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PAYROLL TAX BILL 2008 (No. 22)

Second Reading

[11.40 a.m.]

Mr BARTLETT (Denison - Premier) - 2R) - Mr Deputy Speaker, I move -

That the bill be now read the second time.

This bill implements the commitment given by the Government in March of last year to harmonise the legislation and administration of payroll tax arrangements in Tasmania with those that apply in New South Wales and Victoria. Since that commitment was made, South Australia and Queensland have both committed to largely harmonise their payroll tax arrangements with the New South Wales/Victorian 'standard'.

Almost 70 per cent of registered payroll taxpayers in Tasmania also operate in other Australian jurisdictions and the Government is keen to reduce the compliance and business costs faced by Tasmanian businesses, which is considered an integral part of supporting jobs and economic growth. Therefore, the implementation of consistent payroll tax administration arrangements from 1 July 2008 will represent a significant benefit to those taxpayers as it will be easier for taxpayers and financial advisers operating across jurisdictions.

Mr Deputy Speaker, this bill also provides benefits to businesses operating solely in Tasmania. Streamlining allowances with Australian Tax Office rates and the introduction of new exemptions will reduce red tape and deliver savings to the business and not-for-profit sectors.

The bill is a rewrite of Tasmania's Pay-roll Tax Act 1971 and has been drafted to achieve harmonisation with the consistent payroll tax arrangements that were implemented in New South Wales and Victoria from 1 July 2007. The bill does not alter Tasmania's competitive rate and generous tax-free threshold, with Tasmania retaining control of these aspects of the payroll tax regime, in line with the harmonised model. Otherwise, the provisions of the body of the bill are virtually identical to the New South Wales and Victorian Payroll Tax Acts, with only a small number of Tasmania-specific arrangements in Schedule 2. The adoption of identical legislative provisions is vital if the benefits to taxpayers from harmonisation are to be realised.

Mr Deputy Speaker, in moving to the harmonised payroll tax model, there are a number of changes relative to the current payroll tax arrangements. Some of the key changes include:

· the inclusion of employee share acquisition schemes in the payroll tax base to ensure consistent treatment of all forms of remuneration;

· adopting consistent and increased exemption rates for motor vehicle and accommodation allowances, linked directly to rates set by the Australian Tax Office;

· the introduction of a definition of 'wages' that is consistent with the definition applying in New South Wales and Victoria;

· adopting consistent grouping provisions, including the introduction of tracing provisions to capture both direct and indirect controlling interests;

· clarifying that the current grouping treatment of agencies, government business enterprises and State-owned companies will continue into the future and, for doubt removal purposes, retrospectively confirming this treatment for the period that reassessments could be made under the Taxation Administration Act 1997;

· a lower gross-up factor for calculating the value of fringe benefits subject to payroll tax for all payroll tax payers;

· the introduction of new exemptions for payments made to employees on maternity leave and adoption leave;

· the introduction of new exemptions for wages paid to volunteer firefighters, volunteer emergency workers and to Aboriginal persons involved in Community Development Employment Projects; and

· expanding current public benevolent and religious exemption arrangements to also cover not-for-profit organisations in relation to employees engaged in work for charitable, religious, philanthropic, benevolent or patriotic purposes.

Mr Deputy Speaker, the adoption of consistent grouping provisions with respect to controlling interests across businesses is an important anti-avoidance arrangement and having this consistent across jurisdictions will be a positive outcome for both businesses and the community. On the other hand, the widening of the current exemption arrangements will provide a significant benefit to a number of volunteer organisations and not-for-profit businesses operating in the State and will recognise the important contribution that these sectors make across the Tasmanian community.

For instance, these changes will mean that not-for-profit community-based childcare centres that are currently paying payroll tax may be exempted from 1 July 2008 under the expanded not-for-profit exemption provisions, provided they meet certain organisational and operational requirements. Alternatively, not-for-profit childcare centres may also be exempted under the education and training exemption provisions if they meet certain staff and curriculum requirements.

The implementation of harmonised payroll tax arrangements will complement previous strategies implemented by the Government to streamline taxation administration arrangements in Tasmania, such as the rewrite of stamp duty legislation and the implementation of Tasmanian Revenue Online.

