-----------------MdU Library Gopher Header Information------------ Title : Review of Western Australian State Taxes - : Federal Instutions Duty and Debit Tax Author : Tax Policy Elective 1993 Organisation : School of Law, Murdoch University Language : English Keywords : TAXATION, WESTERN AUSTRALIA, EQUITY, : EFFICIENCY, SIMPLICITY, REFORM Abstract : See abstract for Preface and Introduction Contact Name : The Editors, E Law Contact Address: Murdoch University Law School, PO Box 1014, : Canning Vale, Western Australia, 6155 Contact Phone : +61 09 360 2976 Contact Email : elaw-editors@csuvax1.murdoch.edu.au Last Verified : Last Updated : Creation Date : File Size : 61,498K File Type : Document File Format : ASCII Publication Status: Final COPYRIGHT POLICY: Material appearing in E Law is accepted on the basis that the material is the original, uncopied work of the author or authors. 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ISSN : 1321-8247 URL: gopher://infolib.murdoch.edu.au:70/00/.ftp/pub/subj/law/jnl/ elaw/comment/watax/chap3.txt --------------------------------------------------------------- 1 INTRODUCTION The Financial Institutions Duty ("FID") and Debits Tax are taxes imposed upon certain financial transactions. The two taxes operate independently with FID applying to deposits and Debits Tax applying to withdrawals from certain financial institutions. This chapter will first examine the operation and tax policy implications of FID then the operation and tax policy implications of Debits Tax and finally make recommendations as to how the two taxes could possibly be improved. 2 FINANCIAL INSTITUTIONS DUTY (FID) 2.1 Outline of FID The preamble to the Financial Institutions Duty Act 1983 (WA) describes the W.A. FID as being : ...a duty upon certain receipts, deposits, liabilities and investments of financial institutions and other persons... Essentially the duty is imposed in three different types of situations. First a duty of 0.06% is imposed on the receipts of registered financial institutions (RFI's) (s10); second, a concessional rate of either 0.004% or 0.005% applies to the short term money market dealings of short term dealers (STD's) (s11); third, a duty of 0.06% is imposed on depositors transacting with unregistered financial institutions (s12). The third situation, imposing liability upon depositors of unregistered financial institutions is supposed to catch deposits made to financial institutions which should be registered but for some other reason (such as legislation specifically excluding them) are not so registered. Section twelve is an anti-avoidance provision and has not been resorted to thus far. Therefore we need only consider receipts by RFI's and STD's. 3 DEPOSITS TO REGISTERED FINANCIAL INSTITUTIONS The term `Financial Institutions' covers a range of institutions including banks, building societies, credit unions, finance companies, cash management trusts and similar bodies. However an FI is only liable to the duty if it is registered, that is, either where its' receipts for the preceding year and exceed $5 million or if during a preceding month its' receipts exceed $416 666 (s22). A registered FI is liable to a duty of 0.06% (to a maximum of $1200) on each receipt of money in WA during a month, except for those receipts exempted. Receipts are exempted if paid into an exempt account (s10 (4)(a)) or if they are of a type specifically exempted in the Act or the regulations. The rationale behind the various exemptions varies, however there seems to be three underlying principles upon which exemptions are granted. First, some accounts and receipts are exempted to prevent "double dipping", for example where a non-bank FI deposits its receipts to an account held by a bank.(1) Second, other exemptions apply to transactions which are not strictly receipts; for example money for money transactions such as foreign exchange transactions which are not deposited into a person's account (s10(4)(f)). Third, certain exemptions apply as a matter of policy. These include: -local government and government department accounts;(2) -trust fund and charitable institutions accounts;(3) -receipts by superannuation schemes;(4) -insurance companies and medical benefits funds;(5) -various welfare benefits and Defence Service Homes loan repayments;(6) -mortgage repayments.(7) The tax policy elective suggests that many if not all of the exemptions based on political policy should be removed thus increasing the broadness of the tax-base and simplifying the administration of the duty. 4 SHORT TERM DEALINGS The concessional rate which applies to short term dealings of STD's is a recognition of the special nature of the short term money markets in that they are characterised by a rapid turnover of funds.