State Tax Laws Amendment (Budget and Other Measures) Bill 2013

Introduction Print

EXPLANATORY MEMORANDUM

General

The Bill amends the Congestion Levy Act 2005 to increase the amount of the levy and extend it to short stay parking spaces in the central business district and inner Melbourne.

The Bill amends the Duties Act 2000 to—

bring forward the introduction of the 40% duty reduction for eligible first home buyers from 1 January 2014 to 1 July 2013;

ensure that eligible first home buyers who purchase a home for under $130 000 qualify for the first home buyer duty reduction;

increase the threshold for the young farmers' duty exemption and concession on single title purchases;

extend the exemption from motor vehicle duty for vehicles modified to carry incapacitated passengers to include modified vehicles registered in the name of a relative or carer of an incapacitated person;

ensure that concessions that apply to listed companies under the landholder duty provisions extend to companies listed on the New Zealand Stock Exchange;

make technical amendments to the landholder provisions to address administrative and technical issues.

The Bill amends the Fire Services Property Levy Act 2012 to address a number of minor administrative issues that have arisen during implementation of the fire services property levy.

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The Bill amends the First Home Owner Grant Act 2000 to—

restrict eligibility for the first home owner grant to buyers of new residential homes from 1 July 2013;

increase the amount of the first home owner grant for buyers of new residential homes from $7000 to $10 000;

extend the first home owner grant residence requirement from 6 months to 12 months;

permit the disclosure of certain information obtained under the First Home Owner Grant Act 2000 to the Legal Services Board and the Legal Services Commissioner.

The Bill amends the Liquor Control Reform Act 1998 to provide for the delegation of certain powers by the Treasurer to the Commissioner of State Revenue.

The Bill amends the Payroll Tax Act 2007 to clarify the payroll tax treatment of payments made to owner-drivers and other contractors.

The Bill amends the Taxation Administration Act 1997 in relation to staffing, delegation and disclosure of information.

The Bill amends the Water Act 1989 to expressly provide for certain functions to be performed by the Commissioner of State Revenue.

Clause Notes

PART 1—PRELIMINARY

Part 1 of the Bill outlines the purposes of the Bill and contains the commencement provisions.

Clause 1 outlines the purposes of the Bill.

Clause 2 provides that the Bill, except for Part 2, sections 13 and 27 and Parts 5 and 7, will commence on the day after the Bill receives Royal Assent. Part 5 of the Bill which amends the First Home Owner Grant Act 2000 and Part 7 which amends the Payroll Tax Act 2007 come into effect on 1 July 2013. Section 13 which includes NZX Limited in the definition of listed company and listed trust in the Duties Act 2000 is taken to have come into effect on 8 May 2013, the day of the second reading speech for the Bill. The retrospective commencement date is intended to prevent the distortion of investment decisions between the date of announcement and the passage of the Bill. Section 27 which

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corrects an omission in the new landholder duty transitional provisions is taken to have come into effect on 1 July 2012 to coincide with the date on which the landholder duty regime commenced. Part 2 which amends the Congestion Levy Act 2005 commences on 1 January 2014.

PART 2—CONGESTION LEVY ACT 2005

Part 2 of the Bill amends the Congestion Levy Act 2005 to increase the amount of the levy to $1300 for each leviable parking space and extend the levy to short stay parking spaces within the central business district and inner Melbourne. These measures were announced in the 2013–14 Budget.

Clause 3 extends the purpose of the Congestion Levy Act 2005 by omitting the term "long stay" from section 1 of the Congestion Levy Act 2005. This ensures that the purpose of that Act is to impose a levy on all non-exempt parking spaces in the central business district and inner Melbourne to reduce traffic congestion.

Clause 4 Subclause (1)(a) amends section 3(1) of the Congestion Levy Act 2005 to omit the term "long stay" in the definition of leviable parking space. Subject to any exemptions, this amendment ensures that all parking spaces in a car park are leviable, regardless of whether they are set aside or used for short stay or long stay purposes.

Subclause (1)(b) amends section 3(1) of the Congestion Levy Act 2005 to repeal the definition of long stay parking space which was previously defined as having the meaning set out in section 4 of that Act. This definition is no longer required because the levy is intended to apply to all non-exempt parking spaces from 1 January 2014.

Subclause (2) repeals section 4 of the Congestion Levy Act 2005, which defined long stay parking space.

Clause 5 Subclause (1) amends section 10(3) of the Congestion Levy Act 2005 to insert the words "up to and including 2013" after "subsequent year". Section 10(3) provides that the amount of levy for 2008 and each subsequent year is the CPI adjusted levy for that year for each leviable parking space. The amount of levy in 2007 was $800 and since 2008 the levy has been CPI adjusted from the amount of the levy for the previous year. To give effect to the increase in levy amount in 2014, this amendment ensures

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that the levy is not CPI adjusted from the 2013 amount of $930 for the 2014 levy year.

Subclause (2) inserts a new section 10(3A) into the Congestion Levy Act 2005 to increase the amount of levy for each leviable parking space to $1300 in 2014 and inserts a new section 10(3B) to ensure that the levy amount for 2015 is CPI adjusted from the 2014 amount of $1300. In subsequent years the levy will be adjusted from the amount that applied in the previous year. For example, the 2016 levy amount will be CPI adjusted from the 2015 levy amount.

