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Wednesday, 27 October 1971
Page: 2611

Mr CREAN (Melbourne Ports) - In some respects I suppose this Bill might be described as a technical measure arising out of the fact that some weeks ago this Parliament legislated to transfer from the Commonwealth to the States the responsibility for collecting the tax known as payroll tax. I think, in a strict constitutional sense, there would be some difficulty in levying that tax, as a State tax, upon Commonwealth instrumentalities, but apparently the Commonwealth Government is doing what it regards as the decent thing for once and is voluntarily making liable for a tax that constitutionally could not be collected a set of bodies which is listed in a document called the 'Attachment'. This list includes such bodies as the Australian Canned Fruits Board, the Australian Coastal Shipping Commission and the Australian Tobacco Board, to mention only a few. Apparently since that list was first circulated there have been a number of second thoughts about it because I received a letter dated 8th October from the Minister for the Army (Mr Peacock) in his capacity as Minister assisting the Treasurer in which he indicated that the Treasurer (Mr Snedden) had asked him to forward to me an amended copy of that list. The amendments concern primarily the Commonwealth Banking Corporation which is divided into 3 divisions - the Commonwealth Development Bank of Australia, the Commonwealth Savings Bank of Australia and the Commonwealth Trading Bank of Australia. These have been listed separately and the letter from the Minister for the Army explains this situation by stating:

It was drawn to the Minister's attention by Treasury officials that the Commonwealth Banking Corporation and its 3 member banks are staffed by officers of the Commonwealth Banking Corporation Service. For the purposes of Commonwealth payroll tax the corporation is, therefore, the registered employer. However, the Corporation has no income of its own- lt is rather astonishing that that great body has no income of its own - and its total expenses, including taxes, are met by the 3 member banks. Although the inclusion of the 3 member banks in sub-list (i) represents the de facto position, the amendment proposed is more correct.

The inclusion of the Australian Services Canteens Organisation in sublist (ii) of the list appearing in Hansard follows clarification of the Organisation's registration under Commonwealth pay-roll legislation.

That is signed for the Minister.

Mr Peacock - You were- grateful to get it, though?

Mr CREAN - Very grateful to get it but a little disturbed or bemused, I suppose, by what is meant by this passage in the Minister's second reading speech:

The Bill does not itself make the authorities to which it applies liable to pay State pay-roll tax. It merely removes the barrier to payment of State payroll tax that exists in the constituting legislation of a number of Commonwealth authorities.

The Minister might be able to clarify for me in basic English what that is supposed to mean. But 1 think it only underlines what we suggested when these measures were introduced, that it is a rigmarole or a paraphernalia, that basically this tax would have been much more easily collected at the Federal level by the Commonwealth and whatever administrative arrangements were needed to be made about reimbursing could have been made better in that way. However the Commonwealth chose to regard this as a growth tax, which the States were anxious to put their hands upon, and they have already increased it by 40 per cent from 2\ per cent to 3± per cent. As I have said, the Commonwealth as a gracious act is bringing its own instrumentalities into the State net. Those organisations which previously had been taxed when the tax was a Commonwealth tax are now being voluntarily taxed by the State in which they operate. As 1 say, it is a highly technical matter. We offer no objection to the Bill, but I merely want to point out the rather confusing situation that it seems to raise.

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