State Revenue Legislation Amendment Bill 2017

Hansard ID: HANSARD-1323879322-96605

Hansard session: Fifty-Sixth Parliament, First Session (56-1)

State Revenue Legislation Amendment Bill 2017

Second Reading

Debate resumed from 23 February 2017.

Mr CLAYTON BARR (Cessnock) (18:37:53):

I speak on the State Revenue Legislation Amendment Bill 2017. I lead for the Opposition and note from the outset that the Opposition will not be opposing this bill. This is indeed a complex bill and it applies to a rather large number of scenario-specific situations in people's lives. With that in mind, as the shadow Minister, while I do harbour some minor concerns about possible and unintended consequences, there has been no outcry or broader claims of injustice from parties who will be directly affected by the bill, and so I place some faith in the absence of alarm. This bill will give effect to changes in several pieces of legislation including the Duties Act 1997, the Land Tax Management Act 1956, and the Payroll Tax Act 2007. It will also have minor impacts on the First Home Owner Grant (New Homes) Act 2000, the Regional Relocation Grants (Skills Incentive) Act 2011, the Small Business Grants (Employment Incentive) Act 2015, and the Taxation Administration Act 1996.

The most significant changes that will result from this bill can be found in the Duties Act 1997. These changes will include: the allowance of electronic transactions, rather than only written or paper documents; and the charging of nominal duties to replace ad valorem duties in instances of property transfer such as self-managed superannuation funds, the retirement or appointment of trustees, merger of credit unions and mutual structures, and between family members on primary land and/or marriage or de facto break-ups. Another set of changes to the Duties Act 1987 will allow for linked entities, through complex company and trust structures, to be identified and connected to the land holding. It will also close loopholes to prevent avoidance of landholder duties. It will also extend the circumstances in which a trustee, a natural person and a company can be treated as being "associated" for the purpose of liability of duties.

Changes to the Land Tax Management Act 1956 will require government entities that enter into a lease of Crown land to inform the lessee that the leased land occupied is to be included in their own personal assessment of land tax. Under the changes proposed to the Land Tax Management Act found in this bill, if the government entity leasing the land does not fulfil this requirement to inform the lessee that they carry responsibility for resolving their own land tax issues by including the lease in their assessment, then the government body itself, having leased the land without properly informing the lessee of potential land tax duty, will be liable for the land tax duty.

Changes to the Payroll Tax Act 2007 allow for appropriate exemptions for employment agents who on‑hire their employees from the appropriate wages being included for the purpose of payroll tax when the employee is paid an "exempt wage". Examples of this include non-profit organisations, education and training, volunteer emergency services, maternity and adoptions leave and Aboriginal employment. In essence, this means that if a company on-hires an employee to another entity so that the employee can perform duties in any of the listed categories and others, then the employee's wages should not be included in determining that the original company is responsible for payroll tax. This seems to be an appropriate amendment.

Other minor changes to the Payroll Tax Act will specify that wages paid to an employee participating in the Commonwealth organ donor scheme will not be counted for the purpose of payroll tax, which is another change I support. A company employing a courageous individual participating in this scheme should be exempt from payroll tax. A final change to the Payroll Tax Act will also deal with motor vehicle allowances, in keeping with the recently amended Commonwealth Income Tax Assessment Act. The three-tiered system of motor vehicle allowances that have historically been in place will be replaced with a single exempt rate.

Changes to various other Acts are identical changes in each instance and will allow the Office of State Revenue to share information with Australian charities and not-for-profits in the execution of each of those Acts. Here I refer to the First Homeowners Grant, the New Homes Act, the Regional Relocation Grant Skills Incentive Act and the Small Business Grants Employment Incentive Act. It is my understanding that the intent of this change to allow for the exchange of information is to close loopholes in the application of grants. Further, it appears likely that this change is required due to the incredibly large number of services formerly provided by the public sector and government departments that are now being implemented by charities and not-for-profits.

