States (Personal Income Tax Sharing) Amendment Act 1980
No. 26 of 1980
An Act to amend the States (Personal Income Tax Sharing) Act 1976
[Assented to 8 May 1980]
BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:
Short title, &c.
1. (1) This Act may be cited as the States (Personal Income Tax Sharing) Amendment Act 1980.
(2) The States (Personal Income Tax Sharing) Act 1976 is in this Act referred to as the Principal Act.
Commencement
2. (1) Subject to sub-section (2), this Act shall come into operation on the day on which it receives the Royal Assent.
(2) Section 3 shall be deemed to have come into operation on 1 July 1979.
Interpretation
3. Section 4 of the Principal Act is amended by inserting in the definition of “withholding tax” in sub-section (1) “or 128v” after “128b”.
Minimum entitlement of States
4. Section 8 of the Principal Act is amended—
(a) by inserting in sub-section (2), before the definition of “minimum entitlement”, the following definition:
“‘index number’, in relation to a State in respect of a quarter, means the All Groups Consumer Price Index number published by the Australian Statistician in respect of the capital city of the State in respect of that quarter;”;
(b) by omitting from paragraph (b) of the definition of “minimum entitlement” in sub-section (2) “and” (last occurring);
(c) by inserting after paragraph (b) of the definition of “minimum entitlement” in sub-section (2) the following paragraph:
“(ba) in respect of the year commencing on 1 July 1980—
(i) the total amount to which the State is entitled in respect of the year that commenced on 1 July 1979 under section 7 of this Act and sub-section (1) of this section; or
(ii) an amount that bears to that amount the same proportion as the sum of—
(a) The index number for the State in respect of the March quarter in the year 1981; and
(b) the index numbers for the State in respect of the three quarters that immediately preceded that quarter,
bears to the sum of—
(c) the index number for the State in respect of the March quarter in the year 1980; and
(d) the index numbers for the State in respect of the three quarters that immediately preceded that quarter,
whichever is the greater; and”;
(d) by omitting from paragraph (c) of the definition of “minimum entitlement” in sub-section (2) “1979” and substituting “1980”; and
(e) by inserting after sub-section (2) the following sub-sections:
“(2a) Subject to sub-section (2b), if at any time, whether before or after the commencement of this sub-section, the Australian Statistician has published or publishes an index number for a State in respect of a quarter in substitution for an index number for the State previously published by him in respect of that quarter, the publication of the later index number shall be disregarded for the purposes of this section.
“(2b) If at any time, whether before or after the commencement of this sub-section, the Australian Statistician has changed or changes the reference base for the Consumer Price Index, then, for the purposes of the application of this section after the change took place or takes place, regard shall be had only to index numbers published in terms of the new reference base.”.
Overview
The States (Personal Income Tax Sharing) Amendment Act 1980 was enacted by the Queen, the Senate, and the House of Representatives of the Commonwealth of Australia to address the need for adjustments in the personal income tax sharing arrangement between the Commonwealth and the states. The Act serves to amend the States (Personal Income Tax Sharing) Act 1976, specifically targeting the minimum entitlement provisions for states to reflect changes in economic conditions, particularly inflation. This was done to ensure that the revenue sharing formula remained fair and responsive to the economic realities faced by the states. The policy objective, as implied in the text, is to maintain an equitable distribution of personal income tax revenue between the federal government and the states, adapting to inflationary pressures and ensuring that the states’ financial entitlements are adequately protected.
Scope and Application
The States (Personal Income Tax Sharing) Amendment Act 1980 is an amendment to the States (Personal Income Tax Sharing) Act 1976 and applies to the Commonwealth of Australia and its states, focusing on the distribution of personal income tax revenues. The Act amends the Principal Act by modifying the definition of "withholding tax" and introduces changes to the minimum entitlement of states. It applies to the states and territories within Australia and to the Commonwealth in the context of distributing personal income tax revenues. The Act does not explicitly state exclusions or thresholds, but its application is inherently limited to the specific provisions outlined in the Principal Act. The application of the Act may also be extended or restricted through subordinate instruments, though the text does not provide explicit details on this.
Key Provisions
The key operative sections of the States (Personal Income Tax Sharing) Amendment Act 1980 (section 3) amend the definition of "withholding tax" in the Principal Act to include "or 128v" after "128b". The Act also modifies the definition of "minimum entitlement" by including a new definition for "index number" (section 4(a)) and altering the criteria for determining minimum entitlement for the year commencing on 1 July 1980 (section 4(b) and (c)). It further introduces new provisions regarding the substitution or change of index numbers (sections 4(2a) and 4(2b)).
The Act imposes specific obligations on the parties it governs, primarily concerning the calculation and payment of personal income tax sharing. It requires that withholding tax include "or 128v" in its definition, thereby expanding the scope of the tax types considered for sharing. Additionally, the definition of "minimum entitlement" is updated to account for changes in the Consumer Price Index, ensuring that calculations reflect current economic conditions. The Act also mandates that any changes or substitutions in index numbers be disregarded or adjusted accordingly, ensuring the accuracy and fairness of the minimum entitlement calculations.
In terms of consequences for non-compliance, the Act does not explicitly state offences, penalties, or specific civil or criminal consequences for breach. However, the implications of failing to adhere to the amended provisions could include financial discrepancies in the personal income tax sharing calculations, potentially leading to disputes or legal challenges regarding the accuracy and fairness of tax distributions among the states.
The Act's amendments focus on refining the mechanisms for personal income tax sharing by updating definitions and criteria to reflect current economic conditions. By incorporating changes in the Consumer Price Index and ensuring the accuracy of index numbers, the Act aims to maintain the integrity and fairness of tax distributions among the states. The lack of explicit penalties for non-compliance suggests that the focus is on procedural accuracy rather than punitive measures, although non-compliance could still result in financial discrepancies and legal challenges.