Wool Tax Regulations (Nos 1-5) (Amendment) 1993 No. 173
EXPLANATORY STATEMENT
STATUTORY RULES 1993 No. 173
ISSUED BY THE AUTHORITY OF THE ASSISTANT TREASURER
Wool Tax Act (Nos 1-5) 1964
Wool Tax Regulations (Nos 1-5) (Amendment)
These regulations will set the rate of wool tax for the financial year 1 July 1993 to 30 June 1994. The rate for shorn wool other than carpet wool will be reduced from 12% to 8.5% and the rate for carpet wool will remain at 4%.
Sections 6 of the Wool Tax Acts (Nos. 1-5) 1964 (the Acts) provides that the Governor-General may make regulations for the purposes of these Acts. The Wool Tax Acts impose a tax on the sale value of shorn wool produced in Australia. Each of the Wool Tax Acts imposes the tax on a particular dealing with wool. The dealings to which the Acts relate are sale by a wool broker, purchase by a registered wool dealer, purchase by a manufacturer, subjecting the wool to a process of manufacture and export. The need for five separate Acts arises from a Constitutional requirement that laws imposing taxes should deal with one subject of taxation only.
Under each Act, the Governor-General may, within certain limits, prescribe the rate of tax. The maximum rate for shorn wool other than carpet wool is 15% of the sale value of the wool and the maximum rate for carpet wool is 6% of the sale value of the wool. Neither rate can be less than 2.75%. The tax has three elements, a portion allocated to debt management purposes, a portion for marketing and promotion and a portion for wool research and development. Carpet wool does not bear the portion which relates to debt management.
Before making the regulations, the Governor-General is required to consider certain recommendations in relation to the setting of the rate. In the case of shorn wool other than carpet wool, these are the recommendations made by:
• the Australian Wool Realisation Commission (AWRC); and
• the last or special general meeting of wool tax payers held pursuant to the Australian Wool Corporation Act 1991; and
• the last annual general meeting of the Wool Research and Development Corporation (WRDC).
In the case of carpet wool, they are the recommendations made by:
• the last or special general meeting of wool tax payers held pursuant to the Australian Wool Corporation Act 1991; and
• the last annual general meeting of the WRDC.
The Governor-General is also required to consider any views in relation to the rate of wool tax expressed by the Wool Council of Australia to the Australian Wool Realisation Commission.
The Minister for Primary Industries and Energy has now received recommendations on the rate of wool tax on wool sold on and after 1 July 1993. The AWRC recommendation, which takes into account the views of the Wool Council of Australia, is for a rate of 4.5%. This is for the debt management component of the tax. The Australian Wool Corporation annual general meeting has recommended that the marketing and promotion component of the tax should be 3.5%. The WRDC has recommended that the component of the tax for research and development be .5%. These recommendations result in a total rate of 8.5% for shorn wool other than carpet wool.
With respect to carpet wool, the rates recommended are also 3.5% for marketing and promotion (the Australian Wool Corporation component) and 5% for research and development. This gives a total rate for carpet wool of 4%, unchanged since last year.
The Cabinet agreed with these recommendations.
Details of the proposed amendments to the Regulations are as follows:
Regulation 1 - provides that these regulations will commence on 1 July 1993.
Regulation 2 - provides for the amendment of the Regulations.
Regulation 3 - subregulations 3(1) and 3(3) provide that the Regulations will apply for the financial year commencing on 1 July 1993. Subregulation 3(2) provides that the rate for shorn wool other than carpet wool will be 8.5%.