Primarily, this bill seeks to close loopholes and align with recent changes in Commonwealth legislation. However, to the matter of changes to landholder duties and duties imposed on the transfer of landholdings, there is some question about the potential use of these changes in providing what might be described as a "free ride" for wealthy self-managed superannuation schemes and trusts. It is impossible to determine the quantum of this without access to extensive datasets. To this end, I ask the Minister in his reply speech to offer some figures about the types of volumes of such transfers of landholdings and the financial impacts, positive or negative, to the budget bottom line that will result from the changes proposed in this bill. I ask the Minister to provide these figures in the interests of transparency. I am assuming that the figures will not cause alarm or concern but rather that the figures will give evidence and testimony to the minor nature of these changes. As noted at the outset, the Opposition does not oppose this bill.

Mr JAI ROWELL (Wollondilly) (18:45:06):

I support the State Revenue Legislation Amendment Bill 2017 and I note that the hardworking Ministers with carriage for this bill, the Minister for Finance, Services and Property and the Minister for Innovation and Better Regulation, are in the Chamber for this debate. The provisions making lessees of land owned by the Crown liable for land tax commenced in 1989 and were extended to lessees of council land in 1992. They were intended to create a level playing field between people who lease from the Crown and people who lease premises from private owners, who are required to pay land tax in their outgoings. The Office of State Revenue [OSR] attempts to inform lessees of potential liability through the client education program, and information is published on the OSR website and included in land tax brochures.

The Office of State Revenue writes to Crown bodies and councils to remind them to inform new lessees of any potential land tax liabilities and to get the details of new leases entered into. Unfortunately, some lessees slip through the net each year and are only identified after compliance activity. The amendment to require Crown bodies and councils to include a clause in all new lease agreements will benefit lessees in several ways. It will do this for people who are aware of potential for land tax where the liability will be taken into account when negotiating lease payments. The number of clients who fail to declare a land tax liability and who later have to pay up to five years of prior tax year debt will be decreased.

The objects of the bill are to amend the Duties Act 1997 to clarify the application of that Act to instruments that are in a digital form; to provide for the charging of nominal duty, rather than ad valorem duty, on certain transfers of property to the custodian of a trustee of a self-managed superannuation fund where duty on an agreement for the sale or transfer of the property has been paid and the purchaser is the trustee; and to clarify the matters of which the chief commissioner must be satisfied for nominal duty, rather than ad valorem duty, to be charged on transfers of trust property that are a consequence of the retirement or appointment of a trustee. Further objects are to provide for an exemption from duty for the vesting of land occurring as a consequence of the merger of credit unions or of authorised deposit-taking institutions with mutual structures; to extend existing exemptions from duty on transfers following the break-up of marriages and de facto relationships to cover such transfers to trustees under the Bankruptcy Act 1966 of the Commonwealth, and to make further provision in relation to the aggregation of interests acquired by a person in a landholder for the purposes of liability for landholder duty.

Other objects are to ensure that the liabilities of a landholder are disregarded in determining whether a person has an interest in a landholder that makes the person liable for landholder duty; to make further provision in relation to the tracing of interests through linked entities of a unit trust scheme or company for the purposes of determining whether the scheme or company is a landholder; and to extend an existing anti-avoidance measure, which ensures that certain landholdings transferred from a unit trust scheme or company within 12 months of a person acquiring an interest in the scheme or company are counted when determining whether the scheme or company is a landholder so that the measure covers agreements for the sale or transfer of landholdings.

Further objects are to prevent the avoidance of liability for landholder duty by the use of arrangements that include combined put‑and‑call options as an alternative to an agreement for sale or transfer; to make further provision to prevent a person who enters into an agreement to purchase shares or units in a landholder avoiding landholder duty by opting to defer registration of the purchase; and to extend existing exemptions from duty connected with transfers between family members of land used for primary production to, among other things, cover transfers from a self-managed superannuation fund where a member of the fund and the person to whom the land is transferred are family members.

