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Friday, 30 October 1970

Mr Crean asked the Treasurer, upon notice:

(1)   What was the amount of payroll tax collected from (a) State governments, (b) local governing bodies and (c) other State authorities from 1st January 1969 to 31st December 1969.

(2)   What was the amount collected separately from education departments in each of the States for the same period.

(3)   ls payroll tax levied on teachers' salaries where teachers are employed by State education departments but not on teachers' salaries where they are employed in non-government schools.

(4)   If so. what is the reason for the different treatment.

Mr Bury - The answer to the honourable member's question is as follows:

(l)   For purposes of this reply, State authorities have been divided into four categories:

(i)   State departments whose payroll lax liability is met by the relevant State Treasury. The mainland State railways are included in this group.

(ii)   State authorities. other than departments included in (a) and other than those classified as semi-government or local authorities under (c) and (d) below. Examples in this category are universities, technical colleges, forestry commissions and pastures protection boards, the New South Wales Departments of Main Roads and Government Transport, and the Country Roads Board in Victoria.

(iii)   Semi-government authorities - that is, those authorities with separately analysed accounts which are classified as semi-governmental authorities for national accounts purposes by the Commonwealth Statistician (including Tasmanian railways). See answer to Question No. 2146.

(iv)   Local government authorities - bodies set up under Local Government Acts to carry out functions in defined areas. The County Councils in New South Wales are included in this category.

The Commissioner of Taxation has provided the following estimates of payroll tax paid by these authorities in 1969.


(2)   Payroll tax collections from State education departments are not recorded separately. However, the following estimates of payroll tax attributable to salaries and wages paid by the various State education departments based on information contained in State budget papers, have been prepared in respect of salaries and wages paid during 1969:

(3)   Payroll tax is levied on the salaries paid to teachers employed by State education departments but is not levied on the salaries of teachers employed by schools and colleges run by churches. The salaries paid by other nongovernment schools and colleges is run by a nonprofit body, provides education not above secondary level and is not a technical school.

(4)   The liabilities and exemptions in the law arise not by virtue of the category of the schools concerned but because of the status of the various bodies which conduct them. Religious institutions have been exempt from payroll tax since its introduction and this exemption has applied to schools conducted by them. In 1966, exemption was extended to non-church, non-government schools and colleges (other than technical schools) run by non-profit bodies and providing education not above secondary level. State schools are part of the structure of services provided and financed by the State governments, and the Commonwealth Government has indicated that the payment of financial assistance grants to State governments on the basis proposed at the June 1970 Premiers* Conference is on the understanding that those governments and their authorities continue to meet payroll tax on wages and salaries of their employees. This condition is the same as that which applied under the two previous financial assistance grants arrangements.

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