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Thursday, 5 December 1985
Page: 2993


Senator WALSH (Minister for Finance)(11.26) —I am waiting for some further advice on that question. I make the point that a subcontractor by definition cannot be an employee. If a subcontractor becomes an employee and is regarded by the taxation law as an employee, the payments from the prime contractor or the principal to the subcontractor would have to be subject to pay as you earn deductions, which they are not. As I understand it, and this is subject to confirmation and further advice from the advisers sitting beside me, in the circumstances the honourable senators outlined relating to a genuine subcontractor who would not be subject to withholding tax either, the subcontractor's employees would not have access to the dining facilities which may be available to the employees of the principal contractor or the principal firm.


Senator Messner —That is absurd.


Senator WALSH —Senator Messner may think it is absurd, but a subcontractor is a subcontractor and not an employee.