Provisions also included are: to provide for an exemption from duty connected with transfers of property between superannuation funds that are required to be made under transitional arrangements relating to the Commonwealth's MySuper reforms; to make further provision for the test to be applied in determining the amount of duty that a person is liable to pay as a result of a tax avoidance scheme that is of an artificial, blatant or contrived nature; to extend the circumstances in which a trustee and another trustee, a natural person and a trustee, and a private company and a trustee are treated as being "associated" for the purposes of liability for duty, by tracing through to sub-trusts; and to make other minor and consequential amendments.

Mr Clayton Barr:

This is sexy legislation.

Mr JAI ROWELL:

This is very great legislation, as the member for Cessnock has just informed the House. The bill also amends the Land Tax Management Act 1956 to require a government entity that leases land to make the lessee aware that the lessee can be liable for land tax on the land. It also amends the Payroll Tax Act 2007 to provide that certain wages paid by employment agents who on-hire their common law employees to clients of the agents are exempt from payroll tax if wages paid by the clients to their own employees are "exempt wages"; to exempt from payroll tax wages paid under the Supporting Leave for Living Organ Donors Program; and to update other provisions of that Act.

Finally, the bill amends various Acts to permit disclosures to the Australian Charities and Not-for-profits Commission. It is my responsibility as a member of Parliament to declare in this debate that my wife and I are looking at setting up a self-managed superannuation trust. I think that many in this place would be in a similar situation, but I understand that we are legally required to declare it. I think this is good legislation. As the member for Cessnock says, it is a great piece of legislation. I commend the Minister for his hard work in bringing these essential reforms. I commend the bill to the House.

Mr ALISTER HENSKENS (Ku-ring-gai) (18:51:37):

Consistent with the views stated in my inaugural address, it would be my strong preference that an improvement to the broad‑based GST be made so that we did not need stamp duty or payroll tax to give the Government the revenue it needed to run New South Wales. Until there is some general tax reform in the Commonwealth of Australia—which would require cooperation between the State and Federal governments—it is necessary for the State Government to have in place robust revenue measures so that we can provide the hospitals, schools, roads and other facilities that our citizens require. There are some important measures, particularly relating to the Duties Act, contained within the State Revenue Legislation Amendment Bill 2017 that bear mentioning.

The first, which is in schedule 1 [12], [14] and [15], deals with a recent decision of the New South Wales Supreme Court—which changed what had been accepted legal wisdom for 30 years—in relation to the changing of a trustee and the effect of that change on stamp duty. Subject to the Perpetuities Act, it is self‑evident for those who are familiar with trust law that trusts may exist for much longer than the life of a trustee if the trustee is a natural person. To recognise that reality and to ensure that beneficiaries of trusts were not punished for the fact that their trustee had died, section 54 of the Duties Act provided for nominal duty, not ad valorem duty, in circumstances where a trustee passed away, or where there was a change from a human trustee to, for example, a corporate or specialist trustee service, having regard to the particular circumstances of the trust.

This beneficial and fair provision has unfortunately been taken advantage of by people using trust law to change the underlying ownership, in effect, of the property of a trust—effectively resulting in the disposition of property through the trust structure—and using that as a way to avoid stamp duty at an ad valorem rate. In order to ameliorate that problem, items [14] and [15] of schedule 1 to the bill make amendments to insert new subsections (2A) and (3) into section 54 of the Act. The way those two provisions work is to recognise that a duty of $50, which I would consider a nominal duty in comparison to an ad valorem duty:

… is chargeable in respect of a transfer of dutiable trust property to any of the following as a consequence of the retirement of a trustee or the appointment of a new trustee if the Chief Commissioner is satisfied that the transfer is not part of a scheme to avoid duty that involves conferring an interest, in relation to the dutiable trust property, on a new trustee or any other person (whether or not as a beneficiary) so as to cause any person to cease holding the whole or any part of a beneficial interest (or potential beneficial interest) in that property:

(a)a licensed trustee company that is not a special trustee,

(b)a trustee of a self-managed superannuation fund,

(c)a trustee of a special disability trust.

