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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer and Copyright Details
Sales Tax Legislation Amendment Bill
(No. 1) 1998
Date Introduced: 3 December 1998
House: House of Representatives
Portfolio: Treasury
Commencement: Items 1 to 6, 9 and 10 of
Schedule 2 dealing with the rules for exported computer goods,
commence on a day to be fixed by proclamation. Item 7 of Schedule
2, containing corrections to the classification table of computer
goods, will commence retrospectively on 3 December 1998. All other
provisions commence on Royal Assent.
The Bill seeks to exempt from sales tax:
-
- commercial space equipment, and
-
- certain goods imported by overseas participants and delegations
attending the Sydney 2000 Olympics, Paralympics and associated
events.
The Bill also makes minor amendments to the
Sales Tax Assessment Act 1992 in relation to sales tax
evasion in the computer industry and the re-importation of goods
into Australia.
As there is no central theme to this Bill, a
brief background to each major amendment will be outlined
below.
Amendments relating to a sales tax
exemption for space equipment
In 1998 the Federal Government took several
initiatives designed to facilitate the development of a commercial
space industry in Australia. A significant aspect of this policy
was the introduction of the Space Activities Bill 1998(1) aimed at
regulating the licensing, safety and liability of Australian launch
activities and encouraging the commercial launch industry. That
Bill passed both Houses of Parliament and received Royal Assent on
21 December 1998.
A second initiative was the Government's
announcement on 23 June 1998, of the introduction of a sales tax
exemption for space launch vehicles, payloads and other goods
intended for launch into outer space or to be brought back from
outer space. The present Bill implements this policy.
In the media release of 23 June 1998, Treasurer
Peter Costello described the wholesales tax exemption as a green
light for an exciting and profitable industry to establish in
Australia.
The Government decision to grant as from today,
a WST exemption for equipment that is actually launched provided a
significant boost for the commercial space launch industry in
Australia.
The media release went on:
The WST exemption would enable ventures such as
the Kistler Aerospace project at Woomera to confidently take the
first step in preparing infrastructure for launch operations in
Australia.
Despite this initiative, it is of note that the
United States-based Kistler Aerospace Corporation has recently
confirmed the delaying of the Woomera project due to funding
problems. Site construction was to be completed by December 1998
and the first tests carried out in early 1999. However work has not
yet begun and launches are now unlikely to take place before
2000.(2)
Item 2 of Schedule
1 of the Bill adds a new item 196 to Schedule 1 of the
Sales Tax Assessment Act 1992, thereby exempting from
sales tax a range of space objects which are or are intended to be
launched into or brought back from outer space. Space objects
consist of launch vehicles, payloads and goods marked as or used as
parts for payloads and launch vehicles [Item 2 Schedule
1]. It is of note that the term 'launch vehicles' refers
only to objects launched into outer space. In the debate on the
Space Activities Bill 1998, it was suggested that there were
technical deficiencies in that Bill due to a lack of clarification
of the meaning of 'outer space'. It was argued that the term 'outer
space' should be defined to include objects launched into
sub-orbital flights and low Earth orbit, in addition to those
launched into outer space.(3)
Similarly with this Bill, it might be argued
that the sales tax exemption should apply to objects launched into
sub-orbital flights and low Earth orbit, in addition to those
launched into outer space.
Amendments relating to a sales tax
exemption for goods imported by Olympians
Item 2 of Schedule
1 of the Bill adds a new item 197 to Schedule 1 of the
Sales Tax Assessment Act 1992, thereby exempting from
sales tax certain goods imported by overseas participants and
delegations attending the Sydney 2000 Olympics, Paralympics and
associated events.
According to the Bill's Explanatory Memorandum,
the rationale for the proposed amendment is a commitment to the
decision of the Ministerial Committee of the Sydney 2000 Games
notified in the Committee's Minute of 27 August 1997.(4)
The measure mirrors and complements a duty
exemption provided by item 64 in Schedule 4 of the Customs
Tariff Act 1995 which received bipartisan support in its
passage through the Parliament in late 1998.(5)
The Explanatory Memorandum to the Bill states
that the exemption from sales tax will not apply to goods for sale,
alcohol and tobacco products, motor vehicles and television
equipment.(6) However item 64 in Schedule 4 of the Customs
Tariff Act 1995 does not specify a listing of exempt goods,
but rather defines the exemption as applying to:
[g]oods, as prescribed by by-law, imported by,
or on behalf of, non-Australian Olympic and Paralympic Family
members, as defined by by-law, for use in, or for purposes related
to [...the Sydney 2000 Olympic Games, the Sydney 2000 Paralympic
Games and related trial and cultural events].
While the Customs Tariff Amendment Bill No.1
1998 received bipartisan support in its passage through the
Parliament, an Opposition speaker on that Bill, the Hon. Stephen
Martin, did raise the question of what constitutes the Olympic
Family. According to his advice from the Australian Customs
Service, the Olympic Family consists of IOC members, athletes,
officials, host city delegations, accompanying persons and the
media from all participating countries. In all, this is
approximately 65,000 personnel connected to the Sydney Olympics,
the Paralympics, and related trial and cultural events.(7)
-
- This Bill became the Space Activities Act 1998.
- 'US Woomera project stalled on the pad', Australian Financial
Review, 4 January 1999: 7.
- Space Activities Bill 1998, Bills Digest No. 34, 1998-99: 7-8.
- Sales Tax Legislation Amendment Bill (No.1) 1998, Explanatory
Memorandum: 13.
- Item 64 of Schedule 4 was added to the Customs Tariff Act 1995
by the Customs Tariff Amendment Act No.1 1998.
- Sales Tax Legislation Amendment Bill (No.1) 1998, Explanatory
Memorandum: 14.
- Parliamentary Debates (Hansard), House of Representatives, 2
June 1998: 4471.
Mary Anne Neilsen
9 February 1999
Bills Digest Service
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ISSN 1328-8091
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