Wool Tax (Nos 1-5) Regulations (Amendment) 1995 No. 198
EXPLANATORY STATEMENT
STATUTORY RULES 1995 No. 198
ISSUED BY THE AUTHORITY OF THE ASSISTANT TREASURER
Wool Tax Acts (Nos 1-5) 1964
Wool Tax (Nos 1-5) Regulations (Amendment)
These regulations set the rate of wool tax for the financial year 1 July 1995 to 30 June 1996. The rate for shorn wool other than carpet wool will be 8.5% and the rate for carpet wool will be 4%.
The regulations are made under the Wool Tax Acts (Nos. 1-5) 1964 (die Acts), which impose wool tax on the sale value of shorn wool produced in Australia. Each Act 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.
Section 6 of each Act gives the Governor-General the power to make regulations. In particular, the Governor-General may make regulations which, within certain limitations, prescribe the race 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% or the sale value of the wool. Neither rate can be less than 2.75%. Moreover, regulations can only prescribe rates of tax for a single financial year. Thus it is necessary to make regulations to prescribe wool tax rates every year, even if the rates are not being changed from the previous year.
In addition, before making regulations prescribing a rate of wool tax, the Governor-General is required, under subsection 6(5) of each Act, to consider certain matters. In the case of shorn wool other than carpet wool, these matters are:
• the percentage fixed by subsection 43(2) of the Wool International Act 1993 (which is 4.5%); 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 case of carpet wool, the relevant matters are the current recommendations applying to the financial year for the purposes of sections 49 and 50 of the AWRAP Act.
The Wool International Act and the AWRAP Act allow for wool grower ballots to be hold to make the current recommendations. However, for the financial year commencing 1 July 1995, no ballot has been held. It was not thought to be necessary since neither the industry nor the Government wished to change the rates from the previous year.
Where a grower ballot has not been held, subsections 51(8) and (9) 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 1995 are the recommendations which applied to the financial year commencing on 1 July 1993, and which also applied in the financial year commencing on 1 July 1994. (Rates of wool tax have not changed since the financial year commencing on 1 July 1991) Subsection 51(10) of that Act allows the recommendations of an earlier year to be used as current recommendations, even if, as in this case, they were made under legislation which has been repealed or amended.
With respect to shorn wool other than carpet wool, the rate recommended by the current recommendations is therefore 8.5%, and with respect to carpet wool, the recommended rate is 4%.
Details of the proposed amendments to the Regulations are as follows:
Regulation 1 - provides for the amendment of the Regulations.
Regulation 2 - provides that these regulations will commence on 1 July 1995.
Regulation 3 - amends subregulations 3(1) and 3(2) of Wool Tax (Nos. 1-5) Regulations, the subregulations which actually prescribe the rates of wool tax. Subregulation 3(1) sets the rate of tax for shorn wool other than carpet wool at 8.5% and subregulation 3(2) sets the rate for carpet wool at 4%. This regulation provides that subregulations 3(1) and 3(2) will apply for the financial year commencing on 1 July 1995.
There are five separate Regulations, because there are separate regulations for each of the Wool Tax Acts (Nos. 1-5).