The Government will continue to work with other harmonised jurisdictions to maintain legislative consistency and explore opportunities to further streamline administrative arrangements in the areas of systems, reporting and e-commerce solutions that will further reduce compliance costs. As a result of the work already undertaken, a number of minor amendments are required for late inclusion as part of the Payroll Tax Bill. These amendments reflect those recently tabled in New South Wales and include clarifying the exemption for charitable bodies and modifying the grouping provisions for employers. I therefore do intend move these amendments in the committee stage.

I commend the bill to the House.

[11.47 a.m.]

Mr WILL HODGMAN (Franklin - Leader of the Opposition) - Mr Deputy Speaker, I indicate from the outset that the State Opposition will support the legislation, obviously with an eye on what amendments are to be introduced in the committee stage. Our fundamental view is that the bill, as it stands, will be considerable and significant in its impact and appears to be well founded in terms of the objectives that it seeks to achieve with particular reference to the exemptions and compliance protection measures et cetera that form the core part of the legislation. The State Opposition support what is being done here, as it does establish some national consistency, and I will talk about that in a moment.

Obviously payroll tax is the subject of considerable debate and can often, in a political context, be an election policy-type issue. Indeed, we have gone to previous elections with payroll tax policies, but our current view is not to propose any alteration to the payroll tax regime and given that there have been further moves towards a consistency with other jurisdictions, we will certainly look at the current arrangements and see how we scrub up against other States. There is often a claim by governments that they are the most competitive tax environment. That is perhaps not surprising. Looking at media releases on the harmonisation issue, it is interesting to see that two or three States claim to be the second most competitive State in the nation. I wonder how they can all so be, but I do not know where we fit into that argument.

One thing I did note of interest when the harmonisation provisions were introduced was that there was some expression of concern by the Chief Minister for the ACT, the Honourable Jon Stanhope, who was critical of how the harmonisation agenda had been progressed with a claim that work towards a national consistency led by Western Australian Treasurer Eric Ripper had been pre-empted by Victoria and New South Wales.

'It hardly seems in the spirit of cooperation for two jurisdictions to jump the gun with a bilateral agreement ahead of national consideration of the issue.'

These are the words of Jon Stanhope in his media release on 1 March 2007. He went on to say:

'It was disappointing New South Wales and Victoria had effectively chosen to gazump well-advanced national proposals for harmonising payroll tax rules which had been expected to be considered by State and Territory Treasurers later this month.'

So I guess that explains why there seems to be two camps here with respect to harmonisation, with Western Australia effectively standing alone. That is fine but I am interested as to how this matter has progressed to the stage where there is debate on national consistency. My understanding is that it is not the product of a COAG-type arrangement. It might have even been struck by the State secretaries.

Mr Bartlett - Led originally by New South Wales and Victoria and then us and Queensland have come in on the back of that.

Mr WILL HODGMAN - By the secretaries of the departments as opposed to the Treasury? Is that right?

Mr Bartlett - Led by the Treasury as opposed to the Treasurer.

Mr WILL HODGMAN - That is not necessarily a bad thing, but it is interesting. I wonder, then, what ramifications that has for the strength of the agreement, so to speak. It probably does not carry the weight of a COAG-type agreement where it is a government.

Mr Bartlett - Its strength is that it is in legislation.

Ms Putt - It is possibly more likely to have bipartisan support, however, at a political level.

Mr WILL HODGMAN - It is perfectly legitimate. It seems more often than not that these things seem to come out of the political agenda and less so out of the departmental. It was interesting to note that there seemed to be some disruption to the process, at least in the eyes of Jon Stanhope. Perhaps in context of being a little aggrieved with what New South Wales and Victoria were doing, he made the comment in that same media release that the bilateral announcement by New South Wales and Victoria could increase compliance costs for businesses operating across multiple jurisdictions. Consideration has been given in the ACT to increasing the exemption rate for accommodation and motor vehicle allowances, he said, but in the interests of reducing compliance costs for businesses it was decided to hold off pending the outcome of the national project. I am not sure whether or not that is the case but obviously we are interested to get an understanding of not only the revenue impacts for these changes to the State's financial position but also whether or not there is any prospect of compliance costs for businesses increasing. I would expect, given what you have said, in line with the benefits of consistency it is likely to be the reverse. As I say, the Chief Minister made an observation which would tend to contradict that.

