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Wednesday, 7 September 1983
Page: 513


Mr KEATING (Treasurer)(6.21) -by leave-I move:

(1) After clause 2, page 2, insert the following new clause:

Prefabricated buildings

''2A. Section 6A of the Principal Act is amended by omitting sub-section (2) and substituting the following sub-section:

'(2) In this section-

''pre-fabricated building section'' does not include pre-fabricated duct work or pre-fabricated channelling, being duct work of channelling of a kind used in forced draught ventilation or air-conditioning systems;

''taxable goods'', in relation to a pre-fabricated building or pre-fabricated building section, means goods that, if sold separately, would not be covered by any item in the First Schedule, and, in a case where there are incorporated in the building or building section goods (in this definition referred to as the '' relevant goods''), being-

(a) duct work or channelling of a kind used in forced draught ventilating or air-conditioning systems; or

(b) fittings, accessories or attachments for duct work or channelling of a kind used in forced draught ventilating or air-conditioning systems,

includes the relevant goods.'.''.

(2) Page 7, Schedule, paragraph 17 (a), omit proposed paragraphs (a) and (b) of sub-item 82 (1), substitute the following paragraphs:

''(a) asphalt tiles, cork tiles, linoleum tiles, rubber tiles, vinyl tiles or other similar floor tiles;

(b) channelling used for slides or water slides;

(c) vinyl liners, fibreglass liners or other similar liners for swimming pools;

(d) components of, or goods designed to form part of, swimming pools, including panels and sheeting;

(e) piping or tubing;

(f) duct work or channelling of a kind used in forced draught ventilating or air-conditioning systems; or

(g) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air-conditioning systems''.

(3) Page 7, Schedule, after clause 17 insert the following new clause:

''17A. After item 82 in the First Schedule the following item is is inserted:

'82A. (1) Piping or tubing of a kind used exclusively, or primarily and principally, in the construction or repair of, and wrought into, or attached to, so as to form part of, buildings, fixtures, structures or other works, but not including piping or tubing being-Nos. 1 to 9.

(a) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems;

(b) piping or tubing of a kind used as duct work or channelling in forced draught ventilating or air conditioning systems;

(c) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems;

(d) piping or tubing of a kind used for slides or water slides;

(e) piping or tubing of a kind used in or in connection with beer drawing plant ; or

(f) rubber hose or rubber tubing or any hose or tubing of a kind used principally for any of the purposes for which rubber hose or rubber tubing is ordinarily used

'(2) Fittings (and parts therefor) for goods covered by sub-item (1), including taps, cocks, valves, faucets, inspection boxes and doors, clear outs, floor wastes, grates, gullies, traps, syphonic connections, pipe heads, shoes, stop blocks, meters and meter covers, hydrants and hydrant covers, hydrant pit frames and covers, valve covers, valve pit frames and covers, and air valve frames and covers, but not including-Nos. 1 to 9

(a) components of, or goods designed to form part of, swimming pools; or

(b) filtering appliances or filtering equipment, being appliances or equipment of a kind installed in or in connection with swimming pools

'(3) Piping or tubing of a kind used exclusively, or primarily and principally, as part of fixed electrical installations in consumers' premises. Nos 1 to 9

'(4) Materials for use as integral parts in the construction or repair in situ of piping or tubing covered by sub-item (1) or (3), including manholes and inspection shafts used in connection therewith. Nos. 1 to 9'.''.

(4) Page 7, Schedule, paragraph 18 (b), omit proposed paragraphs (f) and (g) of sub-item 83 (2), substitute the following paragraphs:

''(f) vinyl liners, fibreglass liners or other similar liners for swimming pools;

(g) components of, or goods designed to form part of, swimming pools, including panels and sheeting;

(h) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; or

(j) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems''.

(5) Page 8, Schedule, paragraph 18 (d), omit proposed paragraphs (c) and (d) of sub-item 83 (3), substitute the following paragraphs:

''(c) vinyl liners, fibreglass liners or other similar liners for swimming pools;

(d) components of, or goods designed to form part of, swimming pools, including panels and sheeting;

(e) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; or

(f) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems''.

(6) Page 8, Schedule, clause 19, omit the clause, substitute the following clause:

''19. Item 84 in the First Schedule is amended-

(a) by omitting sub-item (1) and substituting the following sub-item:

'(1) Metal building materials (including girders, rods, bars, wire, sheets, mesh, lathing and fabricated units composed of any of those goods, and attachments for such units) for use in the construction or repair of, and to be wrought into, or attached to, so as to form part of, buildings or other fixtures , but not including-Nos. 1 to 9'; and

(a) liners for, components of, or goods designed to form part of, swimming pools, including panels and sheeting;

(b) channelling used for slides or water slides;

(c) piping or tubing;

(d) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; or

(e) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems

(b) by inserting in sub-item (2) ', duct work or channelling of a kind used in forced draught ventilating or air conditioning systems, or fittings, accessories or attachments for, components of, or goods designed to form part of, such duct work or channelling' after 'equipment'.''.

