Minister Moves To Change Law Affected By Sale Of Power Assets

Minister Moves To Change Law Affected By Sale Of Power Assets

Western Australia Minister for Finance Simon O’Brien

High Court Decision Prompts Changes To Duties Law

Victor P Taffa

Finance Minister Simon O’Brien has taken immediate action to address a deficiency in the Duties Act 2008 to protect Western Australia’s long-term revenue base.

The Minister’s move follows a recent High Court decision related to the sale of certain Power Generation Assets undertaken in 1998 which was initially assessed to duty by the Commissioner of State Revenue in 2000.

The High Court considered an appeal by the purchasers of Power Generation Plant and equipment from WMC Resources Ltd.

In a summary of the decision, the High Court said it

“Unanimously held that an agreement divesting WMC Resources Ltd of responsibility for power generation for its mining operations in Western Australia did not transfer any interest in land and so was not subject to stamp duty under the Stamp Act 1921 (WA). The Court of Appeal of the Supreme Court of Western Australia had previously determined that the Stamp Duty payable by the purchasers TEC Desert Pty Ltd and AGL Power Generation (WA) Pty Ltd was in excess of $11 Million.”

“Notwithstanding that the Stamp Act has now been replaced by the Duties Act, the State Government is concerned that the decision could seriously impact the revenue base of Western Australia into the future.” Mr. O’Brien said.

“Unless this change in the interpretation of the law is addressed, tens of millions of dollars of revenue the State Government relies on to fund essential community services will be put at risk.”

“As a result, I will move to amend the legislation to ensure that items considered prior to the decision to constitute fixtures such as buildings, infrastructure and plant and equipment continue to be subject to duty.” Mr. O’Brien said.

The Minister said full details of the proposed measures will be announced when the legislation is introduced into State Parliament.

However, it is intended that the new provisions will be retrospective so that the necessary changes will have effect from today.