As to new section 54 (3), the existing subsection (3) is deleted and, in its place, the following new subsection is inserted:

Duty of $50 is chargeable in respect of a transfer of dutiable trust property to a person (other than to a licensed trustee company, a special trustee, a trustee of a self-managed superannuation fund or a trustee of a special disability trust) as a consequence of the retirement of a trustee or the appointment of a new trustee if the Chief Commissioner is satisfied that, as the case may be:

(a)none of the continuing trustees remaining after the retirement of a trustee is or can become a beneficiary under the trust, and

(b)none of the trustees of the trust after the appointment of a new trustee is or can become a beneficiary under the trust, and

(c)the transfer is not part of a scheme to avoid duty that involves conferring an interest, in relation to the dutiable trust property, on a new trustee or any other person (whether or not as a beneficiary) so as to cause any person to cease holding the whole or any part of a beneficial interest (or potential beneficial interest) in that property.

If the Chief Commissioner is not so satisfied, the transfer is chargeable with the same duty as a transfer to a beneficiary under and in conformity with the trusts subject to which the property is held, unless subsection (3A) applies.

This allows the chief commissioner to provide scrutiny with regard to changes in trustees and to ensure that the change of a trustee is, in effect, bona fide and not part of a scheme that would enable the change of trustee to effectively avoid the consequences of an ordinary disposition of property which would have attracted ad valorem stamp duty consequences. That is an important provision that has been introduced into the Duties Act. Schedule 1 [26] includes provisions that enable the tracing of interests through linked entities of unit trust schemes and companies for the purposes of determining whether the scheme or company is being used as a means of avoiding ad valorem duty. The schedule is complex and proposes to insert a new definitional section 158A dealing with the meaning of a linked entity and the constructive ownership of land holdings and other properties through linked entities.

Salomon v Salomon & Co Ltd

This is important because a fundamental rule of the nature of a legal personality is that usually the courts will not look behind the ownership of a company, because of the famous House of Lords decision [1896]. Similarly, it is also established law that in the case of a unit trust, ordinarily the courts will not look to who are the actual unit holders of the trust for the purposes of determining how the entity is to be taxed. However, because not tracing the underlying ownership of unit trusts or companies can create the potential for avoidance of the ad valorem duty, it has become necessary to introduce these proposed new sections. I commend the work of the Minister in introducing these complex amendments, particularly those dealing with linked entity definition and constructive ownership in new section 158A. This is important and complex but necessary reform. I commend the defence of the revenue base of this great State delivered by this bill.

Mr MARK COURE (Oatley) (19:01:54):

For those watching this debate on the internet throughout not only Australia but also the world, I commend the outstanding job that the member for Terrigal is doing as Mr Temporary Speaker. As members have said, the State Revenue Legislation Amendment Bill 2017 makes various amendments to a number of key pieces of legislation, including the Duties Act 1977, the Land Tax Management Act 1956, and the Payroll Tax Act 2007. It aims to clarify liabilities, to address avoidance practices, and to extend concessions. Significant amendments are being made to pieces of legislation, particularly the Duties Act. Members who have made contributions to this debate have talked about different amendments being made to that Act. The member for Ku-ring-gai discussed the anti-avoidance provisions, and the member for Cessnock talked about the exemptions relating to wages paid under the Supporting Leave for Living Organ Donors Program.

I commend the Minister for introducing this bill. It seeks to amend the Land Tax Management Act to require a government entity—that is, a lessor of Crown land—to make the lessee aware of the liability to pay land tax on the land. In addition, the amendments to the Payroll Tax Act make it clear that certain wages paid by employment agencies that on-hire their common law employees to exempt bodies are "exempt wages". It also amends various Acts to permit disclosure of information to the Australian Charities and Not-for-profits Commission. Mr Temporary Speaker, I foreshadow that I will seek an extension of time. I am sure that that will be supported by members on both sides of the House, including the current member for Kiama. I referred earlier to the member for Cessnock's contribution about the amendments to permit wages paid under the Supporting Leave for Living Donors Program to be treated as exempt wages for payroll tax purposes. This bill also makes other amendments to the Payroll Tax Act to update an exemption from payroll tax applying to certain motor vehicle allowances to reflect changes in Commonwealth legislation.

