COMMONWEALTH OF AUSTRALIA
SPEECH BY
The Rt Hon. J. G. GORTON, M. P.
ON
RECEIPTS DUTY LEGISLATION
Ministerial Statement
[ From the ' Parliamentary Debates', 1 October 1970]
Mr GORTON ( Higgins-Prime Minister)
-by leave-As a preface to my statement
on receipts duty legislation I point out to
the House that I know of no dispute with
any State Premier other than the Premier
of Victoria on this question of payroll tax.
Honourable members will recall that las,
June legislation was introduced to impose a
continuing Commonwealth receipts duty on
business receipts. The Treasurer ( Mr Bury)
explained that this was being done at the
request of the States, and for their benefit,
the purpose being to ensure that the States
did not lose revenue as a consequence of
the High Court decision which invalidated
their own receipts duty legislation as it
applied to certain types of receipt. The
Treasurer also explained that the Commonwealth
legislation would-again at the
request of the States-apply retrospectively
to 18th November 1969, the date on which
the Commonwealth's agreement to introduce
legislation for the benefit of the States
was foreshadowed. Provision was made,
however, for exemption from duty under
the Commonwealth legislation, in respect
of the period 18th November 1969 to a
date to -be proclaimed as the end of a transitional
period if duty, whether or not
validly imposed, was paid under State
legislation. 23116/ 70 The proposed legislation was approved by
this House but failed to secure the approval
of the Senate. Immediately after the resumption
of the House following next
week's recess, the legislation will be reintroduced
in the House with inclusion of
provisions under which the Commonwealth
legislation will cease to apply to
amounts received after 30th September
1970. The overall effect of the new Commonwealth
legislation will be that business
receipts during the period from 18th
November 1969 to 30th September 1970
will be liable to duty under it at the rate
of 0.1 per cent, but that this liability wil
not arise if the provisions of State laws
in this period-whether valid or invalidare
complied with. One effect of this will be
that, to the extent that receipts are specifically
exempted or simply not dutiable under
State law, they will not be dutiable under
the Commonwealth law. Another effect will
be that receipts which Queensland legislation
has purported to make dutiable during
this period will remain liable to duty at the
lower rate of 0.02 per cent-provided of
course, Queensland duty is in fact paid on
the receipts or has already been paid.
I add that, knowing of the Government's
stated intention to proceed with Commonwealth
legislation to impose, at the States'
request, a duty on business receipts, many
businesses have continued to pay duty to
the States even though the payment of an
excise may have been involved. In 1969-70
the States actually collected 85 per cent or
more of the total amount they had estimated
they would receive. The essential purposes
of the new Commonwealth legislation will
be to validate the collections already received
by the States and, in the case of businesses
that have refrained from paying receipts
duty in respect of the period to be covered
by the Commonwealth law, to require them
to make such payments.
The Government appreciates that the
1970-71 budgets of the States have been
framed on the assumption that the Commonwealth
receipts duty legislation would
have continuing operation and that the
States would therefore receive the full benefit
of the receipts duty revenue that would have
been payable to them in 1970-71 if the Commonwealth
legislation had continuing operation.
The Government also appreciates that
limiting the operation of the Commonwealth
legislation to receipts up to 30th
September 1970 will have a significant
effect on State revenues for 1970-71 and that something will need to be done to protect
the budgetary situation of the States.
We propose that additional Commonwealth
grants will be payable to the States in
1970-71 so as to make good the reasonable
losses of State revenue resulting
from the termination of the Commonwealth
receipts duty legislation on 30th September
1970. As in the case of other arrangements
for the payment of Commonwealth assistance
grants to the States in 1970-71, our
willingness to do this is on the basis that the
arrangements resulting from the June 1970
Premiers Conference will apply in their
entirety. For the purpose of ascertaining such
reasonable losses I am in touch with the
Premiers with a view to arranging consultations
between the Commonwealth and State
governments as quickly as possible. We
have in mind that at such consultations
there will be discussed the question of the
future of receipts duty in the non-excise
area under State legislation against the
background that the Commonwealth legislation
will cease to apply to amounts received
after 30th September 1970.
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