Clause 6 inserts a note at the foot of section 13 of the Congestion Levy Act 2005 drawing attention to the transitional provision in section 40 which is relevant to the application of section 13 to the levy for 2014.

Clause 7 repeals sections 14 and 15 of the Congestion Levy Act 2005 which provided for the statutory ratio. As the levy was previously limited to long stay parking spaces, section 14 allowed the Commissioner of State Revenue to assume that 75% of the parking spaces in a public car park were used as long stay parking spaces at any time in the year prior to the levy year and the remaining 25% were short stay parking spaces. Section 15 allowed the Commissioner of State Revenue to approve a lower ratio if the public car park had a lower incidence of long stay parking. These provisions are now redundant as both short stay and long stay parking spaces will be leviable from 2014.

Clause 8 Subclause (1) amends section 16(1) and 17(1) of the Congestion Levy Act 2005 by omitting the words "set aside or". This will ensure that the exemptions which apply to residential parking and parking for visitors and loading bays will only apply where the parking space is used exclusively for, rather than set aside for, the relevant exempt purpose.

Subclause (2) substitutes the current section 17(2) of the Congestion Levy Act 2005, which provides an exemption for parking spaces set aside and used exclusively for the parking of a motor vehicle by a person whilst a patient of a hospital or whilst visiting or accompanying a patient of a hospital. This exemption was only intended to apply to parking spaces provided by a hospital. The substituted section 17(2) ensures that the exemption operates as intended by limiting the exemption to

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parking spaces owned by or leased to a hospital that are used exclusively for the parking of a motor vehicle by a person while a patient of the hospital or while visiting or accompanying a patient of the hospital.

Clause 9 substitutes section 20 of the Congestion Levy Act 2005, which provides an exemption for parking spaces which are only temporarily available or in existence for a period of time for special events. This exemption applied to a parking space set aside or used exclusively for parking at a particular event, that at all other times was not available for the parking of a motor vehicle. The new section 20 only exempts a parking space if it is used exclusively for the parking, without charge, of a motor vehicle in conjunction with a particular event, and at all other times is not available for the parking of a motor vehicle.

Clause 10 amends sections 22, 23 and 24 of the Congestion Levy Act 2005 by omitting the words "set aside or". This will ensure that the exemptions which apply to parking for shift workers, garaging of fleet vehicles, bus layovers, car sale displays and car service spaces will only apply where the parking space is used exclusively for, rather than set aside for, an exempt purpose.

Clause 11 Paragraph (a) amends section 26(2) of the Congestion Levy Act 2005 by omitting the words "taking into account the statutory ratio for the public car park under section 14 or 15 (as the case may be)". Section 26 applies a concession for each space in a public car park that is exempt for part of the year, or not available as a parking space for a full year. This amendment removes a redundant reference to the statutory ratio, which is repealed by clause 7 of the Bill. The statutory ratio was previously required to be taken into account when calculating the amount of concession.

Paragraph (b) substitutes a new example at the foot of section 26(2) to explain how the part year concession for parking spaces in a public car park operates from 2014.

Clause 12 inserts a new section 40 in the Congestion Levy Act 2005 which provides the transitional arrangements for the increase in levy amount and extension of the levy to short stay parking spaces in 2014.

The new section 40(1) provides that, for the purposes of assessing the levy for 2014, section 13 applies as if a reference in

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that section to each space on premises that existed as a leviable parking space at any time in the previous year were a reference to each space on the premises that existed as a parking space at any time in the previous year (other than an exempt parking space) whether or not the parking space was a long stay parking space. This provision is required because assessment of the levy in 2014 will be based on the usage of all non-exempt parking spaces in 2013, including those that were not long stay parking spaces and therefore not leviable in 2013.

For the avoidance of doubt the new subsection 40(2) provides that nothing in the State Tax Laws Amendment (Budget and Other Measures) Act 2013 affects the assessment of the levy for any year before 2014.

The new section 40(3) preserves the definition of long stay parking space in section 4 as in force immediately before the commencement of Part 2 of the State Tax Laws Amendment (Budget and Other Measures) Act 2013 for the purposes of this transitional provision.

PART 3—DUTIES ACT 2000

Part 3 of the Bill amends the Duties Act 2000 to bring forward a duty reduction for eligible first home buyers from 1 January 2014 to 1 July 2013, ensure that the eligible first home buyer duty reduction operates as intended, increase the threshold for the young farmers' duty exemption and concession on single title purchases, extend the exemption for vehicles modified to carry incapacitated passengers and make amendments to the landholder provisions.

Clause 13 inserts into section 3(1) of the Duties Act 2000 a definition of NZX which is "the company registered in New Zealand known as NZX Limited".

The definition of listed company is amended to include a corporation all the shares in which are quoted on the NZX.

The definition of listed trust is amended to include a unit trust scheme all the units in which are quoted on the NZX.

These amendments will support the unique trade and investment relationship between Australia and New Zealand by ensuring that concessions that apply to listed companies and listed trusts under the landholder duty provisions extend to companies listed on the largest exchange in New Zealand, NZX Limited.

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Clause 14 Subclause (1)(a) substitutes paragraph (b) of the definition of listed company in section 3(1) of the Duties Act 2000 so that a listed company includes a "a corporation all the shares in which are quoted on any exchange of the World Federation of Exchanges (other than the ASX or an equivalent exchange)".