(8) The lower rate seems to be aimed at the types of transactions which would typically be carried out by financial institutions in accommodating the proceeds of their day-to-day operations. The concessional rate applies only to transactions of over $50,000 and for a period of less than 185 days duration.(9) A distinction is made between "certified" short term dealers and "prescribed" short term dealers. Certified dealers are those who are typically involved at the wholesale end of the financial market, for example merchant or trading banks and official dealers. These dealers usually have Australia-wide operations and are charged duty at a rate of 0.005% on an average monthly basis on one-tenth of their Australia-wide short term liabilities (s11(1)).(10) Prescribed short term dealers are usually financial institutions who invest in the short term money markets as a subsidiary part of their operations. Prescribed STD's are further divided into those which are building societies, credit unions or RFI's with less than half their short term dealings giving rise to short term liabilities (s 26(4)(a)) and non-registered financial institutions (s 26(4) (b)). The rate which applies to prescribed STD's is 0.004% of their average daily short term liabilities or short term investments (s11(4)&(5). 5 COMPARISON OF FID WITH THE CRITIERIA FOR `IDEAL' TAX 5.1. Revenue Generation FID has made only modest contributions to State revenue collections over the years; ranging between approximately 3-7% of annual taxation revenue for the years between 1983 and 1992.(11) However it has created more revenue than the Stamp Duties it replaced due to these of the broader tax base it covers. For example, in its first six months of operation, after taking into account the loss of revenue from the stamp duties abolished, estimates put the net additional revenue received through FID at over $9 million.(12) It must also be noted that for the three full years that FID accounted for only around 3% of total tax revenue (1986/7 through to 1988/9), the standard rate of duty was 0.02%. Since that time the rate has increased to 0.06% and revenue has improved to between 6-7% of total tax revenue. The revenue generating capacity of FID is determined by the rates at which it operates and the broadness of its application. Two factors have been seen as determining rate increases to FID. Firstly, rate increases may make avoidance more worthwhile and secondly, there is a commercial and political disadvantage in being the State with the highest rate of FID. With primary rates in other States ranging from 0.04% (Tasmania) to 0.08% (ACT), there would seem little chance of a significant increase in the WA rate. The lack of a FID in Queensland also makes the issue of avoidance a real possibility if the rate is increased considerably. A further broadening of the tax base would seem to be a more viable (but also limited) means of increasing revenue generating. _The Tax Policy Elective recommends uniformity between the FID regimes in all of the States_ 5.2. Simplicity The administrative ease by which a tax can be collected and its ability to be readily complied with are an essential part of an ideal tax, often referred to as its simplicity. Factors which are indicative of the simplicity of a tax include: -few collection points -uniform tax rates -stability -revenue buoyancy -public acceptability -flexibility. Few collection points: As FID is only imposed on registered FI's and STD's collection of the duty is simplified. The fact that there is a prescribed level of receipts before an FI is required to register significantly reduces the number of collection points. Also, the fact that the duty is submitted monthly further reduces the number of returns of the duty. In this respect FID is simple, however the complexities of determining whether an institution is an FI and further an RFI, whether an STD is prescribed or certified STD and whether a receipt is dutiable or not often results in unintentional avoidance of the duty and complicates compliance and policing of the FID system difficult. Uniform tax rates: Apart from there being three different rates of FID the rates also apply on differing bases - on deposits; one-tenth of average daily short term liabilities for a month; average daily short term investments for a month or average daily short term liabilities for a month. Obviously the variety of rates and bases upon which the duty is applied compromises the simplicity of the duty. Stability: The relative stability of FID revenue is difficult to judge because of the numerous alterations to the rate of duty since its inception.