COMPANIES (TRUSTEES AND PERSONAL REPRESENTATIVES) AMENDMENT BILL 2001 Second Reading Speech

Northern Territory Second Reading Speeches

COMPANIES (TRUSTEES AND PERSONAL REPRESENTATIVES) AMENDMENT BILL 2001

(This an uncorrected proof of the daily report. It is made available under the condition that it is recognised as such.)

Mr Speaker, I move that the bill be now read a second time.

The purpose of this bill is to amend the Companies (Trustees and Personal Representatives) Act to ensure that trustee companies can recover from clients the goods and services tax that is collected in respect of the provision of trustee and estate services.

Honourable members will be aware that the Companies (Trustees and Personal Representatives) Act enables authorised trustee companies to act as executor and trustee of and have power of attorney over personal estates. The act sets out the manner in which commissions and fees are charged to estates in exchange for the services provided by the trustee companies.

Effectively section 27 of the act sets out principles and rules providing for maximum charges and fees. The Trustee Corporations Association of Australia submitted that this section prevents the adjustment of fees to take account of increases in costs attributable to the GST. Accordingly, the Association sought an appropriate amendment along the lines of legislation enacted in the Australian Capital Territory, New South Wales, South Australia and Tasmania.

Commonwealth's A New Tax System (Goods and Services Tax) Act 1999, the GST Act, commenced operation on 1 July 2000. Liability for the payment of GST attaches to many areas of commercial activity which did not formerly attract tax liability. The provisions in the act and regulations which provide for the recovery of fees do not allow the trustee companies to recover GST. The proposed amendments would ensure that any GST which is payable by a trustee company in connection with services supplied by the trustee company in the management or administration of an estate or trust fund can be recovered from the estate or trust fund.

However, trustee companies will be subject to the general laws regarding GST price exploitation. The general principle is that any price increases which are attributed to GST by service providers must be referable to the real cost increases caused by GST. Service providers should not take advantage of the introduction of the GST to disguise additional profiteering. Proposed section 27A(2) removes any doubt about the increases to fees and commission charged by trustee companies which are permitted.

Proposed section 27A(4), provides that the new section will operate in respect of all services provided in respect of which GST has been paid, including services provided before the commencement of this legislation.

I commend the bill to Honourable Members.

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