I want to add my thanks to Treasury officials who provided us with a briefing. This bill was brought in pretty well at the last minute at the last sitting and there was some concern it would be debated then. We were grateful for the opportunity to have a little more time to receive a briefing. As I said in respect of the water and sewerage legislation last night, we do gain considerable benefit and advantage from being so briefed. I do not for a minute intend to be a financial guru, and I am sure the Premier would agree with me on that point, but I would like to press that point at some time. I am more than happy to say that when you contemplate fairly complex legislation and try to also match up how changes to our legislation will compare with other jurisdictions and what revenue impacts there may or may not be, it is impossible for the State Opposition to model any of this and come up with some sort of independent analysis. The sorts of materials we get, including a matrix of what changes there will be to Tasmanian taxpayers, is helpful and allows us to engage directly with key stakeholder groups. I have received no complaint from any of those with whom I have had contact, including those groups that may now be subject to particular provisions - charities etc. I can only take on trust that which I am told by experts and those who might be directly impacted by this legislation.

I will come to a particular matter that has been brought to my attention but I think I will follow it up in more detailed correspondence because it does seem to be a little more complicated, without wanting to improperly interfere with a matter that might be subject to some dispute resolution process. An issue on which I will seek some clarification in relation to some of the changes concerns employment agents, their status within the legislation and what change has been made to alter the arrangement relating to employment agents. The matter has been brought to my attention by a constituent who is currently involved in some discussions with the State Revenue Office and perhaps is in the process of having it formally resolved. I am conscious of not improperly hindering that process or inflaming it in any way, but the distinction between the hiring of contractors and employees goes to the heart of the matter and the definitional issue which goes back to previous amendments and provisions relating to payroll tax. It is probably best, rather than fumble across it, to formalise it in writing to the Treasurer. But I raise that now and I would be grateful if it is possible to get any indication at all today as to what effect or what change there might have been between the last set of legislative amendments and the new bill that would affect employment agents, the definition of them and how they are interfaced with this legislation and payroll tax.

I have taken the opportunity to consult with key stakeholder groups in relation to the legislation and they have had no complaints about what is being done. Obviously the legislation will harmonise us with New South Wales, Victoria and Queensland in terms of administrative and regulatory provisions but will not deprive us of our flexibility and our autonomy in setting the rates and thresholds, and that is important. I would expect that would always need to be the case - that we would argue that we would be at liberty to alter those as we see fit to place us in a more competitive environment. There is often debate and comment about payroll tax and the impact that it has as a disincentive to employment.

Business groups are often critical of payroll tax. I do not believe that there has been as much of a push for reform in this area in more recent years but no doubt there will be some who have advocated in the current budget cycle and will continue to do so into the future so that we could make ourselves more competitive. But from the State Opposition's point of view we do not at this stage propose any alteration to the current arrangements, provided that we continue to remain truly competitive in the scheme of things and that we are, without adversely impacting on our revenue capacity, providing the sound base for investors and business to look at Tasmania from other jurisdictions as a place where they might set up business and not be deterred unnecessarily, as far as is possible, by taxation arrangements and other regulatory issues.

I do not propose to dwell on particular matters at this point. Some may arise in Committee. Obviously there will also be considerable benefits to flow from this, which should be acknowledged, in terms of providing additional exemptions which are positive. They all seem to be well-founded and appropriate with respect to how the legislation impacts on charities, those eligible for maternity leave and those who work in a volunteer capacity.

Grouping and anti-avoidance provisions seem perfectly sound and, again, we appreciate the briefing in which we were able to go through some of these matters and get further information as to how they interact with those who might be required to pay payroll tax - trainees and apprentices and so on.

It does seem to be a step forward in terms of refining payroll tax provisions. I can understand the good reasons for consistency with other jurisdictions, particularly given the payroll tax base in Tasmania and the fact that so many companies from other jurisdictions might be required to pay payroll tax. In a day and age and in the market where we need to act aggressively in competing with our interstate rivals, we do not want to have a situation where we are disadvantaged by having a more cumbersome compliance and regulatory environment.

In many respects that can be as important as the rate and threshold issues. Whilst you may well have a competitive rate threshold, if businesses are being bogged down with compliance costs, if there is not sufficient adequacy to provide greater benefit to those people such as volunteers, child care providers and so on and also adequate anti-avoidance provisions, then our system is not as efficient and as effective as it should be. That in itself will deter people from setting up businesses and employing Tasmanians, which is not something that we want to encourage or provide for. At this point the State Opposition supports the legislation with some further discussion in Committee.

[12.00 p.m.]

