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Sales Tax Legislation Amendment Bill (No. 1) 1998
Bills Digest No. 107 1998-99
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official leg al status. Other sources should be consulted to determine the subsequent official status of the Bill.
Sales Tax Legislation Amendment Bill (No. 1) 1998
Commencement: Items 1 to 6, 9 and 10 of Schedule 2 dealing with the rules for exported computer goods, commence on a day to be fixed by proclamation. Item 7 of Schedule 2, containing corrections to the classification table of computer goods, will commence retrospectively on 3 December 1998. All other provisions commence on Royal Assent.
The Bill seeks to exempt from sales tax:
- commercial space equipment, and
- certain goods imported by overseas participants and delegations attending the Sydney 2000 Olympics, Paralympics and associated events.
The Bill also makes minor amendments to the Sales Tax Assessment Act 1992 in relation to sales tax evasion in the computer industry and the re-importation of goods into Australia.
As there is no central theme to this Bill, a brief background to each major amendment will be outlined below.
In 1998 the Federal Government took several initiatives desig ned to facilitate the development of a commercial space industry in Australia. A significant aspect of this policy was the introduction of the Space Activities Bill 1998(1) aimed at regulating the licensing, safety and liability of Australian launch activities and encouraging the commercial launch industry. That Bill passed both Houses of Parliament and received Royal Assent on 21 December 1998.
A second initiative was the Government’s announcement on 23 June 1998, of the introduction of a sales tax exemption for space launch vehicles, payloads and other goods intended for launch into outer space or to be brought back from outer space. The present Bill implements this policy.
In the media release of 23 June 1998, Treasurer Peter Costello described the wholesales tax exemption as a green light for an exciting and profitable industry to establish in Australia.
The Government decision to grant as from today, a WST exemption for equipment that is actually launched provided a significant boost for the commercial space launch industry in Australia.
The media release went on:
The WST exemption would enable ventures such as the Kistler Aerospace project at Woomera to confidently take the first step in preparing infrastructure for launch operations in Australia.
De spite this initiative, it is of note that the United States-based Kistler Aerospace Corporation has recently confirmed the delaying of the Woomera project due to funding problems. Site construction was to be completed by December 1998 and the first tests carried out in early 1999. However work has not yet begun and launches are now unlikely to take place before 2000. (2)
Item 2 of Schedule 1 of the Bill adds a new item 196 to Schedule 1 of the Sales Tax Assessment Act 1992 , thereby exempting from sales tax a range of space objects which are or are intended to be launched into or brought back from outer space. Space objects consist of launch vehicles, payloads and goods marked as or used as parts for payloads and launch vehicles [Item 2 Schedule 1] . It is of note that the term ‘launch vehicles’ refers only to objects launched into outer space. In the debate on the Space Activities Bill 1998, it was suggested that there were technical deficiencies in that Bill due to a lack of clarification of the meaning of ‘outer space’. It was argued that the term ‘outer space’ should be defined to include objects launched into sub-orbital flights and low Earth orbit, in addition to those launched into outer space.(3)
Similarly with this Bill, it might be argued that the sales tax exemption should apply to objects launched into sub-orbital flights and low Earth orbit, in addition to those launched into outer space.
Item 2 of Schedule 1 of the Bill adds a new item 197 to Schedule 1 of the Sales Tax Assessment Act 1992 , thereby exempting from sales tax certain goods imported by overseas participants and delegations attending the Sydney 2000 Olympics, Paralympics and associated events.
According to the Bill’s Explanatory Memorandum, the rationale for the proposed amendment is a commitment to the decision of the Ministerial Committee of the Sydney 2000 Games notified in the Committee’s Minute of 27 August 1997.(4)
The measure mirrors and complements a duty exemption provided by item 64 in Schedule 4 of the Customs Tariff Act 1995 which received bipartisan support in its passage through the Parliament in late 1998.(5)
The Explanatory Memorandum to the Bill states that the exemption from sales tax will not apply to goods for sale, alcohol and tobacco products, motor vehicles and television equipment.(6) However item 64 in Schedule 4 of the Customs Tariff Act 1995 does not specify a listing of exempt goods, but rather defines the exemption as applying to:
[g]oods, as prescribed by by-law, imported by, or on behalf of, non-Australian Olympic and Paralympic Family members, as defined by by-law, for use in, or for purposes related to […the Sydney 2000 Olympic Games, the Sydney 2000 Paralympic Games and related trial and cultural events].
While the Customs Tariff Amendment Bill No.1 1998 received bipartisan support in its passage through the Parliament, an Opposition speaker on that Bill, the Hon. Stephen Martin, did raise the question of what constitutes the Olympic Family. According to his advice from the Australian Customs Service, the Olympic Family consists of IOC members, athletes, officials, host city delegations, accompanying persons and the media from all participating countries. In all, this is approximately 65,000 personnel connected to the Sydney Olympics, the Paralympics, and related trial and cultural events.(7)
1. This Bill became the Space Activities Act 1998.
2. ‘US Woomera project st alled on the pad’, Australian Financial Review, 4 January 1999, p. 7.
3. Space Activities Bill 1998, Bills Digest No. 34, 1998-99, pp. 7-8.
4. Sales Tax Legislation Amendment Bill (No.1) 1998, Explanatory Memorandum, p. 13.
5. Item 64 of Schedule 4 was added to the Customs Tariff Act 1995 by the Customs Tariff Amendment Act No.1 1998.
6. Sales Tax Legislation Amendment Bill (No.1) 1998, Explanatory Memorandum, p. 14.
7. Parliamentary Debates (Hansard), House of Representatives, 2 June 1998, p. 4471.
Mary Anne Neilsen
9 February 1999
Bills Digest Service
Information and Research Services
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