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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2008-07-23 Daily Xml
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STATUTES AMENDMENT AND REPEAL (TAXATION ADMINISTRATION) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 7 May 2008. Page 3230.)

Mr GRIFFITHS (Goyder) (12:01): I confirm that I am the lead speaker for the opposition on this bill. Several members will speak; however, there will be no need to ask any questions before we proceed to committee. This bill was introduced, I think, on behalf of the Treasurer by the Hon. Paul Caica on 7 May 2008. Very promptly after that—and I am grateful for the support given by the Treasurer's office—a briefing was provided to me by Mr Graeme Jackson and Mr Carlo Mancini; and, as normal, those staff members were very thorough, so I thank them for that.

As I understand it, the intention of the bill is to make amendments to the Emergency Services Funding Act 1998, the Land Tax Act 1936, the Pay-roll Tax Act 1971, the Stamp Duties Act 1923 and the Taxation Administration Act 1996 and to repeal the Taxation (Reciprocal Powers) Act 1989. All these, I believe (and certainly it reflects the briefing and the second reading explanation), indicate that this bill is in line with the attempts by government to reduce red tape for business by 25 per cent by mid 2008. Certainly, members on this side of the house who have dealings with the business community (and that is all of us) know that, quite often, one of the strong pushes to us is to ensure that we try to make business transactions with government as simplified as possible, so any effort that will do that is supported by this side of the house.

I am advised that the bill is an attempt to remove all redundant provisions. The majority of redundant provisions will be removed from the Stamp Duties Act, and that particularly relates to provisions within the listed marketed securities, but that is not stamp duty. It will make the act easier to read and create less confusion for the business community; and, again, I enforce the fact that that is obviously a good thing and something that we support quite strongly. The bill also amends the Taxation Administration Act 1996 to include provisions that provide an administrative framework to allow tax investigations to be conducted by taxation officers between state and territory borders.

Again, this is important. I think that, as we exist now, very clever accounting firms are providing advice often to large customers, and transactions are conducted across many states in Australia, which means that it is important that we have opportunities for the states to carry out investigations across their own borders, or in liaison with state officers from other states. While every effort is made to minimise tax from business from an individual point of view, there is also clearly a responsibility for taxation to be paid where it is appropriate. While there are people who make a living out of being very clever in terms of how transactions and accounts are disposed, I think it is important also that we ensure that the taxation provisions we have enshrined in our legislation allow for the appropriate level of tax to be paid in South Australia.

From my reading of the second reading explanation, I hope I understand properly that South Australia and Victoria are currently the only jurisdictions that retain independent reciprocal taxation powers legislation. So, that will be improved. The benefits of the consolidation of investigatory powers in the Taxation Administration Act will include greater interjurisdictional consistency and modernisation of the language and structure of the provisions and provide the opportunity to review and update statutory requirements.

I noted also in the briefing paper (and it was a question I asked during the briefing) the fact that the market rate of interest set under the Taxation Administration Act has previously been linked to the rate applicable under section 214(8) of the commonwealth Income Tax Assessment Act 1936. The commonwealth ceased publication of that market rate in 1999. Under the previous system the Treasurer was required each year to gazette what the interest market rate was intended to be, and it is now proposed under this legislation for that market rate of interest to be tied legislatively to the average rate of the 90-day bank accepted bill rate prescribed by the Reserve Bank. At least that provides for consistency across the nation, so that is a positive move.

The bill also amends the Taxation Administration Act to provide for an administrative framework to allow tax investigations to be conducted. I note also that it amends the Emergency Services (Funding) Act of 1992 in relation to the ESL levy (to which we were referring earlier in the debate on a motion moved by the Chairperson of the Economic and Finance Committee), to align the administrative processes under that act with those contained within the Taxation Administration Act. I am advised that, regardless of the amendments made across all these acts, it will be revenue neutral. One of the first questions I asked on this matter related to whether there was a potential increase or decrease in revenue to government as a result of these changes, and the advice provided to me by the Department of Treasury and Finance officers was that there was no such potential and that it is a revenue-neutral step.

During the briefing, the question was asked concerning what consultation the government had undergone in preparing the bill. I was advised that the Law Society, the Law Council and the Tax Institute were asked to determine whether the suggested amendments and content were appropriate, and the advice that came back was that, yes, that is the case. Trying to be thorough, as we are, we spoke to some people who have a vast amount of taxation expertise, and the advice that came back was that broadly they were supportive of this measure, and it was suggested that the opposition support the bill without any need for amendment. It is as easy as that.

We hope for a swift passage of the bill through the house and trust that the benefits that will flow through to the business community resulting from a simplification and reduction of the red tape that applies to them will in turn assist the economy of our great state.