Subclause (1)(b) substitutes paragraph (b) of the definition of listed trust in section 3(1) of the Duties Act 2000 so that a listed trust includes "a unit trust scheme all the units in which are quoted on any exchange of the World Federation of Exchanges (other than the ASX or an equivalent exchange)".

Subclause (2) repeals section 3(4) of the Duties Act 2000.

These amendments remove the requirement for the Commissioner of State Revenue to declare an entity to be a listed company, listed unit trust scheme or private company. This requirement was necessary as an anti avoidance measure under the previous land rich duty model, because acquisitions in listed entities were not subject to duty. This requirement is now redundant, as listed companies and unit trust schemes form part of the tax base under the landholder duty model.

Clause 15 repeals the definition of eligible first home buyer in section 57G(1) of the Duties Act 2000. This is no longer required in light of the new section 57JA substituted by clause 18.

Clause 16 amends section 57I(1)(d) of the Duties Act 2000 to omit "more than $130 000 but". This amendment ensures that a transferee who purchases a home for no more than $600 000 will receive the duty reduction available under section 57JA of that Act.

Clause 17 amends the note to section 57J of the Duties Act 2000 to clarify that a principal place of residence purchase of not more than $130 000 or more than $500 000 but not more than $600 000 is chargeable at the general rate of duty at the rate set out in section 28(1) of the Duties Act 2000, subject to any exemption or concession other than in Division 4A of Part 5 of that Act.

Clause 18 substitutes section 57JA of the Duties Act 2000 which provides a duty reduction for certain first home buyers. The new section 57JA brings forward the introduction of the 40% first

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home buyer duty reduction from 1 January 2014 to 1 July 2013 and makes consequential amendments as a result of amendments in the Bill to the First Home Owner Grant Act 2000 which will restrict eligibility for the first home owner grant to buyers of new homes. These measures were announced in the 2013–14 Budget.

New section 57JA(1) provides that the reduction of duty for certain first home buyers will apply to a transferee to whom a first home owner grant is paid or payable under section 7 of the First Home Owner Grant Act 2000 or a transferee of an existing home to whom a first home owner grant would have been payable under section 7 of that Act if the home were a new home within the meaning of that Act.

This amendment ensures that certain first home buyers of both new and existing homes remain eligible to receive the reduction of duty, after eligibility for the first home owner grant is restricted to buyers of new homes from 1 July 2013.

New section 57JA(2) sets out the duty reduction available to certain first home buyers. The new section 57JA(2) brings forward the additional 10% duty reduction scheduled for 1 January 2014 to 1 July 2013. This will result in a total 40% reduction in the duty chargeable on a principal place of residence transfer to certain first home buyers from 1 July 2013.

Clause 19 amends section 69AD(1)(d)(i) of the Duties Act 2000 to substitute "$750 000" for "$400 000". Section 69AD sets out the eligibility requirements for the duty exemption or concession for young farmers. The amendment ensures that a young farmer may qualify for the exemption or concession in the case of one transfer of dutiable property where the value of the dutiable property does not exceed $750 000.

Clause 20 substitutes section 69AE of the Duties Act 2000 which provides for the calculation of the young farmers' exemption or concession on the transfer of a single parcel of land or partial interest in a single parcel of land.

New section 69AE(1) provides that section 69AE applies for the purposes of the exemption or concession for young farmers under section 69AD in respect of dutiable transactions involving the transfer of one dutiable farmland property.

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New section 69AE(2) provides that eligible young farmers who purchase a dutiable property, the value of which does not exceed $600 000, are entitled to an exemption from duty in respect of $300 000 of the dutiable value of the dutiable transaction. This will ensure the exemption operates more equitably between single farm titles and multiple-title purchases. Prior to the amendment, a purchase of farmland comprising two farm titles, each of which was worth $300 000, would receive a full duty exemption on one of the titles. However, a single farm title worth $600 000 would not be eligible for any benefit.

Subclause (1) contains two examples which set out how the exemption or concession is to be applied in practice.

New section 69AE(3) provides young farmers with a concession from duty where the dutiable value of the dutiable property exceeds $600 000 but does not exceed $750 000. The concession is intended to prevent a sudden spike in the duty payable for purchases just over the full exemption threshold of $600 000. It also inserts a new formula for calculating the young farmers' duty concession.

Clause 21 amends section 78(4) of the Duties Act 2000 to substitute "acquisitions" with "the acquisition or holding". Section 78 defines a relevant acquisition for the purposes of the landholder provisions. Relevant acquisitions, in turn, rely on the definition of associated person in section 3(1) of the Duties Act 2000. This is a technical amendment to ensure that qualified investors of a wholesale unit trust scheme are not taken to be associated persons of other qualified investors in relation to both the holding of interests by qualified investors and the acquisition of interests by qualified investors in a wholesale unit trust scheme when determining whether a wholesale unit trust scheme qualifies for registration under the Duties Act 2000.

Clause 22 amends section 81(5) of the Duties Act 2000. Section 81 deals with acquisitions of economic entitlements as part of the landholder duty scheme. Duty is imposed if a person acquires an interest under an economic entitlement (which is a measure of the economic benefit obtained by the person) of 50% or more. The benefit obtained must relate to a private landholder but does not have to be in a private landholder for duty to be imposed.