(13) These changes make comparisons with other taxes and inter-period comparisons difficult. However, there is nothing to suggest that FID is any more or less susceptible to changes in economic or other factors. Revenue buoyancy: Revenue buoyancy can be associated with how consistent the tax is as a source of revenue. The rate changes and minor alterations to the tax base through amendments to exemptions have made it difficult for the annual revenue from FID to be accurately estimated. A comparison of yearly estimates with actual collections shows FID to be slightly more predictable than other taxes on average.(14) Public acceptability: FID was subject to a process of consultation with financial institutions during the drafting of the legislation. There was also a review of its operation after the first six months, again with input from the finance sector, which resulted in various amendments to the Act. In this respect the government has sought to make FID more acceptable to the public which encourages compliance and helps with the collection of the duty. The ability of the RFI's to pass on the duty to their clients(15) also makes the duty more acceptable to financial institutions. However the financial institutions still bear the costs of collecting the duty (although it is arguable that this too can be passed on indirectly to customers). Generally FID does not seem to be unpopular enough to affect the simplicity of the duty. Flexibility: The changes of rates of the duty in the past has illustrated the flexibility of FID in according with changes in the economic climate and changes in the rates of duty prevalent in other States. Also the ability to "make regulations prescribing all matters required or permitted by [the] Act" (s 77), increases the flexibility of FID. 5.3. Efficiency The FID tax was introduced in 1984 for two reasons. Firstly, it eliminated several inefficient and inequitable stamp duties on this type of transactions. These included stamp duty on credit businesses, instalment purchases and on the issue of promissory notes.(16) The second reason was to achieve a degree of micro economic reform. The situation prior to 1984 was such as to make trading on the Short Term Money Market (`STMM') in Western Australia expensive. Other States such as New South Wales and Victoria had already introduced FID and eliminated all of the other stamp duties effecting the STMM. As explained above the STMM dealers are liable for a smaller impost under the FID regime. Thus the Western Australian STMM dealers (who still had to pay stamp duties) were liable to much more tax than their Eastern States counter parts and FID was introduced as a measure to stop STMM trade leaving Western Australia.(17) 5.3.1 Banking Habits FID may cause distortions by affecting people's banking habits. A tax on deposits will discourage savings in that people will try to avoid it. However, because FID is taxed at such a low rate (0.06%) and liability is not incurred until some time after the deposit is made, it could be argued that many will ignore the liability that depositing creates. Having a tax on deposits may, however, still cause some people to invest in areas that don't attract FID or to avoid investing altogether. FID may also tend to encourage very large transactions (over two million dollars) due to the $1200 limit on FID for any one transaction. The effect of the limit per transaction is to is that no tax is payable for every dollar over the $2 million threshold.(18) _The Tax Policy Elective recommends the abolition of the limit on the maximum Financial Institutions Duty payable on any transaction._ 5.3.2 Investment Choices Another efficiency consideration arises due to the fact that non-bank financial institutions (such as Hospital Benefit Funds, superannuation funds and insurance businesses) are exempt from FID.(19) This may tend to encourage people to put their money in superannuation funds, to a greater extent than would represent the most efficient use of their money. 5.3.3 Compliance The FID legislation is, as we have seen, complicated. Thus compliance with the rules may be difficult, especially for non-standard transactions.(20) In situations where taxpayers are unsure of their liability under the Act it has been suggested(21) that they will try to avoid coming within the ambit of the legislation as a means of resolving their confusion as to liability. Such distortions in behaviour indicate that the current design of the tax offends the principle of efficiency. 5.4. Equity 5.4.1 Short Term Money Market The greatest equity consideration that arises under the FID regime deals with the STMM provisions. At the moment STMM dealers pay very little tax due to the way in which the tax is imposed. Not only do the dealers have to pay a very small percentage of the amounts that they transfer, but the tax is calculated on the balance of the dealer's STMM account at the end of each day. According to the NSW Tax Task Force Report it is a common practice for STMM dealers to transfer all of their funds to overseas accounts just prior to the end of the day so that the markets in other time zones can be utilised.