Mr GOLDSWORTHY (Kavel) (12:07): I am pleased to speak in support of the bill. Obviously the member for Goyder has outlined the purport of the legislation quite accurately, but I will highlight a couple of points. The bill amends the Taxation Administration Act 1996 to include provisions for an administrative framework to allow tax investigations to be conducted by taxation officers beyond state and territory borders. That is an important point, because we know that the work of accounting firms and those who look after the financial matters and dealings of people out in the community goes across state and territory borders. The accounting firm that does my work was initially an Adelaide-based business but it has joined with a fairly big accounting group in Sydney and progressively they have amalgamated their businesses and now go by the name of the Sydney-based accounting firm. Their Adelaide identity has been diminished, as they are now known by the name of the larger organisation in Sydney. This is an important point that the bill looks to cover. The Hon. Paul Caica made a couple of points in his introduction of the bill on behalf of the Treasurer, and stated:

South Australia and Victoria are the only jurisdictions that retain independent reciprocal taxation powers legislation. In consolidating the provisions of the TRPA (Taxation Reciprocal Powers Act) 1989 into the TAA (Taxation Administration Act) 1996 it is therefore consistent with the arrangements in place in other jurisdictions and will reduce the number of statutes with which practitioners are required to comply.

I presume that when we talk about practitioners, that refers to those people out in the private sector and the like:

The benefits of the consolidation of investigatory powers in the TAA include greater inter-jurisdictional consistency, modernisation of the language and structure of the provisions, and have provided the opportunity to review and update statutory requirements.

The minister also went on to highlight where the bill amends the Emergency Services Funding Act 1998 (the ESL act) to align the administrative processes under the ESL act with those contained in the TAA. Obviously anything to do with emergency services funding is of particular interest to me, as a member in this place representing an area in the state that is arguably one of the highest bushfire areas in South Australia. The ESL act obviously provides for the collection of funds for the provision of emergency services in this state.

Before going to government business, in other business we were talking about the Economic and Finance Committee tabling the Emergency Services Levy report. A number of members of that committee here spoke to that motion moved by the member for West Torrens. It is critically important that we do satisfactorily resource, fund and equip our emergency services agencies in South Australia for the ongoing protection of all our communities. As the member for Goyder, the lead speaker on this side of the house, has pointed out, the state Liberals are supporting this bill and, as such, I have been pleased to make a contribution—albeit brief—to the legislation.

Mr PEDERICK (Hammond) (12:12): I, too, rise to make a brief contribution to this bill. I am pleased to see that the intent of the bill is to reduce red tape, and I wish it would go across all sectors of government, but I will speak more on that later. I note that it makes amendments to the Emergency Services Funding Act 1998, Land Tax Act 1936, Payroll Tax Act 1971, Stamp Duties Act 1923, and also the Taxation Administration Act 1996. The target of this bill is to reduce red tape, and that can only be commended. The bill also amends the Taxation Administration Act, which I have mentioned, and the Emergency Services Funding Act 1998. I note that the bill is supposedly to remain revenue neutral throughout and is aimed at making the relevant acts easier to decipher.

As a person who has been in this place for just over two years, I am well aware that every day we pass another form of legislation that appears to take away more freedoms from people, but a bill of this nature, if its design is to reduce red tape, can only be commended. I hope it does make everything easier to decipher.

I raise an issue that has been brought to my attention regarding a constituent in my electorate putting forward GST paperwork to the federal taxation body and the grief that person is going through trying to get a faceless person to pick up the issue. Every time they ring up, it involves another person and they have to go through the whole detail of the situation (which was an honest mistake made by the constituent several years ago), and it looks likely that it will go on and will probably be referred further on. It is a terrible situation for people out there who are trying to run a business when they are held up by red tape. There does not seem to be an avenue at the federal level to meet someone face-to-face to sort it out and I think that needs to be worked out, but I do commend this legislation, if it goes though. As I said before, anything to fix up red tape I am happy with.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 25 passed.

Clause 26.

The Hon. K.O. FOLEY: I move:

Page 19, line 15—Delete '—means $42,000;' and substitute:

(i) commencing on or after 1 July 2002 and ending before 1 July 2008, means $42,000;

(ii) commencing on or after 1 July 2008 and ending before 1 July 2009, means $46,000;

(iii) commencing on or after 1 July 2009, means $50,000;

I apologise to the committee for not having the amendment here, and the opposition not being briefed on it. This is a technical amendment. It is required for the payroll tax provisions in this bill due to amendments to the same provision contained in the Statutes Amendment (Budget 2008) Bill 2008, which was passed in the House of Assembly on 18 June 2008. This bill was introduced prior to the introduction of the budget, and therefore the need for an amendment was unavoidable. The amendment is necessary due to the government's decision to increase the tax-free threshold in 2008-09 and again in 2009-10. It is purely technical and aligning with the new threshold levels.

Mr GRIFFITHS: I thank the Treasurer for that explanation; and I think we were all frustrated by the fact that we were not aware of this amendment. I understand the payroll tax thresholds, but given that it was $504,000 and then $550,000, I am not sure how the $42,000, $46,000 and $50,000 figures in this actually relate. Can I have some information on that, please?

The Hon. K.O. FOLEY: It is a monthly figure; it is the threshold divided by 12.

Mr GRIFFITHS: Given the basis of that explanation and that it is a monthly figure, I can understand the reasoning for it. A preliminary comment would be that the opposition would support this, but we may reserve our position on this between the houses. But there should be no problems.

Amendment carried; clause as amended passed.

Remaining clauses (27 to 54) and title passed.

Bill reported with amendment.

Third Reading

Bill read a third time and passed.

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