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This amendment ensures that position by omitting "in a private landholder" from section 81(5).

Clause 23 amends section 89B(3) of the Duties Act 2000. Section 89B of the Duties Act 2000 operates to impose duty on acquisitions made under an agreement or arrangement that causes the conversion of a private unit trust scheme to a public unit trust scheme. Clause 23 amends section 89B(3) by substituting "acquisition of the last interest under the agreement or arrangement" with "date on which the private unit trust scheme became a public unit trust scheme". This specifies that the relevant acquisition, and hence the liability to duty, is taken to be made on the date that the private unit trust scheme satisfies the definition of a public unit trust scheme. This is intended to ease the compliance burden for taxpayers by making it easier to identify when duty becomes payable under a conversion arrangement.

Clause 24 amends section 89C of the Duties Act 2000. Section 89C operates to impose duty on acquisitions made under an agreement or arrangement that causes the conversion of a private company to a listed company. Clause 24 amends Section 89C by substituting "acquisition of the last interest under the agreement or arrangement" with "date on which the private company became a listed company". This specifies that the relevant acquisition, and hence the liability to duty, is taken to be made on the date that the private company satisfies the definition of a listed company. This is intended to ease the compliance burden for taxpayers by making it easier to identify when duty becomes payable under a conversion arrangement.

Clause 25 amends section 89P(2) of the Duties Act 2000 to correct a typographical error.

Clause 26 amends section 233C(1) of the Duties Act 2000 which provides an exemption from duty on an application for registration or transfer of registration of a vehicle in the name of an incapacitated person or the parent or legal guardian of an incapacitated person who is a minor. The vehicle must be specially modified to carry at least one wheelchair and be used to carry an incapacitated person whose mobility is seriously impaired.

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Subclause (1) extends this exemption to an application for registration or transfer of registration of a vehicle in the name of a relative or carer of an incapacitated person.

Subclause (2) inserts a new section 233C(3) to provide that carer has the same meaning as in the Carers Recognition Act 2012 and means a person, including a person under the age of 18 years, who provides care to another person with whom he or she is in a care relationship. Relative is defined in section 3(1) of the Duties Act 2000.

Clause 27 amends Schedule 2 to the Duties Act 2000 by inserting a new clause 31(7A) to ensure that certain acquisitions made prior to 1 July 2009 are not aggregated with acquisitions made under the landholder duty model introduced on 1 July 2012. New clause 31(7A) means that an acquisition by a person before 1 July 2009 of an interest in a private unit trust scheme, private company, wholesale unit trust scheme or public unit trust scheme that was not land rich under the Duties Act 2000 as in force on the date of that acquisition is not to be taken into account in determining whether an acquisition on or after 1 July 2012 of an interest in the scheme or company is a relevant acquisition of a further interest under section 78(1)(b).

PART 4—FIRE SERVICES PROPERTY LEVY ACT 2012

Part 4 of the Bill amends the Fire Services Property Levy Act 2012 to address minor technical and administrative issues identified in the implementation of the fire services property levy.

Clause 28 substitutes section 8 of the Fire Services Property Levy Act 2012 to provide that all land is leviable unless it is exempt under section 10. The previous reference to separate ownership or occupation has been removed because whether the land is subject to separate ownership or occupation is not relevant to whether land is leviable. However, separate occupation may impact on whether a portion of a parcel of land is treated as separate leviable land, which is assessed for the levy separately.

Clause 29 Subclause (1) substitutes the heading to section 9 of the Fire Services Property Levy Act 2012 to better reflect the operation of the provision by referring to—

"How parcels of land are treated for levy purposes".

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Subclause (2) substitutes section 9(1) of the Fire Services Property Levy Act 2012 to provide that section 9 sets out how parcels of land are to be treated for the purpose of assessing the levy. This is consistent with the intention of section 9.

Subclause (3) substitutes section 9(8) of the Fire Services Property Levy Act 2012 to ensure that councils are required to separately assess the levy in respect of each parcel of land for which they have a separate valuation. This ensures that the levy is assessed in the same way as council rates, consistent with section 158A of the Local Government Act 1989.

Subclause (4) repeals section 9(9), (10), (11) and (12) of the Fire Services Property Levy Act 2012, all of which operated in conjunction with the previous section 9(8) to provide a single farm enterprise exemption. These provisions have been replaced by new section 9A of the Fire Services Property Levy Act 2012 (see clause 30).

Clause 30 inserts a new section 9A into the Fire Services Property Levy Act 2012 which provides a single farm enterprise exemption. The single farm enterprise exemption allows a person to pay the fixed charge component of the fire services property levy once in respect of multiple parcels of farmland that are used to operate a single farming enterprise. The new section 9A modifies the exemption that was provided in section 9(8) to (12) by clarifying that it may apply across farmland that is owned by different individuals or entities provided that the land is farmed as a single enterprise and occupied by the same person(s). This is consistent with the equivalent exemption for municipal charges under the Local Government Act 1989.

It also clarifies that a person must notify all relevant local councils of any change in circumstances that could affect a person's eligibility for an exemption. This modification is required because the single farm enterprise exemption may apply to farmland across various municipal districts.

