutes Amendment and Repeal (Taxation Administration) Bill and the shadow minister said he had not been advised of this. The Treasurer just dumped an amendment in the house and said, 'Whoops! We should have done this earlier.' I ask the minister: whatever the government is now doing in the administration bill, why was that not included in this bill, and exactly what is the government up to in the taxation administration bill?

The Hon. P. HOLLOWAY: My advice is that the administration bill, which only just came to this council yesterday, was introduced before the budget, and as the budget bill is now likely to be passed first (because we are unlikely, obviously, to get to the taxation bill before we resume in September), the original bill does need some adjustment. I am advised that it is a technical amendment in relation to the threshold.

The Hon. R.I. LUCAS: Yes, but my understanding is that the taxation administration bill was introduced, as the minister has indicated, prior to the budget, but this bill was introduced with the budget. My quick reading of the taxation administration amendment is that it seems to include the monthly equivalent of the thresholds, that is, the threshold divided by 12 in a series of amendments. Why was the amendment that is now proposed to the taxation administration bill not included in this bill?

The Hon. P. HOLLOWAY: My advice is that it was really just a timing issue. It was easier to deal with; because the budget was likely to go through first it was easier to put the budget lists through as they were and then, when the Statutes Amendment and Repeal (Taxation Administration) Act goes through—

The Hon. R.I. LUCAS: The administration bill was introduced before the budget.

The Hon. P. HOLLOWAY: Yes, it was, but it has obviously taken longer to get through the House of Assembly; therefore there will not be time to get it through both houses before the break, but we hope this bill and the budget bill will be. It was just a timing issue. It could have been done either way but, because of those timing issues, it was decided to do it in the order in which it is being done. We can deal with the new taxation administration bill when we come back in September.

The Hon. R.I. LUCAS: I will just clarify that: the government's position is that the administration bill, and therefore this particular amendment, do not need to be considered until September?

The Hon. P. HOLLOWAY: Yes; that is my advice.

Clause passed.

Remaining clauses (3 to 10), schedule and title passed.

Bill reported without amendment.

Third Reading

Bill read a third time and passed.