(22) Thus the liability of STMM dealers is very small indeed. In the NSW Report it was noted that even though billions of dollars are being moved around each year, the tax collected from STMM dealers was only 6.5% of the total FID revenue.(23) The STMM provisions were introduced to recognise the nature of the STMM which is characterised by a rapid turnover of funds. It was hypothesised that to tax the dealers at the same rates as everyone else would offend horizontal equity in that the dealers would have a disproportionate level of tax liability with little scope to pass it on. However, the current legislation breaches horizontal equity in that the dealers pay very little tax. Clearly some sort of medium stance should be reached. We would contend that it is trite to say that the dealers could not pass on a greater tax liability to their clients. It would be far more equitable if STMM dealers were taxed just like every one else. The STMM provisions also breach vertical equity in that people from the wealthier parts of society usually utilise the STMM and would pay less tax than someone who was to invest their money elsewhere. One argument raised by the NSW FID Committee is that the STMM provisions of the FID legislation discriminate against the retail sector and favour the wholesale sector.(24) But as we have seen the low amount of revenue that STMM FID creates would discount this theory to an extent. _The Tax Policy Elective recommends that the provisions for STMM dealers be substantially revised. Perhaps it would be acceptable to raise the rate of tax charged, or even look at implementing a new system of calculating the tax. The Victorian Report suggests that the tax should be calculated on the average credits to a STMM dealers account.(25)_ 5.4.2 Definition of Financial Institution FID only applies to Financial Institutions (as defined) with dealings in excess of $5 million per annum. This may offend vertical equity if an institution with dealings totalling less than the threshold has only a very small number of clients. Thus the members of an institution with receipts greater than $5 million will pay proportionately far more tax on their deposits. 5.4.3 Exemptions The other exemptions to FID also seem to be inequitable. They were introduced to maintain horizontal equity between institutions, but as a matter of equity to their depositors all institutions should pay the same tax. _The Tax Policy Elective recommends that all of the exemptions to FID that are based solely on political reasons should be abolished. These include exemptions for charitable organisations, some Government departments and Social Welfare recipients. Exemptions that prevent double dipping by the State should be maintained_ 5.4.4 Limit on Each Transaction Another inequity is raised by the $1200 upper limit set on any transaction. Vertical equity is offended by this provision in that the people who are able to make deposits of over $2 million will pay the same amount of tax as those depositing $2 million. _As mentioned above the Tax Policy Elective recommends the abolition of the maximum liability for any transaction._ 6 DEBITS TAX Due to the operation of the Bank Account Debits Tax Administration Act 1982 and the Bank Account Debits Tax 1982, tax was imposed, at the Commonwealth level, on debits made to an account in Australia since April 1, 1983. In 1990 this power was transferred to each respective State but with the Commonwealth still responsible for collecting the tax while the transition took place. If a State chose not impose such a tax, the Commonwealth would reduce its' grants to that State by an amount equal to the tax which would have been collected(26) hence, the imposition of this tax was effectively compulsory if a State wished to maintain the total amount of its revenue. TABLE 1 Range of amounts of taxable debits or eligible debits (Amount of tax in brackets) Not less than $1 but less than $100 (15c) Not less than $100 but less than $500 (35c) Not less than $500 but less than $5 000 (75c) Not less than $5 000 but less than $10 000 ($1.50) $10 000 or more ($2.00) Western Australia imposed this tax via the Debits Tax Assessment Act 1990 (`the Act') and the Debits Tax Act 1990 (`the Debits Act') and a full transfer of the tax from the Commonwealth to the State occurred from January 1 1991. Both of the Acts are to be read together.