Clause 31 Subclause (1) amends section 10(1) of the Fire Services Property Levy Act 2012 to clarify that state owned land that is leased or licensed to the Commonwealth or a public body is exempt from the fire services property levy. Where state owned land is leased, subleased, licensed or sublicensed to any person

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other than the Commonwealth or a public body it will be leviable.

Subclause (1) also amends section 10(1) to ensure that the following land is non-leviable—

land owned by the Director of Housing that is leased or licensed to an individual or registered agency for public housing;

land leased to the Director of Housing by the Crown, a public body or the Commonwealth that is subleased to an individual or registered agency for the purpose of public housing.

Subclause (2) inserts definitions of Director of Housing, public housing and registered agency into section 10 of the Fire Services Property Levy Act 2012 by reference to the Housing Act 1983.

Clause 32 Subclause (1) inserts a new section 12(6) into the Fire Services Property Levy Act 2012 to provide that, if the Minister does not determine and specify a levy rate by 31 May for the next levy year, the levy rate for the next levy year is the most recent levy rate set by the Minister. This provision applies to levy rates determined based on the location of leviable land and the land use classification of leviable land.

Subclause (2) repeals section 14(2) of the Fire Services Property Levy Act 2012 which provided that, if the Minister does not determine and specify a levy rate based on location by 31 May for the next levy year, the levy rate for the next levy year is the most recent levy rate based on location set by the Minister. The introduction of new section 12(6) means section 14(2) is no longer required.

Clause 33 inserts new Australian Valuation Property Classification Codes (AVPCCs) into section 20(1)(c) of the Fire Services Property Levy Act 2012. Section 20 provides that only the fixed charge is payable in respect of certain council-owned recreation land, such as local football ovals and scout halls, which is available for public use and not operated for commercial purposes.

This amendment ensures that council-owned land with AVPCCs 980-988 (River, Creek, Floodway Reserves) is subject to the fixed charge only component of the fire services property levy,

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provided that the land is available for public use and is not operated for commercial purposes.

Clause 34 substitutes section 39(4) of the Fire Services Property Levy Act 2012. Section 39 requires councils to issue a revised levy assessment notice if a supplementary valuation results in a variation of the levy amount payable by the owner of land. Section 39(4) currently requires a council to pay the landowner interest on the refund amount calculated from the day the Valuer-General certifies the supplementary valuation.

New section 39(4) provides that councils will only be required to pay interest on a refund if more than 28 days have elapsed since the Valuer General certified the supplementary valuation. This will ensure that councils have a reasonable period to update their records and issue a refund before interest becomes payable.

Clause 35 amends section 45 of the Fire Services Property Levy Act 2012 to correct an omission by confirming that the Commissioner of State Revenue may delegate his or her functions under the Fire Services Property Levy Act 2012 to any person employed in the administration or enforcement of that Act or any other law under the general administration of the Commissioner.

Clause 36 amends section 65 of the Fire Services Property Levy Act 2012 to—

correct the internal numbering of the section; and

make the Fire Services Levy Monitor, which was established after the commencement of the Fire Services Property Levy Act 2012, an authorised recipient of information obtained under, or in relation to, to the administration of the Fire Services Property Levy Act 2012. As a result of this amendment, councils and the State Revenue Office will be permitted to disclose information to the Fire Services Levy Monitor, who has been appointed under the Fire Services Levy Monitor Act 2012 to ensure consumers are informed and their interests protected during the transition to the fire services property levy.

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PART 5—FIRST HOME OWNER GRANT ACT 2000

Part 5 of the Bill amends the First Home Owner Grant Act 2000 to restrict eligibility for the first home owner grant to a buyer of a new home from 1 July 2013, increase the amount of the first home owner grant for a buyer of a new home from $7000 to $10 000, extend the period of residency required to be eligible for the first home owner grant and permit the disclosure of protected information to the Legal Services Board and the Legal Services Commissioner.

Clause 37 substitutes references to "6 months" in section 3(1), 8(2)(a), 12(1), 12(2), 20(1) and 22(3) of the First Home Owner Grant Act 2000 with "12 months" to give effect to the extension of the residency requirement from 6 to 12 months announced in the 2012–13 Budget Update.

Subclause (1) amends the definition of residence requirement in section 3(1) of the First Home Owner Grant Act 2000 to mean the requirement that an applicant for a first home owner grant must occupy their first home as their principal place of residence for a continuous period of at least 12 months commencing within the 12 month period immediately after the completion of the eligible transaction, or a longer period approved by the Commissioner of State Revenue.

Subclause (2) amends section 8(2)(a) of the First Home Owner Grant Act 2000 to ensure that the Commissioner of State Revenue may exempt a person from the requirement that a first home owner grant applicant is at least 18 years of age if he or she is satisfied, among other things, that that the home to which the application relates will be occupied as the applicant's principal place of residence for a continuous period of 12 months commencing within the 12 month period immediately after completion of the eligible transaction or within a longer period approved by the Commissioner of State Revenue.

Subclause (3) amends section 12(1) of the First Home Owner Grant Act 2000 to provide that an applicant for the first home owner grant must occupy the home to which the application relates as the applicant's principal place of residence for a continuous period of 12 months (or the lesser period approved by the Commissioner of State Revenue) commencing within the 12 month period immediately after completion of the eligible

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transaction, or within a longer period approved by the Commissioner.