The bill also contains amendments designed to clean up legislation. Every six months or so parliaments introduce miscellaneous bills to ensure that State legislation accords with Commonwealth legislation. This bill reflects changes in Commonwealth legislation that has been on the statute books for some time. It also makes amendments of a statute law revision nature, including an amendment providing that the wages of staff in local health districts that may be clients of employment agencies are to be paid or are payable by the Crown. The bill also updates references to the title of a "public service agency". Other Acts being amended are the First Home Owner Grant (New Homes) Act 2000, the Regional Relocation Grants (Skills and Incentive) Act 2001, the Small Business Grants (Employment Incentive) Act 2015, and the Taxation Administration Act 1996.

I will now deal with the anti-avoidance provisions in the legislation. Amendments to the Payroll Tax Act relate to wages paid by employment agents who on-hire their common law employees. There are also amendments relating to sub-trusts, combined put‑and‑call options, and transfers of primary production land. I acknowledge the great work undertaken by the Minister and his officers. Earlier I touched on some of the anti-avoidance provisions, which I will now refer to in detail. As the member for Ku-ring-gai already mentioned, the bill amends a provision under which the amount of duty that a person is liable to pay as a result of a tax avoidance scheme that is of an artificial or blatant nature is the amount of duty avoided by the person. Currently the amount of duty avoided by the person is the amount that would have been payable or that it is reasonable to expect would have been payable by the person if the tax avoidance scheme had not been adopted.

The proposed amendment will ensure that the amount that would have been payable by the person is determined on the assumption that it is a reasonable alternative to enter into or make if the scheme had been adopted. The bill also amends the Duties Act 1997. As other members have mentioned, these amendments make it clear that an instrument includes an instrument that is in digital form and that the provisions of the Act that apply to written instruments apply also to instruments that are in digital form. These amendments also repeal a provision that is made redundant over the years. I acknowledge the presence in the Chamber of the member for Canterbury. This is an important bill.

Ms Sophie Cotsis:

It is an important bill.

Mr MARK COURE:Extension of time

I am sure that other provisions in this bill that are supported by all members include no double duty on certain transfers of self-managed super funds—this issue has been raised with me from time to time by people in my electorate—and transfers of trust property as a consequence of the retirement or appointment of trustees, which is a good point. I am sure that many people are listening to this debate and to my speech.[]

Recently I read the bill and earlier today I read the Legislation Review Digest relating to this bill. These amendments will ensure that a nominal duty of $50 is chargeable on certain transfers of trust property that are consequent on the retirement or appointment of trustees only if the chief commissioner is satisfied that, among other things, the transfers are not part of a scheme to avoid duty that involves conferring an interest relating to the trust property or a new trustee or other person so as to cause any person to cease holding a beneficial interest in that property. These are commonsense changes in the State Revenue Legislation Amendment Bill. I congratulate the Minister for Finance, Services and Property on introducing the bill and I commend it to the House.

Mr GEOFF PROVEST (Tweed) (19:13:20):

I contribute to debate on the State Revenue Legislation Amendment Bill 2017, which makes various amendments to duties, land tax and payroll tax legislation to clarify liabilities, address avoidance practices and clarify or extend concessions. Many of the amendments in this bill could be described as minor or housekeeping amendments that will have the effect of clarifying and fine-tuning State revenue legislation. The proposed reforms will amend the Duties Act 1997 to ensure the Act applies to instruments that are in a digital form. The community has come to rely on digital communication in everyday life, and this Parliament is not exempt. The objects of the bill are as follows:

(ii)to provide for the charging of nominal duty (rather than ad valorem duty) on certain transfers of property to the custodian of a trustee of a self-managed superannuation fund where duty on an agreement for the sale or transfer of the property has been paid and the purchaser is the trustee, and

(iii)to clarify the matters of which the Chief Commissioner must be satisfied for nominal duty (rather than ad valorem duty) to be charged on transfers of trust property that are a consequence of the retirement or appointment of a trustee, and