Ms PUTT (Denison - Leader of the Greens) - The Tasmanian Greens will also be supporting the legislation and I should at the outset thank the minister's advisers for the opportunity of a briefing which in fact I never did take up and I was remiss in not getting back in touch with them. Because this did not come on last time we sat, I had the opportunity to have a look at it over the sitting break and I determined that I did not really need a briefing in order to make a position in relation to it.

I think that the concept of this legislation is a good one and clearly harmonising to a degree the legislation and administration of payroll tax here in Tasmania with the arrangements that apply in New South Wales and Victoria has to be of benefit. Indeed, consistency between jurisdictions is something that I think businesses have long been crying out for and it really will assist them in dealing with what they encounter in relation to red tape if at least between these States they can understand the similar - or in a number of instances - the same provisions, rather than having to get their heads around a whole different set of rules and circumstances every time they go somewhere else. That, of course, is quite an impost on business when the institutional arrangements between jurisdictions are so very different.

I think it does assist in that area for business and it is interesting that there is a prospect that the jurisdictions will continue to work together. One of the things we are told in the Premier's second reading speech is that they will explore opportunities to further streamline administrative arrangements in the areas of systems, reporting and e-commerce solutions. I am pleased to see that will continue to occur because I am sure there is more that can be done in those areas.

I am also pleased that we really have a strengthening of anti-avoidance measures that come with these changes due to the consistent grouping provisions with respect to controlling interests. That, of course, will be a positive benefit here and in the other States and, again, I think those anti-avoidance measures are particularly important.

I also wanted to note some of the exemptions that I think are of particular benefit. The introduction of new exemptions for payments made to employees on maternity leave and adoption leave has to get a big tick, probably especially from a female member of parliament, although we have no mortgage on having children or adopting children, obviously. I would have liked that to read 'parental leave' and I wonder whether that is a mistake in the speech as it is written or whether it only will apply to women in the case of the birth of a child. I wonder if the minister is able to clarify that.

We are also happy about the introduction of new exemptions for wages paid to volunteer firefighters, volunteer emergency workers and Aboriginal persons in a CDEP. That is something that I am sure we all welcome from every side of the House, as well as the expansion of current public benevolent and religious exemption arrangements to also cover not-for-profit organisations in relation to their employees working for charitable, religious, philanthropic, benevolent or other patriotic purposes.

I do want to explore the implications of that new clause 48 to which you are moving a further or differing amendment when we go into Committee, Premier, and I will raise with you now what that issue is so that your advisers have time to get an answer together if it is not one that is immediately known to them. I wanted to ask whether this definition of a non-profit organisation would encompass environmental NGOs, because this is an area which sometimes comes under the definition of 'charitable' because where they comply with the Federal provisions they sometimes become eligible for exemptions and on other occasions do not. So it is all sometimes a little clouded. I wanted to draw your attention to the work of organisations like the Conservation Trust for Volunteers, for example, who operate around Australia and I think would trigger payroll tax thresholds almost certainly, workers like the Coast Care groups who, although a lot of that work is voluntary, also have a substantial core of paid administrators, the Australian Conservation Foundation and the World Wildlife Fund, for example.

Mr Bartlett - It's based basically on an ATO determination of a charitable organisation.

Ms PUTT - So if they comply with the ATO definition they are right. Okay, thank you for that. Again, that is useful in relation to those good works as well, and I think we are all very grateful for a lot of the on-ground environmental work that is done by those organisations with a large amount of voluntary labour, but obviously some paid organisational personnel too.

The other thing that I just wanted to address was payroll tax more generally, and I am not going to go to it in any great detail. I am sure we can get onto it once we are talking about the Budget, in only 13 sleeps time or thereabouts. I will be interested to look at the Budget in relation to whether there is any adjustment of the threshold, and that is an issue that has come up year after year in the last few years here in Tasmania.

The other point I just wanted to make quickly with the Premier is that I know he has said that he has previously taken an interest in our alternative budgets. I do not know whether he read our statements in the last one in relation to payroll tax, but we have outlined that we would like to see a broadening of the tax base, if it were possible, for Tasmania, and a change of the tax mix towards taxation on pollution and enabling that to alleviate taxation on employment. That actually could be a boon to Tasmania in diversifying its tax base, but also in freeing up that imposition of tax on employment.