(27) The Debits Act imposes the tax while the Act determines the procedure for the collection of the tax so imposed. The tax is calculated based on the rates in Schedule 1 of the Debits Act (Table 1) for each withdrawal not less than $1 made from a Western Australian account. Account is defined in s3(1) of the Act to include: "accounts, (a) kept with banks, from which cheques can be drawn upon (ie, commonly referred to as cheque account), or (b) kept with non-bank financial institutions (NBFI), from which payment orders can be drawn upon." Thus the Act deals basically with cheque accounts and not with savings accounts. For the rest of this chapter, `accounts' will be used in line with this definition unless otherwise specified. Also, `financial institutions' (FI) will be used to refer to both banks and NBFI. In total, this tax had raised some $39. million or 3% of the total State tax revenue for 1991-92,28 $42.5 million or 2.8% for 1992-93 and is estimated to contribute $45 million or 2.3% for 1993-94.(29) Thus, its contribution to the State, while small is still significant. 7 COMPARISON OF DEBIT TAX WITH THE CRITERIA FOR 'IDEAL' TAXES 7.1. Simplicity The three criteria used for assessing an ideal tax are simplicity, efficiency and equity. Simplicity requires that the tax must be easy to understand, to regulate and to comply with. As mentioned above, the calculation of Debits tax is not a complicated process. It is a simple tax to understand and comply with. Further, it is easy for the State to regulate as the FIs automatically collect it from account holders on behalf of the State. This means the State deals with only a few collection points and this makes the tax relatively cost efficient. However, a question remains: How many individual customers of FIs know what the tax rate is or that the tax is charged on each transaction? The Tax Policy Elective suggests that many do not. As the FIs automatically collect the tax, the public only see the final figure and may not realise the mechanism used in calculating the tax. To this regard, this tax may be considered a `hidden' tax. This question will have to be investigated by further review bodies. 7.2. Efficiency Efficiency requires that taxes cause as little change as possible in the economic decisions of the taxpayer. In this respect Debits tax is not efficient. Since the tax is charged on each transaction and the rate decreases in line with the sliding scale it encourages people to aggregate withdrawals so as to minimise the impost. For example, if a series of transaction over a month resulted in 100 withdrawals of $100 each, with a tax liability of $35, the party making the withdrawals may instead choose to make 1 transaction of $10 000 and incur a liability of just $2. This means that people may try to change their withdrawal habits to minimise the tax they pay. A further inefficiency is that the tax is chargeable only on cheque accounts with banks and payment order accounts with NBFIs. This may create a problem in today's financial markets where there are many `quasi- savings/cheque accounts'. These are savings account with limited chequing facilities. If they are deemed savings accounts, there will be no tax liability. This may encourage a shift of capital to such accounts. _The Tax Policy Elective recommends that the types of transactions that are taxed under the Act be broadened. Thus all accounts would be taxed as cheque accounts currently are._ Furthermore, companies can choose not to debit individual staff pay from the company accounts but may instead withdraw the total payroll amount in one transaction and deposit it into a savings account. From this account, the pay may be electronically transferred into individual staff accounts. Banks may charge little or no fees if the staff account is in the same bank as the savings account.(30) Depending on the size of the work-force, the savings may be considerable. 7.3. Equity 7.3.1 Horizontal Equity The tax is also not equitable. Horizontal equity requires taxpayers with the same level of debits to be taxed the same amount. However, debits from savings and cheque accounts do not bear the same tax. This constitutes a clear advantage for non-trading FIs and in terms of real economic burden, the holders of cheque accounts. Further, there are several exemptions to the tax. Apart from debits from savings accounts, the exemptions include debits made to an account kept with a financial institution in the name of: (i) the Governor- General or the Governor of any State; (ii) a government of any country; (iii) a person or organisation exempted by any Western Australia law; (iv) a public benevolent or a religious institution; (v) a public or non-profit hospital; (vi) a non-profit university, school or college and (vii) any State or the Commonwealth government or its bodies.(31) Non-profit organisations and statutory bodies may be in competition with profit organisations, but not bear the burden of the tax.