(iv)to provide for an exemption from duty for the vesting of land occurring as a consequence of the merger of credit unions or of authorised deposit-taking institutions with mutual structures, and

(v)to extend existing exemptions from duty on transfers following the break-up of marriages and de facto relationships to cover such transfers to trustees under the Bankruptcy Act 1966 of the Commonwealth, and

(vi)to make further provision in relation to the aggregation of interests acquired by a person in a landholder for the purposes of liability for landholder duty, and

(vii)to ensure that the liabilities of a landholder are disregarded in determining whether a person has an interest in a landholder that makes the person liable for landholder duty, and

These objects clarify the landholder duty provision in relation to the tracing of interests through linked entities, extends anti-avoidance measures and put‑and‑call options, ensures that the liabilities of a landholder are disregarded in determining whether a person has endurable interest in a landholder, and extends existing exemptions from duty connected with transfers between family members of land used for primary production to self-managed superannuation funds. The objects of the bill also include:

(xiii) to provide for an exemption from duty connected with transfers of property between superannuation funds that are required to be made under transitional arrangements relating to the Commonwealth's MySuper reforms, and

(xiv) to make further provision for the test to be applied in determining the amount of duty that a person is liable to pay as a result of a tax avoidance scheme that is of an artificial, blatant or contrived nature, and

(xv) to extend the circumstances in which a trustee and another trustee, a natural person and a trustee, and a private company and a trustee are treated as being "associated" for the purposes of liability for duty, by tracing through to sub-trusts…

The bill amends the Payroll Tax Act 2007 to:

(i)to provide that certain wages paid by employment agents who on-hire their common law employees to clients of the agents are exempt from payroll tax if wages paid by the clients to their own employees are "exempt wages", and

(ii)to exempt from payroll tax wages paid under the Supporting Leave for Living Organ Donors Programme, and

That program is under Commonwealth legislation. The bill will amend the Land Tax Management Act 1956 as follows:

(ii)to exempt from payroll tax wages paid under the Supporting Leave for Living Organ Donors Programme, and

…

(d)to amend various Acts to permit disclosures to the Australian Charities and Not-for-profits Commission.

Recently, the Commonwealth Government introduced a scheme to encourage people to donate their kidneys or a part of their liver. The scheme reimburses employees for wages paid for up to six weeks leave taken by the donor employee, based on a national minimum wage for a 38-hour week. The amendment makes it clear that these payments from an employer to an employee are exempt wages to the extent that the wages are reimbursed by the Commonwealth. I support the organ donors program and encourage everyone to register and to have discussions with their families and loved ones, to ensure that they do not override their wishes. This worthwhile program, which has a low participation rate, enables people to donate their organs to save the lives of others. he provision in the bill removes a potential disincentive for employees to approve leave for employees participating in the scheme.

¢¢

The Payroll Tax Act exempts a motor vehicle allowance being paid to an employee for using their vehicle for business up to the rate for a large car prescribed under the Commonwealth income tax legislation. The 2014‑15 prescribed rate for a car was 77 per litre. The Commonwealth has amended this legislation to replace the existing three‑tiered scale of motor vehicle allowances with a single rate. The single rate for 2015-16 and 2016-17 is 66 per kilometre. The amendment adopts the Commonwealth changes so that the same rate is applied for payroll tax purposes. This simplifies the administration for employers and also reduces red tape. A key component of the Liberal-Nationals Government is reducing the amount of money paid by the employer and reducing red tape. The bill extends this to include transfers from self-managed superannuation funds to recognise the increasing practice of holding family businesses in self-managed superannuation funds.

Secondly, the nominal duty currently applies where an agreement is completed by a transfer to a person who is related to the purchaser. This extends to transfers to custodians of self-managed superannuation funds where the fund trustee was the purchaser. Thirdly, an exemption applies to transfers of property as a consequence of the break-up of a marriage or de facto relationship. Sadly, one in three relationships ends in divorce. The bill provides two new exemptions. One exemption is provided for transfers of fund assets arising from members to a MySuper fund, and one is provided for an exemption from duty on the vesting of land upon the merger of credit unions and mutual banks.