As discussion gets under way more generally in government circles, the idea of putting an impost on polluting activities is beginning to be accepted, which was once just the province of the Greens to walk into Parliament and talk about, and I think it would be good if the Government could give this some realistic consideration. We have advanced these proposals through policy at the national level through the Australian Greens, and Christine Milne has actually published some work in relation to this. The Australia Institute of course also did some very important work a couple of years ago in relation to this idea of utilising pollution taxes to broaden your tax base and enable you to lessen taxes on employment so that at the same time as you provide an incentive to get polluting activities under control, you can actually also provide an incentive for greater employment. I think it should not simply be the province of Green groups or environmentally-aligned parties to be making representations in this regard because clearly there are a range of economic benefits that can flow from this, no matter what your political allegiance is. I wanted to introduce the notion here today because I am aware that not everybody reads and digests all that we have said in that alternative budget statement. We think that we have a valuable suggestion to make here in relation to that issue and the tax mix for Tasmania.

The narrowness of the tax base that we have is of concern to many and that is something that in a sense was exacerbated by the introduction of the GST, although no-one is saying that we are going to turn the clock back on that, nor that the State should not be receiving that GST income. The reaction from our Treasurer in relation to suggestions of taking payroll tax off petrol was fairly interesting yesterday and something we predicted in our party meeting on Monday that would probably be forthcoming soon from the State Treasurers and from our Treasurer in relation to that suggestion that appeared to be made out of hand by the Prime Minister, because a lessening of those GST tax receipts on fuel would have a massive impact on Tasmania and on the other States.

From the Greens' perspective, utilising pollution taxes to reduce pollution and also to move the burden of taxation a little more from employment in order to encourage employment and to broaden our tax base has, I think, major potential. Similarly, the Greens' belief is that to at this point lessening taxation on petrol is the wrong thing to do. We are in an era where we need to adapt to climate change. One of the key things we need to do is be more efficient with our use of fossil fuels, to lessen our dependence and our utilisation of petrol and to get more efficient technologies and different technologies that either use less or do not utilise that particular fuel source. A higher price is one of the most effective signals to push adaptation and anybody who was trying to incorporate climate change thinking into their public policy mix would not be advocating taking the pressure off in relation to that financial incentive to adaptation. It needs to happen because it will inevitably happen anyway under the peak oil scenario and climate change, and we are getting towards that point. What we need to do is ride through the rough period to adaptation, talk to the community about that and put in place incentives for that. That is the way to deal with it, rather than this head-in-the-sand approach of just taking the tax off petrol.

I have strayed somewhat from the topic in hand and the Premier has had the opportunity to do the necessary things that he needed to do. I have enjoyed the opportunity to make a contribution in relation to that business of potentially changing the tax mix in Tasmania in a way that could encourage employment, broaden the tax base and tackle pollution through pollution-based taxation.

[12.14 p.m.]

Mr ROCKLIFF (Braddon - Deputy Leader of the Opposition) - I wish to make a few broader comments on this bill and on payroll tax in general.

My main concern is an update on the consequences of the cessation of the Tasmanian Trainee and Apprentice Incentive Scheme, of which I am still receiving some correspondence and concerns, particularly from larger employers within the building industry as to the impact of the cessation of this scheme. I asked the Minister for Economic Development a question on 1 April and in the adjournment debate that night -

Mr Bartlett - I think I might have written to your Leader yesterday about this.

Mr ROCKLIFF - I will look forward to seeing that correspondence. I am sure you will be able to provide some detail today as well.

Mr Bartlett - I am not sure it is germane to the bill. I am very happy to get you the information today.

Mr ROCKLIFF - Thank you. I look forward to seeing the information. The Minister for Economic Development came back into the House on the adjournment debate that evening and provided some more detail, and I quote from her answer:

'Leading up to this Treasury and Finance did a review of the Government's payroll tax assistance arrangements. That review found that government assistance would be better provided through a direct and targeted assistance to apprentices and trainees rather than by indirect assistance to employees via payroll tax rebates. That is one of the things that led to this decision.'

She goes on to say:

'Also, it has been timed to coincide with the introduction of new payroll tax arrangements in the State which are harmonised with Victoria and New South Wales which will deliver a significant and ongoing cost savings across all industry sectors.'

So it is relevant, according to the Minister for Economic Development, to answer this question at this time and I will continue to do so.

