Wool Tax (Nos. 1-5) Regulations (Amendment) 1996 No. 139
EXPLANATORY STATEMENT
STATUTORY RULES 1996 No. 139
ISSUED BY THE AUTHORITY OF THE ASSISTANT TREASURER
Wool Tax Acts (Nos. 1-5) 1964
Wool Tax (Nos. 1-5) Regulations (Amendment)
The Regulations set the rate of wool tax for the financial year 1 July 1996 to 30 June 1997. The rate for shorn wool other than carpet wool will be reduced to 4 per cent and the rate for carpet wool will remain at 4 per cent.
The Regulations are made under the Wool Tax Acts (Nos. 1-5) 1964 (the Acts), which impose a tax on the sale value of shorn wool produced in Australia. Each of the Acts imposes the tax on a particular dealing with wool. Broadly speaking, the dealings are sale by a wool broker, purchase by a wool dealer, purchase by a manufacturer, subjecting the wool to a process of manufacture, and export The need for five separate Acts arises from the Constitutional requirement that laws imposing taxes should deal with one subject of taxation only.
The Governor-General has the power to make regulations under section 6 of each Act prescribing matters required, permitted or convenient to be prescribed, for carrying out or giving effect to the relevant Act. In particular, the Governor-General may make regulations, within certain limitations, to prescribe the rate of tax. The maximum rate which can be prescribed 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%. Moreover, regulations can only prescribe a rate of tax for a single financial year. Thus it is necessary to make regulations to prescribe wool tax rates every year. In this case, the rate of tax for whom wool other than carpet wool has been reduced from the previous year (the rate of tax for carpet wool remains the same).
In addition, before making regulations to prescribe a rate of wool tax, the GovernorGeneral it required, under subsection 6(5) of each Act to consider certain matters. In the case of shorn wool other that carpet wool, there an two main elements:
* the percentage fixed by subsection 43(2) of the Wool International Act 1993 (by which the amount payable by the Commonwealth to Wool International is calculated. This percentage has been reduced from 4.5% to zero and will affect the rate of tax for shorn wool other than carpet wool accordingly); and
* the current recommendations applying to the financial year for the purposes of sections 49 and 50 of the Australian Wool Research and Promotion Organisation Act 1993 (AWRAP Act).
In the cue of carpet wool, one element only must be considered, namely the current recommendations applying to the financial year for the purposes of sections 49 and 50 of the AWRAP Act.
The usual way to make current recommendations is by grower ballot, but no ballot has been, or will be, held in respect of the year commencing 1 July 1996. Where a grower ballot has not been held, subsections 51(8), 51(9) and 51(10) of the AWRAP Act apply to make the last recommendations made the current recommendations for the financial year in question. This means that the current recommendations for the financial year commencing on 1 July 1996 are the recommendation which applied to the last three financial years.
Accordingly, the rate recommended by the current recommendations for both shorn wool other than carpet wool and carpet wool will be the same as for the past three financial years, ie., 4%. Since the percentage fixed by subsection 43(2) of the Wool International Act 1993 has been reduced form 4.5% to zero, the rate of wool tax applicable to both shorn wool other than carpet wool and carpet wool for the 1996-97 financial year will be 4% of the sale value of the wool.
Details of the amendments to the Regulations are as follows:
Regulation 1 - provides that these Regulations will commence on 1 July 1996.
Regulation 2 - provides for the amendment of the Regulations.
Regulation 3 - amends subregulations 3(1) and 3(2) of the Regulations, the subregulations which actually prescribe the rate of wool tax. Subregulation 3(1) sets the rate of tax for shorn wool other than carpet wool at 4 per cent and subregulation 3(2) sets the rate for carpet wool at 4 per cent. This regulation provides that subregulations 3(1) and 3(2) will apply for the financial year commencing on 1 July 1996.
There are five separate Regulations, because there are separate regulations for each of the Wool Tax Acts (Nos. 1-5).