Ms Sophie Cotsis:

Say it with passion.

Mr GEOFF PROVEST:

I am. This is very serious. A lot of the matters we cover in this place are common sense.

TEMPORARY SPEAKER (Mr Adam Crouch):

Order! The member for Canterbury will come to order.

Mr GEOFF PROVEST:

We are here for the betterment of the people of New South Wales. The effect on revenue of these concessions is minor, as the transactions in question are not common or the result of new developments where no duty liability existed. However, individual taxpayers will be relieved from paying significant duty liability in circumstances where liability was not intended. This is an important amendment. It gets rid of red tape and simplifies the whole process so that the people of New South Wales will have a deeper understanding of this legislation, local people can be employed and we can get on with the important things in life. I commend the bill to the House.

Mr STEPHEN BROMHEAD (Myall Lakes) (19:23:21):

I speak in support of the State Revenue Legislation Amendment Bill 2017. It was lovely to listen to the member for Tweed, who can speak with great authority on divorce, property settlements and the De Facto Relationships Act.

Mr Gareth Ward:

Point of order: I ask that the member for Myall Lakes return to the leave of the bill.

TEMPORARY SPEAKER (Mr Adam Crouch):

Order! The member for Myall Lakes will return to the leave of the bill.

Mr STEPHEN BROMHEAD:

I am talking about the bill. The previous speaker made a great contribution to the debate on the State Revenue Legislation Amendment Bill 2017, which was introduced by Minister Victor Dominello, who earlier today spoke in reply on the Fines Amendment Bill 2017. These two bills have come before the House because this Government believes in good governance for New South Wales. They are two examples of bills that improve governance in New South Wales, for victims of crime and, in this case, on the matter of revenues and duties. The objects of this bill are as follows:

(a) to amend the Duties Act 1997:

(i)to clarify the application of that Act to instruments that are in a digital form, and

(ii)to provide for the charging of nominal duty (rather than ad valorem duty) on certain transfers of property to the custodian of a trustee of a self-managed superannuation fund where duty on an agreement for the sale or transfer of the property has been paid and the purchaser is the trustee, and

(iii)to clarify the matters of which the Chief Commissioner must be satisfied for nominal duty (rather than ad valorem duty) to be charged on transfers of trust property that are a consequence of the retirement or appointment of a trustee, and

(iv)to provide for an exemption from duty for the vesting of land occurring as a consequence of the merger of credit unions or of authorised deposit-taking institutions with mutual structures, and

(v)to extend existing exemptions from duty on transfers following the break-up of marriages and de facto relationships to cover such transfers to trustees under the Bankruptcy Act 1966 of the Commonwealth, and

(vi)to make further provision in relation to the aggregation of interests acquired by a person in a landholder for the purposes of liability for landholder duty, and

(vii)to ensure that the liabilities of a landholder are disregarded in determining whether a person has an interest in a landholder that makes the person liable for landholder duty, and

(viii)to make further provision in relation to the tracing of interests through linked entities of a unit trust scheme or company for the purposes of determining whether the scheme or company is a landholder, and

(ix)to extend an existing anti-avoidance measure (which ensures that certain land holdings transferred from a unit trust scheme or company within 12 months of a person acquiring an interest in the scheme or company are counted when determining whether the scheme or company is a landholder) so that the measure covers agreements for the sale or transfer of land holdings, and

(x)to prevent the avoidance of liability for landholder duty by the use of arrangements that include combined put and call options (as an alternative to an agreement for sale or transfer), and

(xi)to make further provision to prevent a person who enters into an agreement to purchase shares or units in a landholder avoiding landholder duty by opting to defer registration of the purchase, and

(xii)to extend existing exemptions from duty connected with transfers between family members of land used for primary production to (among other things) cover transfers from a self-managed superannuation fund where a member of the fund and the person to whom the land is transferred are family members, and

(xiii)to provide for an exemption from duty connected with transfers of property between superannuation funds that are required to be made under transitional arrangements relating to the Commonwealth's MySuper reforms, and