Subclause (4) amends section 12(2) of the First Home Owner Grant Act 2000 to provide that the Commissioner of State Revenue may approve a lesser period for occupation under section 12(1) if the applicant cannot comply with the requirement to occupy the home for 12 months.

Subclause (5) amends section 20(1) of the First Home Owner Grant Act 2000 to provide for payment in anticipation of compliance with the residence requirement if the Commissioner of State Revenue is satisfied that each applicant intends to occupy their first home as their principal place of residence for a continuous period of at least 12 months commencing within the 12 month period immediately after the completion of the eligible transaction, or a longer period approved by the Commissioner of State Revenue.

Subclause (6) amends section 22(3) of the First Home Owner Grant Act 2000 to deem the 12 month residence requirement to be satisfied where a first home owner grant applicant dies prior to meeting the residence requirement.

The new 12 month residency requirement will apply to eligible transactions which complete on or after 1 July 2013.

Clause 38 inserts two new definitions into section 3(1) of the First Home Owner Grant Act 2000—

new home means a home that is a new residential premises;

new residential premises has the same meaning as in section 40–75 of the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth.

Essentially, residential premises will be new residential premises if they are newly built or substantially renovated homes that have not previously been sold or lived in as residential premises.

These definitions are necessary as the first home owner grant will only be available for new residential premises from 1 July 2013. These definitions support the amendments made to section 13(1) of the First Home Owner Grant Act 2000 relating to the types of transactions which are eligible for the first home owner grant.

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Clause 39 makes amendments to section 13 of the First Home Owner Grant Act 2000. Section 13 sets out what constitutes an eligible transaction for the purposes of the first home owner grant.

Subclause (1) inserts "and before 1 July 2013" after "1 July 2000" into the section 13(1)(a). This will ensure the first home owner grant is available for both new and established homes where a contract is signed before 1 July 2013.

Subclause (2) inserts a new subsection (ab) into section 13(1) of the First Home Owner Grant Act 2000 to include a contract made on or after 1 July 2013 for the purchase of a new home in Victoria as an eligible transaction. This will ensure the first home owner grant is only available on the purchase of a new home where a contract is signed on or after 1 July 2013.

Clause 40 repeals section 13A(3) of the First Home Owner Grant Act 2000. This section is no longer required as the definition of new residential premises has been relocated to section 3(1).

Clause 41 makes amendments to section 18 of the First Home Owner Grant Act 2000 to increase the amount of the first home owner grant from $7000 to $10 000 for new residential premises where the contract is made on or after 1 July 2013.

Subclause (1) amends section 18(1) of the First Home Owner Grant Act 2000 to provide that, if the commencement date of an eligible transaction is before 1 July 2013, the amount of the first home owner grant is the lesser of the consideration for the eligible transaction and $7000.

Subclause (2) inserts a new section 18(1A) after section 18(1) of the First Home Owner Grant Act 2000 to provide that, if the commencement date of an eligible transaction is on or after 1 July 2013, the amount of a first home owner grant is the lesser of the consideration for the eligible transaction and $10 000.

Subclause (3) inserts a new section 18(4C) after section 18(4B) of the First Home Owner Grant Act 2000. This is an anti-avoidance provision which may apply if the Commissioner of State Revenue is satisfied that the contract that formed the basis of the eligible transaction replaces a contract for the purchase of the same home or a comprehensive home building contract to build the

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same or substantially similar home made before 1 July 2013. Where the Commissioner of State Revenue determines there is a replacement contract, the amount of the first home owner grant will be reduced from $10 000 to $7000.Subclause (4) repeals the definition of new residential premises in section 18(8) of the First Home Owner Grant Act 2000. This section is no longer required as the definition of new residential premises has been relocated to section 3(1).

Clause 42 inserts two new subparagraphs into section 50(4)(ca) of the First Home Owner Grant Act 2000. Section 50 provides that protected information, being information about an applicant or their partner that is obtained under or in relation to the administration of the First Home Owner Grant Act 2000, is confidential. Section 50(4) sets out the circumstances in which protected information may be disclosed and section 50(4)(ca) provides for its disclosure to specified officers or agencies.

New subparagraphs (v) and (vi) make the Legal Services Board and the Legal Services Commissioner, being entities responsible for the regulatory oversight of the legal profession under the Legal Profession Act 2004, authorised recipients of protected information. This will allow information relevant to the conduct of a law practice that has been obtained in the administration and the enforcement of the First Home Owner Grant Act 2000 to be disclosed to the Legal Services Board and Legal Services Commissioner. Without this amendment, the Legal Services Board and Legal Services Commissioner are required to rely on powers of compulsion under the Legal Profession Act 2004 to obtain information from the State Revenue Office relevant to inquiries or investigations under the Legal Profession Act 2004.

PART 6—LIQUOR CONTROL REFORM ACT 1998

Part 6 of the Bill amends the Liquor Control Reform Act 1998 to provide for the delegation of certain powers by the Treasurer to the Commissioner of State Revenue.

Clause 43 inserts a new section 178A into the Liquor Control Reform Act 1998. New section 178A(1) enables the Treasurer to delegate, by instrument, to the Commissioner of State Revenue,

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the power to make liquor subsidy payments to liquor licensees under section 177(1) of that Act and to require information or documents to be provided for this purpose under section 178(1).