The particular representation that I had was from the north-west Master Builders Association of Tasmania about their concerns with the winding up of this program. They were concerned that the cessation of the Tasmanian Trainee and Apprentice Incentive Scheme would make it more expensive to employ people, result in businesses avoiding hiring extra staff to avoid being pushed over the threshold and impact on housing affordability as the loss of the rebate flowed on to the extra housing costs. I have had other representations from larger construction firms concerned about the cessation of this scheme. The questions they want answered I have here, and we failed to get a particular answer from the Minister for Economic Development at the time. They want detail of the new program to replace the existing scheme, whether it will equal the assistance provided by the current scheme in dollar terms and whether the current incentives paid for apprentices will continue for those signed up before 1 July 2008 to the completion of their apprenticeships. These are the questions they are still asking me as a result of the cessation of the Tasmanian Trainee and Apprentice Incentive Scheme, which has been available to employers in Tasmania for the last decade. Obviously the larger employers have taken advantage of it and value it. It is an incentive to take on more trainees and apprentices, even in this time of labour and skills shortages. I place those concerns of the stakeholders on record in an effort to seek some more information as to the new scheme in place post-1 July 2008. If the Premier could detail some more information and if I can get hold of that letter that he has written to the Leader of the Opposition and put that on the record, I would be greatly appreciative.

[12.19 p.m.]

Mrs NAPIER (Bass) - The issue I raise in the context of payroll tax - it would appear as if it is covered by the reforms that are included within this payroll tax reform - was raised with me by constituents who work in the health and dental field. One particular person had been subject to grouping provisions. This was in a situation where there were a number of independent operators who ran quite independent businesses but who operated from a single facility. Each independent operator leased the facility and services and paid relative contributions to the operation of that, whilst one person owned and bought and managed the equipment which he then leased out for access and operation to others.

Quite recently moves were made by State revenue to group some of those independent operators as one, thus having implications in terms of going above the threshold in relation to payroll tax liability. The concerns then started to flow through to the medical profession because there were quite a number of instances where you might have anything up to 10 doctors operating from the one site. Each one of them operates as an independent operator but they pay a fee for the provision of nurses, office facilities and so on. There was then concern that payroll tax under the grouping provisions would then apply to medical establishments to which it had not previously been applied.

The real concern was advice being received via the dental business and also from some of the medical businesses. If they were based in Victoria they would not be caught up by the grouping provisions. Their taxation would be treated quite differently if they were in fact based in Victoria or New South Wales.

I want a reassurance from you, Premier, that, as a consequence of aligning Tasmania's payroll tax provisions with those of Victoria, we are in fact adopting the situation that would arise in Victoria and New South Wales whereby, under their law, major dental practice and medical practices that operate in this way would not be caught up under grouping provisions. I ask for a clarification of that for the benefit of practitioners who are really concerned about the moves that are being made.

[12.22 p.m.]

Mr BARTLETT (Denison - Premier) - Mr Deputy Speaker, I thank members for their indicated support of the bill. I think most of the issues that have been raised I have either covered by interjection or will cover in Committee. There were a couple of questions about the amendments I am going to move; others, I would argue, were not germane specifically to this bill. I will ask the Treasurer's office and the Minister for Economic Development's office to get any more information required as soon as possible.

On the last set of issues raised by the honourable member for Bass, I can say that the situation she describes is in fact an anti-avoidance measure. That is, if you had a business and disaggregated all your employees into sole operators to avoid payroll tax, then that would be tax avoidance.

Mrs Napier - If you did that.

Mr BARTLETT - Yes. You have given a broad brush stroke of what one of these things might look like. What I cannot give you is a guarantee that, in any given circumstance, they might be viewed as anti-avoidance, avoidance or a legitimate way to structure the businesses and therefore not reach the threshold. I accept what you are saying. What is important here with this bill is that they would be treated exactly the same in Tasmania as they would in Victoria and New South Wales. However, I cannot make a tax ruling based on a generalisation about a story because, as you would understand, that could be used as a tool to avoid tax as well - and has been so used, in fact.

Mrs Napier - But throughout Australia it is not used as a method to avoid payroll tax. It is a way in which independent operators are encouraged to co-locate for a public health benefit.

Mr BARTLETT - I accept what you are saying. My understanding of payroll tax law is that such would be the case. It would not come under payroll tax in that general way you have described. However, you could also imagine another scenario where it could be used to structure a business in such a way to avoid tax - something that is genuinely a business of 150 employees.

Mrs Napier - The dentist was arguing that he was losing people back to Victoria. They come over here and if he has to pay payroll tax then he cannot match the salaries.

Mr BARTLETT - This will make sure that the same rules apply here as in Victoria and New South Wales around groupings. We do not have to get into an argument about where the grey areas are because it is just going to be the same.

Bill read the second time.