(32) This is clearly inequitable. If the exemptions are intended as a form of aid, it may be better to give direct aid instead. Such direct funding is subject to greater scrutiny as to the amounts and pattern of expenditure involved. _The Tax Policy Elective recommends that all of the exemptions to Debits tax that are based solely on political reasons should be abolished. These include exemptions for charitable organisations, some Government departments and Social Welfare recipients. Exemptions that prevent double dipping by the State should be maintained._ Also, in today's society, there is a greater utilisation of EFTPOS.(33) Usually the amounts involved are small and this may result in a higher effective percentage tax rate being applicable depending on the pattern of withdrawal. The pattern of withdrawal and the effects of the tax on the public will have to be further investigated by future review bodies. 7.3.2 Vertical Equity The tax also breaches vertical equity. Vertical equity requires those with different capacities to pay,to be taxed differently. Usually, this is taken to mean that one who has a greater capacity is to be taxed more. It is submitted that those who possess a lower economic capacity generally withdraw smaller amounts per withdrawal. This means smaller debits should be taxed less. The amount of tax, as a percentage, decreases considerably as one withdraws a larger amount per transaction. For a $20 withdrawal, the effective tax rate is 0.75%. However, for a $100 withdrawal, the rate is less than half this amount, at 0.35% and at $20,000 the rate is only 0.01%. Generally, those in the lower social-economic groups will be penalised as their withdrawal limit will not be large as those in the higher social-economic groups. As such, they will pay a greater amount of tax than those in the higher social-economic groups. _The Tax Policy Elective recommends that a flat rate of Debits Tax be imposed, somewhere in the vicinity of the FID rate. At a rate of 0.06% the revenue received under Debits tax would increase. For large transactions over $3333 the tax payable will be greater than the previous maximum(34) .This will offset the loss of income a flat rate will cause for lower withdrawals._ _In the alternative, if the previous recommendation is not followed then we would recommend that the Debits tax be calculated on an aggregate basis whereby the sum total of each month's transactions are taxed. Even though this recommendation would lead to a smaller revenue from the tax, revenue neutrality could be maintained by raising the rate of the tax._ 8 CONCLUSION Both FID and Debits tax offer the potential of being a broad based tax. However, the extent of current exemptions under both taxes and the limited applications of Debits tax primarily to cheque accounts only compromise this broad base. Our recommendations suggest a removal of the exemptions and a review of the operation of both to assess the possibility of linking or amalgamating the taxes in the interest of greater efficiency, equity and simplicity. 9 SUMMARY OF RECOMMENDATIONS Our recommendations deal with either broadening the tax base or increasing the rates dutiable. However, the latter might be resisted in this State as one of the primary reasons for introducing FID was to bring WA's taxing regime into line with the other States. We would recommend uniformity between the FID and Debit tax regimes in all of the States. 9.1 Exemptions The second recommendation is to scrap all of the exemptions to both FID and Debits tax that are based solely on political reasons. These include exemptions for charitable organisations, some Government departments and Social Welfare recipients. Although this measure would be very difficult to pass through the Parliament, we believe that due to the relatively small increases the recommendations could be acceptable. Exemptions that prevent double dipping by the State should be maintained. 9.2 Linking taxes As explained above the regressive rate of tax charged under the Debits Tax Act offends many of the criteria for a good tax. Thus we would recommend that a flat rate be imposed, somewhere in the vicinity of the FID rate. To this extent, we would also recommend that the two tax rates be linked together so that if one changes the other would also be altered. If this were followed then the tax received under the Debits Tax regime (at a rate of 0.06%) would increase. For large transactions over $3333 the tax payable will be greater than the previous maximum.(35) This will offset the loss of income a flat rate will cause for lower withdrawals. 