Today Abigail proposed several amendments to the Jobs Plus Bill, which address the broad ministerial delegation power in relation to the Jobs Plus Program as well as the eligibility for payroll tax exemption.
Abigail said (15:04):
On behalf of The Greens, I speak in debate on the Payroll Tax Amendment (Jobs Plus) Bill 2021, which covers two distinct payroll issues. I flag now that The Greens will support the part of the bill that addresses the second of those issues—namely, the removal of the effective end date of the Aged Care Workforce Retention Grant Opportunity program to allow wages paid from the third bonus payment and any future bonus payments to be granted an exemption from liability to pay payroll tax. The other issue the bill addresses concerns the Jobs Plus program. The bill seeks to amend the Payroll Tax Act 2007 to exempt employers from liability to pay payroll tax on the basis of an approved Jobs Plus agreement between the Minister for Jobs, Investment, Tourism and Western Sydney and the employer, and to allow the Minister to revoke this exemption by written notice to the employer on the grounds specified in the exemption agreement. Considerations for revocation include agreed milestones and the creation of new jobs in the business.
The Jobs Plus program, introduced in 2020, is designed to encourage more businesses to establish or relocate their operations to New South Wales and was created with the objective of stimulating economic activity in response to COVID-19 related economic disruption. Existing incentives in the program include rebates to businesses for agreed infrastructure, subsidised training programs and subsidised government-owned accommodation. The eligibility guidelines for businesses state that, to qualify for the Jobs Plus program, businesses must create at least 30 new full-time equivalent jobs in New South Wales between 30 June 2022 and 30 June 2024. Additionally, the guidelines consider aspects such as deliverability, cost‑benefit analysis, strategic alignment, affordability and all other relevant risks as determined by NSW Treasury.
The Greens have significant concerns about the extent of the Minister's discretion when approving who is and who is not eligible for the payroll tax exemption in relation to the Jobs Plus program. Our preference is for more detail to be included in the bill to limit the discretion of the Minister and to increase transparency and accountability. I note the amendments put forward by the Opposition that were agreed to when the bill passed through the Legislative Assembly. Those Opposition amendments do something to improve the bill. However, in our view, they do not go far enough. The Greens will be proposing amendments to improve the transparency and accountability of government decisions in relation to the Jobs Plus program payroll tax exemptions.
The new section 66F (1) (a) of the Payroll Tax Act 2007 proposed by the bill authorises the Minister to enter into an agreement with an employer for the purposes of that section. However, there is no actual legislative connection between that decision and the Jobs Plus program. In effect, the Minister can enter into an agreement expressed to be a Jobs Plus agreement for the purposes of section 66F (1) without the employer actually having been accepted under the Jobs Plus program. We will propose an amendment that will clearly connect this payroll exemption with the program.
Another area of concern is the broad delegation power that has been given to the Minister. The most recent report of the Legislation Review Committee includes lengthy criticisms of this and other provisions in the bill. The committee noted that the bill grants a "wide power of delegation to the Minister" whereby the Minister can delegate their powers to anyone employed in the Department of Premier and Cabinet or any person employed in Investment NSW. The Minister can delegate to an incredibly wide range of people the power to enter into Jobs Plus agreements with employers to exempt them from this payroll tax, which is the core function of this bill, as well as the power to revoke that exemption. The committee went on to note:
… the Bill does not provide restrictions on this power to delegate, such as restricting delegation to people with certain qualifications or expertise … the Committee considers the Bill should provide more clarity about the persons to whom the functions can be delegated.
The Greens will propose amendments to narrow that delegation power. Finally, it is concerning that a decision to revoke the payroll exemption cannot be challenged. That decision is supposedly to be made on the basis of terms specified in the Jobs Plus agreement, yet the terms of that agreement is a matter between the Minister—or the Minister's delegate—and the relevant employer and, for example, is not reviewable by this House. The effect of such a revocation is that the wages are taken to have never been exempt wages, making the employer liable to pay payroll tax on the wages even where the employer had relied on the initial exemption. That could amount to a large financial impost on the employer at that time. The risk of an unfair decision being made is heightened by the fact that the bill specifically excludes the employer from being able to lodge an objection with the Chief Commissioner under the Taxation Administration Act 1996. The Legislation Review Committee considered this to be worthy of note in its report, stating:
This may make the rights and obligations of employers unduly dependent on the non-reviewable decision of the Minister to revoke payroll tax exemptions.
The Greens are no fans of payroll tax; it is an inefficient tax that penalises the hiring of workers and inhibits the creation of new jobs. So exemptions from payroll tax, such as those that were introduced in response to the COVID‑19 recession, are usually welcomed. However, we must guard against these exemptions being handed out by the Government as some sort of gift. Decisions as to who to exempt from payroll tax, or who to revoke a payroll tax exemption from, must be clearly guided by rules set down by Parliament, with the necessary accountability measures put in place. Accordingly, with the amendments that The Greens will propose to improve transparency and accountability, we will support the bill.
Abigail continued (15:10):
I move The Greens amendments:
No. 1 Jobs Plus agreements
Page 3, Schedule 1[2], proposed section 66F(1), lines 9 and 10. Omit all words on those lines.
Insert instead—
(a)to enter into a Jobs Plus agreement with an employer that is expressed to be for the purposes of this section, and
No. 8 Jobs Plus agreements
Page 4, Schedule 1[2], proposed section 66F(12).
Insert after line 33—
Jobs Plus agreement means an agreement with an employer that meets the eligibility and assessment criteria specified in the Jobs Plus Program Guidelines dated December 2020 published on https://www.nsw.gov.au/projects/jobs-plus-program, and any guidelines that replace those guidelines.