(7) Page 8, Schedule, clause 20, omit proposed paragraphs (b) and (c) of sub- item 86 (1), substitute the following paragraphs:

''(b) liners for, components of, or goods designed to form part of, swimming pools, including panels and sheeting;

(c) channelling used for slides or water slides;

(d) piping or tubing;

(e) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; or

(f) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems''.

(8) Page 8, Schedule, after clause 20, insert the following new clause:

''20A. Item 88 in the First Schedule is amended by adding at the end of sub- item (1) 'or fittings, accessories or attachments for, components of, or goods designed to form part of, such systems'.''.

(9) Page 11, Schedule, after clause 43, insert the following nexw clause:

''43A. Item 2 in the Third Schedule is omitted and the following item is substituted:

'2 Parts, fittings and accessories for goods covered by item 1, but not including-

(a) duct work or channelling of a kind used in forced draught ventilating or air conditioning systems; or

(b) fittings, accessories or attachments for, components of, or goods designed to form part of, duct work or channelling of a kind used in forced draught ventilating or air conditioning systems'.''.

(10) Page 11, Schedule, clause 47, omit proposed item 11, substitute the following items:

'' '11 (1) Vinyl liners, fibreglass liners or other similar liners for swimming pools, being swimming pools that are fixtures

'(2) Goods, including panels and sheeting, designed to form the walls or floors , or designed to form parts of the walls or floors, of swimming pools, being swimming pools that are fixtures, but not including-

(a) filtering appliances or filtering equipment; or

(b) other goods (other than coping) designed to be attached to those walls or floors

'12 Containers for goods covered by this Schedule.'.''.

As a number of amendments to the Sales Tax (Exemptions and Classifications) Bill have been moved by the Government it may suit the convenience of the Committee if I now speak to all of them. The amendments cover two areas and constitute the Government's response to representations and to a technical review made by the Australian Taxation Office. One group of amendments concerns piping and tubing and aims to better express our policy intentions in this area. The other group of amendments will reduce from 20 per cent to 7 1/2 per cent the sales tax that the Bill proposes to introduce on liners and certain other components for swimming pools.

As to the clarifying amendments, clause 8 in the Schedule to the Bill as now framed will confine the existing specific exemption under item 18 for piping, tubing, channelling and guttering to that for use for irrigation, water supply, drainage or sewerage purposes. If it were left at that, a range of piping and tubing that the Government does not intend to tax would have to depend for exemption on certain overriding general exemptions the practical application of which may involve some difficulty and, in some instances, not go as far as required.

Accordingly, it is proposed that there be inserted in the sales tax law a new specific exemption item 82A that will maintain exemption for those goods which the Government did not intend by the amendments to exemption item 18 to make taxable. In short, the new item will maintain exemption for piping and tubing, and fittings therefor, of a kind used primarily and principally in the construction of buildings, fixtures, structures and other works. Besides building and other structural pipes, the item will exempt pipes for use in the construction of oil and gas pipelines and will exempt copper, aluminium and brass pipe where it is of a kind used exclusively or primarily and principally in the construction of buildings, fixtures, structures or other works.

In proposing changes in this area the Government had it in mind that certain kinds of piping and tubing such as air-conditioning duct work and piping and tubing such as used with beer drawing plant should not enjoy exemption from sales tax. Air-conditioning plant of which duct work forms an integral part is already subject to sales tax, and apart from non-business air-conditioning, all attracts income tax plant depreciation allowances. The new item is framed so as to tax other general purpose piping and tubing that is not of the kind used in the building and construction industries.

Some of the other amendments now proposed are consequential upon, and supportive of, these basic intentions. In part they aim to ensure that exemptions intended to remain will continue and, in part, they are designed so that the intended taxing of other items will be effective. Altogether, they do not involve any change in the Budget estimates of sales tax yields.

I turn now to the amendments that concern swimming pools. The package of sales tax measures introduced on Budget night involved introduction of tax of 20 per cent on pool filters and related equipment, on fibreglass and other pool liners and certain other pool components and on pool chemicals that had previously unintentionally attracted exemption under an item to exempt chemical used in agriculture. On review, the Government stands by the thrust of these amendments but has been persuaded by industry representations that it would be inappropriate, in a context where ordinary building materials used in pool construction remain exempt, to introduce a tax of 20 per cent on pool liners and other components specifically designed for pools. Instead, we propose a rate of 7.5 per cent.

The amendments now proposed will tax at 7.5 per cent, rather than 20 per cent, those liners and component parts for swimming pools that were tax exempt before the Budget, on the basis that the pools are fixtures. Broadly, pools in excess of 9,000 litres capacity are regarded by the Taxation Office as fixtures. Liners and component parts for swimming pools of less than 9,000 litres capacity, not being viewed as fixtures, will remain taxable at the pre-Budget rate of 20 per cent, and that rate will apply to filters, chemicals, pool ladders, hand skimmers, chlorine dispensers, salt, pool covers and hand leaf scoops and rakes for use with swimming pools of any capacity.

While the 7.5 per cent rather than 20 per cent rate on liners and other components will of course yield less revenue, that loss is made up by a now expected higher yield than the Budget estimate of yield from a tax of 20 per cent on filters and related equipment. The admendments are more fully explained in the supplementary explanatory memorandum that is being circulated to honourable members and I commend all the amendments to the Committee.