New section 178A(2) enables the Commissioner of State Revenue to sub-delegate these powers to staff of the State Revenue Office.

New section 178A(3) expressly provides that section 42 of the Interpretation of Legislation Act 1984, which deals with the exercise of delegated powers, and section 42A of the Interpretation of Legislation Act 1984, which deals with the construction of the power to delegate, apply in relation to a sub-delegation in the same manner as they apply in relation to a delegation.

New section 178A(4) defines a member of staff of the State Revenue Office to mean—

an employee referred to in section 67 of the Taxation Administration Act 1997; or

a consultant or contractor engaged under section 68 of that Act.

PART 7—PAYROLL TAX ACT 2007

Part 7 of the Bill amends the contractor provisions contained in Division 7 of Part 3 of the Payroll Tax Act 2007 to clarify their operation.

Clause 44 Division 7 of Part 3 of the Payroll Tax Act 2007 contains provisions which deem contractors to be employees and payments made to them to be wages where a contractor provides services under a relevant contract. These provisions are aimed at ensuring that employers cannot avoid payroll tax by engaging contractors instead of employees. Clause 44 amends section 32(2), which sets out what is not included as a relevant contract for the purposes of the contractor provisions.

Subclause (1) amends section 32(2)(c) to remove the anti-avoidance provision that applies specifically to section 32(2)(c), because this anti-avoidance provision is replicated in the new section 32(2D), which will apply to each of the contractor exemptions provided in section 32(2)(a) to (d).

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Subclause (2) amends section 32(d) of the Payroll Tax Act 2007. Subclause 2(a) amends section 32(2)(d)(i), which deals with owner-drivers, to insert "solely for or" after "services".

In The Smith's Snackfood Company Limited v Chief Commissioner of State Revenue (NSW) [2012] NSWSC 998, the Supreme Court of NSW observed that the language of the equivalent provision in the Payroll Tax Act 2007 (NSW) was such that it did not provide an exemption for contracts for the conveyance of goods by owner drivers, but only for those services ancillary to the conveyance of goods. To ensure that this exemption covers both, and is limited solely to those purposes, this amendment expressly provides that a relevant contract does not include a contract under which the principal is supplied with services solely for the conveyance of goods, or services that are ancillary to that conveyance, using a vehicle provided by the person conveying the goods.

Subclause (2) amends section 32(2)(d) to remove the anti-avoidance provision that applies specifically to section 32(2)(d) because this anti-avoidance provision is replicated in the new section 32(2D), which will apply to each of the contractor exemptions provided in section 32(2)(a) to (d).

Subclause (3) inserts new sections 32(2A), 32(2B), 32(2C) and 32(2D) after section 32(2) of the Payroll Tax Act 2007.

New section 32(2A) provides that subsection (2)(a), (2)(b)(i), (2)(b)(iv) or (2)(d) does not apply to a contract under which services not referred to in any of those subsections are supplied in addition to services referred to in the relevant subsection.

New section 32(2B) provides that subsection (2)(b)(ii) or (iii) does not apply to—

a contract under which services not referred to in that subsection are supplied in addition to services referred to in that subsection; or

a contract under which services referred to in that subsection are provided for a period exceeding a period referred to in that subsection.

New section 32(2C) provides that subsection (2)(c) does not apply to a contract under which work is performed in a manner

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other than a manner referred to in that subsection, in addition to work performed in a manner referred to in that subsection.

These amendments confirm that the contractor exemption cannot be apportioned between exempt and taxable services. They are intended to operate on the basis that the contract is either fully exempt because it falls within the relevant exemption or is taxable because it does not fall within the relevant exemption during a financial year.

New section 32(2D) provides that subsection (2) does not apply if the Commissioner of State Revenue determines that the contract under which the services are supplied was entered into with an intention either directly or indirectly of avoiding or evading the payment of tax by any person. This section is a general anti-avoidance provision to ensure that contractual arrangements are not put into place to avoid the intended operation of the exemption. This provision applies across each of the contractor exemptions provided in section 32(2)(a) to (d). Previously it only applied to section 32(2)(c) and (d).

Clause 45 amends Schedule 3 to the Payroll Tax Act 2007 by inserting a new clause 18. The new clause 18 of Schedule 3 sets out transitional measures for the amendments to section 32 as follows—

section 32, as amended by section 44 of the State Tax Laws Amendment (Budget and Other Measures) Act 2013 applies in respect of work performed on or after 1 July 2013 irrespective of when amounts are paid or become payable in respect of the work;

section 32 as in force immediately before the commencement of section 44 of the State Tax Laws Amendment (Budget and Other Measures) Act 2013 continues to apply in respect of work performed before 1 July 2013 irrespective of when amounts are paid or become payable in respect of the work.

PART 8—TAXATION ADMINISTRATION ACT 1997

Part 8 of the Bill amends the Taxation Administration Act 1997 to provide clearly that the Commissioner of State Revenue has the power to delegate any functions of the Commissioner, including functions conferred in or under

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Acts not within the Commissioner's general administration; enable a Deputy or Assistant Commissioner to exercise all of the Commissioner's powers or functions; and permit the disclosure of certain information obtained in the administration of the taxation laws.

Clause 46 substitutes section 66 of the Taxation Administration Act 1997. New section 66 provides for the employment of Deputy or Assistant Commissioners and for them to be provided with all of the Commissioner's powers, duties and functions.

