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Thursday, 11 May 2000
Page: 16254


Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (9:54 AM) —I move:

That the bill be now read a second time.

The package of bills introduced today provides legislation to give effect to the government's announcement of 5 October 1999 in relation to sales tax exemption for industrial safety equipment. Certain goods such as masks, respirators, shields, goggles, visors, helmets and machine guards are exempt from sales tax as items of industrial safety equipment. The kind of equipment intended to be exempt as industrial safety equipment has always been narrow. However, two decisions of the Federal Court have held that the scope of the exemption was broadened when the sales tax law was streamlined from 1993.

As a result of these decisions, it is possible that a wide range of goods could now qualify for sales tax exemption as industrial safety equipment. Most of this equipment is only used to a minor extent by persons engaged in industrial operations. The equipment is mainly used outside industrial operations and does not have a primary purpose of protecting persons engaged in industrial operations.

The government announced on 5 October 1999 that the sales tax law would be amended so that, to qualify for sales tax exemption, goods would need to be of a kind that were mainly used to protect persons engaged in industrial operations. Refund claims lodged on or after 5 October 1999 which do not meet this criteria would be denied. The government was concerned that refunds should not result in windfall gains for retailers who have passed the cost of the sales tax on to their customers. Accordingly, refund claims lodged before 5 October 1999 that meet the requirements of the existing exemption would only be paid where it can be shown that the benefit of the credit has passed to the end consumer.

The package of bills introduced today will achieve the government's decision by modifying the sales tax law from commencement of the streamlined sales tax law in 1993 to ensure that the law reflects the intention of parliament at that time, and thus will prevent significant risk to the sales tax revenue. Liability and appeal rights of taxpayers will be adjusted to achieve the date of effect of 5 October 1999.

Full details of the measures in this bill are contained in the bill and the explanatory memorandum.

I commend the bill and present the explanatory memorandum to this bill, the Sales Tax (Excise) (Industrial Safety Equipment) Bill 2000, the Sales Tax (General) (Industrial Safety Equipment) Bill 2000 and the Sales Tax (Industrial Safety Equipment) (Transitional Provisions) Bill 2000.

Debate (on motion by Mr Melham) adjourned.