❓ Opposition questions the necessity of a new stamp duty on commercial goods bought through hire purchase agreements, given budget surpluses. The Treasurer defends the measure as a business tax reform, not a new tax, designed to remove distortions and align with other states.
AnsweredQoN 1334Legislative Council
QuestionView source ↗
I refer the Treasurer to Labor’s new tax in the form of a stamp duty on commercial goods bought through hire purchase agreements. (1) With the Government enjoying budget revenue growth of $763 million during 2002-03, of which $635 million was above budget estimates, can the Treasurer confirm that the budget is not in a desperate situation requiring an extra $10 million through another new tax? (2) Given the new tax is imposed on the purchase of goods, just like the Commonwealth goods and services tax, why should the hire purchase stamp duty not be seen as the beginning of a broad-based state goods tax? Hon NICK GRIFFITHS
AnswerView source ↗
I thank the member for some notice of this question. (1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
(1) With the Government enjoying budget revenue growth of $763 million during 2002-03, of which $635 million was above budget estimates, can the Treasurer confirm that the budget is not in a desperate situation requiring an extra $10 million through another new tax? (2) Given the new tax is imposed on the purchase of goods, just like the Commonwealth goods and services tax, why should the hire purchase stamp duty not be seen as the beginning of a broad-based state goods tax? Hon NICK GRIFFITHS replied: I thank the member for some notice of this question. (1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
(2) Given the new tax is imposed on the purchase of goods, just like the Commonwealth goods and services tax, why should the hire purchase stamp duty not be seen as the beginning of a broad-based state goods tax? Hon NICK GRIFFITHS replied: I thank the member for some notice of this question. (1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
Hon NICK GRIFFITHS replied: I thank the member for some notice of this question. (1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
I thank the member for some notice of this question. (1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
(1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
(1) With the Government enjoying budget revenue growth of $763 million during 2002-03, of which $635 million was above budget estimates, can the Treasurer confirm that the budget is not in a desperate situation requiring an extra $10 million through another new tax? (2) Given the new tax is imposed on the purchase of goods, just like the Commonwealth goods and services tax, why should the hire purchase stamp duty not be seen as the beginning of a broad-based state goods tax? Hon NICK GRIFFITHS replied: I thank the member for some notice of this question. (1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
(2) Given the new tax is imposed on the purchase of goods, just like the Commonwealth goods and services tax, why should the hire purchase stamp duty not be seen as the beginning of a broad-based state goods tax? Hon NICK GRIFFITHS replied: I thank the member for some notice of this question. (1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
Hon NICK GRIFFITHS replied: I thank the member for some notice of this question. (1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
I thank the member for some notice of this question. (1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
(1) This measure is part of the package of business tax review measures that will, in overall terms, return $70 million to the Western Australian community and businesses over four years. Possibly, for this reason, the Liberal Opposition joined the Government in supporting this legislation in the Legislative Assembly. Replacing Western Australia’s current rental business duty regime with a hire-of-goods regime - that is, bringing hire purchase agreements into the base - with a reduced rate of duty and increased exemption threshold will remove an unfair distortion that currently exists, favouring hire purchase agreements over lease agreements, and will harmonise Western Australia’s system with that of other States. The changes to the rental business duty as part of the business tax review are reforms to an existing tax, rather than a new tax. The measures to expand the base, reduce the rate of duty and increase the exemption threshold are together broadly revenue neutral. Moreover, these measures, which were developed in consultation with industry, were announced well in advance of the 2003-04 budget. This highlights that these measures are being introduced for the purposes of improving the tax system, rather than being budgetary in nature. (2) I should clarify that the stamp duty will be applied to hire purchase agreements and not on the purchase of goods. In addition, the specific exclusion of consumer credit arrangements, such as those offered by electrical and department stores, demonstrates that the measure is being introduced for the purpose of improving the tax system rather than being the beginning of broad-based state tax on goods.
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