9.3 Aggregate Tax If the previous recommendation is not followed then we would recommend that the Debits tax be calculated on an aggregate basis whereby the sum total of each month's transactions are taxed. Even though this recommendation would lead to a smaller revenue from the tax, revenue neutrality could be maintained by raising the rate of the tax. 9.4 Maximum Liability per Transaction As a matter of pure tax policy we would recommend the abolition of the limit on the maximum Financial Institutions Duty payable on any transaction. As previously explained we also recommend the maximum liability for transactions under Debits tax be abolished. 9.5 Short Term Money Market With regard to the FID tax we would also recommend that the provisions for STMM dealers be substantially revised. The fact that certified dealers have to pay only 25 cents for every $50 000 in their trading accounts at the end of each day would suggest that a great deal more revenue could be generated from this area. Perhaps it would be acceptable to raise the rate of tax charged, or even look at implementing a new system of calculating the tax. The Victorian Report suggests that the tax should be calculated on the average credits to a STMM dealers account.(36) This would replace the current system where liability is calculated on the balance at the end of the day which is problematic given the practice of transferring money to overseas accounts each day. This recommendation would also make the provisions more horizontally equitable in that the STMM dealer would pay tax commensurate to duty payable on similar transactions.(37) 9.6 Types of Transactions For the Debits tax to be more effective we would recommend that the types of transactions that are taxed under the Act be broadened. Thus all accounts would be taxed as cheque accounts currently are. 10 FURTHER RESEARCH It is recommended that the taxes be reviewed to ascertain among other things the costs of compliance which financial institutions incur in collecting the taxes and the extent to which the administration costs are passed onto the customer. The possibility of linking the operation of the taxes has been suggested and other ways of streamlining the taxes on financial institutions should be examined. Such moves may need to be considered with reference to the practices in other jurisdictions and greater harmonisation with these other jurisdictions should be sought. Notes: (1) See Wallace & Zipfinger, *Australian Stamp Duties* Law, Vol 1A, Butterworths, Sydney, 1991, at 1198.21. See also Financial Institutions Duty Bill, Second Reading speech, *Western Australia Parliamentary Debates*, Hansard, Vol 251, 1983-4, p 4833. (2) See, s 3 definition of "exempt account". (3) Ib id (4) s 4(10)(d) (5) s 3 (excluded from the definition of "financial institution"). (6) Regulations 5(2) & 5B respectively. (7) Regulation 5(1). (8) See Second Reading speech, 1983-84, op cit. at p 4833. (9) s 3, definition of "short term dealing". (10) Short term liabilities broadly represents the short term deposits and loans to, or borrowings by these dealers. (Second Reading speech, 1983-84, ibid.) (11) According to data taken from State Taxation's Annual Reports 1981 - 82 through to 1991 - 92 (12) Based on figures given by the then Treasurer, Brian Burke, in the Financial Institutions Duty Bill (1983) Second Reading speech, op cit, at p 4832. (13) The rate applying to receipts by RFI's has changed from 0.06% to 0.03% to 0.02% to 0.035% to 0.06% between 1983 and 1993. (14) For the period between 1983/84 to 1991/2, on average the variance between estimates and actual collections of FID for each year was 4.7% compared to a figure of 5.9% for the average of annual variances for all state taxes. (15) See s 77. (16) Second Reading speech, *Western Australia Parliamentary Debates*, p 4831 and 4834 (17) ib id p. 4831 (18) NSW Report p 266 (19) FID Act s. 3 (20) *NSW FID Committee Report 1990* pp 8,10 and 11 (21) ib id (22) NSW Report p 267 (23) NSW Report p 267 (24) NSW FID Committee Report 1990, p 9 (25) Victorian Report, p 267. (26) Mr Taylor, Minister for Finance and Economic Development, Second Reading, Thursday 22 Nov 1990, 287 Hansard New Series 1990, p 7637. (27) s3 of the Debits Tax Act 1990. (28) Western Australian State Taxation Department, *Annual Report* 1991-92, p 21. (29) *Consolidated Fund Estimates* 1993-94, Budget Paper No 2, p 9. (30) National Australia Bank, Westpac and R & I all charge no fees for electronic funds transfers between 2 accounts if both accounts are in the same bank. (31) s3 of the Act under "excluded debit". (32) D O'Bryen, Financial Taxes In Australia, 5 *Australian Tax Forum p 366. (33) Electronic Funds Transfer at Point of Sale. (34) Tax on a flat rate of 0.06% on $3333 is $2. Thus any more will be greater than the previous maximum of $2. (35) Tax on a flat rate of 0.06% on $3333 is $2. Thus any more will be greater than the previous maximum of $2. (36) Victorian Report, p 267. (37) NSW Report p 267.