As I noted in my contribution to the second reading debate, there is currently no legislative connection between the payroll exemption and the Jobs Plus program. We have heard the assurance from the Hon. Damien Tudehope that the intention of this legislation is that it is connected to that program. However, I do not view that as a reason not to make these amendments. At the moment the bill says "… to enter into an agreement with an employer that is expressed to be for the purposes of this section". It is effectively any agreement that says it is for the purposes of section 66F (1) (a) of the Payroll Tax Act 2007. We are proposing to replace the provision to say that they have to enter into a Jobs Plus agreement with an employer that is expressed to be for the purposes of the section.
Amendment No. 8 defines the Jobs Plus agreement. It is still up to the Government if it wants to replace those guidelines from time to time. There is still discretion for the Minister not to grant acceptance into the Jobs Plus program, whether or not a person has met the eligibility assessment criteria. The amendment does not take that away. It says that if you have met the base eligibility assessment criteria under the guidelines and you are in a Jobs Plus program, then you can get the payroll exemption. It is important that we do not end up in a situation where employers applying for payroll exemptions that are not in the Jobs Plus program are given an exemption for another reason because the legislation allows it. I accept the assurance, but it is not good enough to be putting legislation through this place that does not accurately reflect the intention of Parliament.
Abigail continued (15:18):
I move The Greens amendment:
No. 2 Review of decisions
Page 3, Schedule 1[2], proposed section 66F.
Insert after line 28—
(4A)An employer may lodge an objection to a decision of the relevant Minister to revoke the exemption with the Chief Commissioner in accordance with the Taxation Administration Act 1996, sections 87–93, with the necessary modifications.
(4B)The right of review under the Taxation Administration Act 1996, Part 10, Division 2, extends to a decision of the relevant Minister to revoke the exemption under subsection (4), with the necessary modifications.
As I mentioned in my contribution to the second reading debate, the discretion of the Minister is very broad to revoke the exemption that has been given under the Act. The Legislation Review Committee noted that this was not an ideal set of circumstances. I think it is worth looking at what the impact of that would be on somebody who had relied on their exemption. I note that the Opposition made some improvements to that issue in the Legislative Assembly when it argued for there to be no revocation on the basis of having not employed 30 new employees but only having managed to get 20 for employers in regional New South Wales.
When you look at the structure of the program as a whole, it is reasonable to say that when an employer is being given an exemption as a way to encourage them to hire more people, things may happen that are out of their control. If an employer did not meet the requirements within six months, a year or a year and a half down the track, the effect of the revocation is that it is as if the payroll exemption never happened. That means that employer who was trying to go out and hire more people is now handed a potentially large payroll tax bill. There may be good reasons for that, and if an employer has entered into an agreement that says that and they have taken on that risk, it might be said that the employer knew that was going to happen and they should have perhaps provisioned for it. But the fact is that those agreements will be made individually between the Minister and the particular employer. The agreements may vary broadly in terms; we do not know. The terms of them will not be reviewed by this House in any way and what can be in those agreements is limited. On that basis, it does make sense for the Chief Commissioner to have the ability to review the decision of revocation in the ordinary way, given how serious an effect it could have. I commend the amendment.
Abigail continued (15:25):
I move The Greens amendment:
No. 3 Delegations
Page 4, Schedule 1[2], proposed section 66F(9).
Insert after line 12—
(aa)the relevant Minister cannot delegate a function under subsection (1)(a) or (4) to any person other than the Chief Executive Officer of Investment NSW.
As I noted in my contribution to the second reading debate, the delegation power in the bill is particularly broad and is basically allowing any employer to sign into an incredibly important agreement relating to the payroll tax exemption. This amendment will mean that the Minister can only delegate to the Chief Executive Officer of Investment NSW and not to the huge list of other people who are specified in the bill.
Abigail continued (15:27):
I move The Greens amendments:
No. 4 Annual reports
Page 4, Schedule 1[2], proposed section 66F 11), line 22.
Insert ", whether created in that financial year or an earlier financial year" after "employers".
No. 5 Annual reports
Page 4, Schedule 1[2], proposed section 66F(11), line 24.
Insert ", whether in relation to that financial year or an earlier financial year" after "section".
The amendments are a result of an amendment moved by the Opposition in the Legislative Assembly. The amendments clarify that once certain details around payroll tax and the number of new jobs created are provided annually, that information is received on a cumulative basis rather than only in the financial year the Jobs Plus agreement was entered into. The Greens is suggesting that there continue to be a rolling total of how much payroll tax employers have been exempt, and some other details, from the date they were first notified under the annual report and continuing for as long as they are part of the program.
Abigail continued:
I move The Greens amendments:
No. 6 Annual reports
Page 4, Schedule 1[2], proposed section 66F(11).
Insert after line 24—
(e)the total number of employers that applied to enter the Jobs Plus Program and met the eligibility and assessment criteria but for which no Jobs Plus agreement was entered into.
No. 7 Annual reports
Page 4, Schedule 1[2], proposed section 66F(11).
Insert before line 25—
(f)the name of each employer issued with a revocation under subsection (4) and the reasons for the revocation.
I had hoped to get support for amendment No. 6 at least, but I understand that is unlikely to happen. That amendment seeks transparency on the number of employers that had applied to the program for which no exemption from payroll tax was given. Amendment No. 7 would require the names of each employer that was issued with a revocation to be made public. Asking for the names of employers is a touch too far. On reflection I would have amended the amendment to read "the number of employers that had been issued with a revocation". In any event amendment No. 7 will not be supported, so I will not bother the House by amending it.
To see the full debate, see Hansard here.