(xiv)to make further provision for the test to be applied in determining the amount of duty that a person is liable to pay as a result of a tax avoidance scheme that is of an artificial, blatant or contrived nature, and

(xv)to extend the circumstances in which a trustee and another trustee, a natural person and a trustee, and a private company and a trustee are treated as being "associated" for the purposes of liability for duty, by tracing through to sub-trusts, and

(xvi)to make other minor and consequential amendments,

(b)to amend the Land Tax Management Act 1956 to require a Government entity that leases land to make the lessee aware that the lessee can be liable for land tax on the land,

(c)to amend the Payroll Tax Act 2007:

(i)to provide that certain wages paid by employment agents who on-hire their common law employees to clients of the agents are exempt from payroll tax if wages paid by the clients to their own employees are "exempt wages", and

(ii)to exempt from payroll tax wages paid under the Supporting Leave for Living Organ Donors Programme, and

(iii)to update other provisions of that Act,

(d)to amend various Acts to permit disclosures to the Australian Charities and Not-for-profits Commission.

The bill amends several Acts relating to the taxes and duties functions of the Office of State Revenue. In his second reading speech, the Minister advised that many of the amendments are minor or housekeeping amendments that will keep tax laws effective and current. He said:

This will improve equity by ensuring clients in similar circumstances have similar outcomes, combat tax avoidance practices by ensuring taxpayer liabilities are consistent with the policy intent of the legislation, reduce red tape by removing uncertainty, increase harmonisation with other States and Territories where possible, and improve administrative simplicity.

It was interesting that the Legislation Review Committee looked, first, at privacy. In this respect, the committee said:

3.The bill amends the following Acts to allow information obtained in the course of the work under the legislation to be disclosed to the Australian Charities and Not-for-profits Commission:

First Home Owner Grant (New Homes) Act 2000

(a) ,

Regional Relocations Grants (Skills Incentive) Act 2011

(b) ,

Small Business Grants (Employment Incentive) Act 2015

(c) , and

Taxation Administration Act 1996

(d) …

It continued:

4.In each of these Acts, there is a general presumption that such information is not to be disclosed, except in certain circumstances such as to organisations or persons specifically mentioned in the legislation, with the consent the person the information relates to, or as otherwise authorised by law. An unauthorised disclosure can result in a maximum penalty of $11,000.

5.The Australian Charities and Not-for-profits Commission is an independent national regulator of charities which is established by the Australian Charities and Not-for-profits Commission Act 2012 (Cth).

The Bill will permit the Office of State Revenue to disclose information obtained in the course of work under certain taxes and grants legislation to the Australian Charities and Not-for-profits Commission (the Commonwealth Commission). Such information is currently subject to limited disclosure. Therefore, inappropriate disclosure could impact on the right to privacy.

However, the Committee notes that some information about grants and taxes is likely to be relevant to the regulation of the charities and not-for-profits sector. In addition, the NSW Office of State Revenue will need to comply with the broader NSW privacy laws when disclosing personal information. Likewise, the Commonwealth Commission will need to comply with similar Commonwealth privacy laws in how it collects, uses, discloses and otherwise manages the personal information it receives. For these reasons, the Committee makes no further comments.

It is good to see that the committee was in a position to review any potential infringement of rights. I would like to turn now to the amendment of the Duties Act 1997, specifically section 18, no double duty. This legislation will omit section 18 (3) (d) and insert instead:

(d) at the time the agreement was entered into, and at the completion or settlement of the agreement:

(i)the purchaser under the agreement (other than a purchaser who purchased as a trustee) and the transferee under the transfer were related persons, or

(ii)if the purchaser purchased as a trustee (other than as a trustee of a self-managed superannuation fund)—the transferee and the beneficiary were related persons, or

(iii)if the purchaser purchased as a trustee of a self-managed superannuation fund—the transferee under the transfer was the custodian of that trustee.

Under this bill section 54 (2A) of the old legislation is omitted and a new subsection is inserted, which relates to the duty of $50. In the circumstances, I commend the bill to the House.

Debate adjourned.