Clause 47 substitutes section 67 of the Taxation Administration Act 1997. New section 67 provides for the appointment of staff necessary for the performance of the Commissioner's functions. This will ensure staff can be appointed under Part 3 of the Public Administration Act 2004 as necessary for the performance of functions and powers conferred on the Commissioner in Acts that are not under the Commissioner's general administration. The amendment provides that staff can be employed to carry out any of the Commissioner's functions, regardless of whether these are conferred in a law that the Commissioner administers or in another law.

Clause 48 substitutes section 69 of the Taxation Administration Act 1997 to explicitly provide that the Commissioner of State Revenue may delegate any of his or her duties, powers and functions, including those which are referred to in section 63(2) of the Taxation Administration Act 1997, to staff of the State Revenue Office, whether they are employed under the Public Administration Act 2004 or engaged under section 68 of the Taxation Administration Act 1997. The effect of new sections 67 and 69 is that the Commissioner of State Revenue can delegate any of his or her functions to any of the staff employed or engaged in the State Revenue Office.

Clause 49 inserts a new heading in section 92 to reflect that it provides for permitted disclosures to particular persons or for particular purposes.

Clause 50 inserts a new section 92A after section 92 of the Taxation Administration Act 1997 to enable the State Revenue Office to provide details of the duty paid on land transactions that are subject to Chapter 2 of the Duties Act 2000. The purpose of this amendment is to enable the State Revenue Office to provide an inquirer with details of the duty paid or payable on that

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transaction. The demand for this service has arisen since the commencement of Duties Online, which allows duty to be paid and the transfer of land instrument registered with Land Victoria without a stamp from the SRO confirming the duty treatment of the transaction. While the stamp is not required for registration of the title, the Duties Online facility has not removed the demand for physical evidence of duty payment by taxpayers, legal representatives, conveyancers and financial institutions.

The proposed service will not be a public register; the information will only be accessible to a person who is able to enter some key details that identify the dutiable transaction. Where an instrument has been stamped, most of this information is contained on the stamp, publicly available at Land Victoria.

New section 92A(1) allows a tax officer to disclose information needed to enable an inquirer to establish whether duty has been paid or is payable on a dutiable transaction, the amount of duty paid or payable and the basis on which duty was assessed.

New section 92A(2) provides an non-exhaustive list of the information that such a service may disclose. It includes a transaction reference number, the name of the lodging party, the date on which duty was paid, and whether there has been a reassessment of liability in relation to that transaction.

The disclosed information is not subject to the prohibition on secondary disclosure in section 94 of the Taxation Administration Act 1997. The inquirer is able to pass on this information to other persons.

Clause 51 amends section 92(1)(e)(vi) of the Taxation Administration Act 1997 to provide for the Legal Services Board and the Legal Services Commissioner, which are responsible for the regulatory oversight of the legal profession under the Legal Profession Act 2004, to become "authorised recipients" under the Taxation Administration Act 1997.

Section 91 of the Taxation Administration Act 1997 provides that information obtained under or in relation to the administration of Taxation Administration Act 1997 must not be disclosed except as permitted by Part 9 of that Act.

Section 92(1) provides for permitted disclosures to particular persons, and section 92(1)(e) provides for disclosure to

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"authorised recipients", that is, certain officers or agencies, such as the Australian Taxation Office, the Victorian WorkCover Authority, a member of the police force and the Roads Corporation. Providing for the Legal Services Board and the Legal Services Commissioner to be authorised recipients will enable the State Revenue Office to disclose to these bodies information relating to the conduct of a law practice.

PART 9—WATER ACT 1989

Part 9 of the Bill amends the Water Act 1989 to ensure that the functions, powers and duties of the Commissioner of State Revenue in the administration of the water and sewerage rebate scheme are sufficiently identified so that the Commissioner can delegate them and appoint staff to undertake them under the Taxation Administration Act 1997.

Clause 52 inserts a new section 283(3BA) of the Water Act 1989 which provides the framework by which water authorities are to determine applications for the waiver of service charges for water and sewerage.

Section 283(3B) provides for an Order to be made specifying the circumstances when a waiver is permitted. Under the current Order, the Commissioner of State Revenue is responsible for determining eligibility.

New section 283(3BA) provides a clear statutory basis for the determinations made by the Commissioner of State Revenue and for the Commissioner to take the steps necessary to be satisfied of matters arising in his or her administration of the Order.

Clause 53 amends section 284 of the Water Act 1989, which provides for the Minister for Water to ensure that reimbursement payments are made to the water Authorities and for an Authority to provide any information required to the Minister for Water or the Minister administering Part 7 of the Financial Management Act 1994. In practice, the administration of the payments rests with the Commissioner of State Revenue.

New section 284(1A) provides explicit statutory authority for the Commissioner of State Revenue to make the reimbursement payments. Amended section 284(2) inserts a reference to the Commissioner of State Revenue, to clarify that an Authority must

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provide to the Commissioner any information required by the Commissioner for the reimbursement payments to be made.

PART 10—REPEAL OF AMENDING ACT

Clause 54 provides for the automatic repeal of this Act on 1 January 2015. The repeal of this Act does not affect in any way the operation of the amendments and repeals made by the Act (see section 15(1) of the Interpretation of Legislation Act 1984).

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