Snowy Monaro Regional Council v Chief Commissioner of State Revenue

Judgment (4 paragraphs)

[1]

Solicitors: Marsden Law Group (Applicant) Crown Solicitors Office (Respondent) File Number(s): 1610391

[2]

REASONS FOR DECISION

The issue to be resolved in this case is whether the Yallambee Lodge Aged Care Facility conducted by the Applicant local Council ("the Council") in Cooma NSW is a "hostel" within the meaning of s60 of the Payroll Tax Act 2007 [PRTA 2007].
The matter comes before the tribunal in the following way: 1. By email dated 11/12/13 the Chief Commissioner advised the Council that it was not liable to payroll tax on wages paid to staff at the Yallambee Lodge Aged Care Facility (page 30 s58 documents). 2. By email dated 16/10/15 the Chief Commissioner advised the Council that on a reconsideration he had decided that the Council was liable to payroll tax on the abovementioned wages but that the Chief Commissioner would only require payroll tax to be applied from 1 July 2015 (page 44 s58 documents).Accordingly the Tribunal is considering the position from that date. 3. On 11/12/15 the Council lodged an objection against the Chief Commissioner's decision (page 45ff. s58 documents) 4. On 2/5/16 the Chief Commissioner disallowed the Council's objection (page 55 s58 documents). 5. On 27/6/16 the Council lodged an application with this Tribunal.
Section 86 of the Taxation Administration Act 1996 (TAA) permits a taxpayer dissatisfied with an assessment or a decision of the Chief Commissioner to object; s. 96 TAA permits a dissatisfied taxpayer to lodge an application for a review with this tribunal.

CONSIDERATION

The Macquarie Dictionary defines a hostel as follows: "noun. 1. A supervised place of accommodation, usually supplying board and lodging, provided at a comparatively low cost, as one for students, nurses etc. 2. Youth hostel. (A simple lodging place for young travellers)."
The Oxford English Dictionary second and third edition relevantly defines "hostel" as follows: "1. A place of sojourn; a house where one lodges; a lodging. 2. A public house of lodging and entertainment for strangers and travellers; an inn, a hotel. 3. A house of residence for students at a university or elsewhere..."
Both dictionary definitions use the word "lodging" which implies temporaneity. So too does the word "sojourn".
The meaning of "hostel" in the context of Commonwealth aged care legislation prior to 1997 was discussed by Ryan J in the Federal Court in the case of Australian Nursing Federation v Alcheringa Hostel Incorporated [2004] FCA 375]. The case involved industrial law issues concerned with the relevant award covering aged care nursing staff.
His Honour said as follows: "5 Before 1997, a distinction was drawn between two types of residential aged care facilities; "nursing homes" and "hostels". Nursing homes were regulated by the National Health Act 1954 (Cth) and traditionally cared for aged persons who required a high level of nursing care. Hostels were regulated by the Aged or Disabled Persons Homes Act 1854 (Cth) and traditionally catered for person for whom a generally lower level of nursing care was appropriate. Hostels, therefore, were unable to care for residents who, from the outset, required a high level of nursing, or who came, with advancing years, to need a higher level of care than had been appropriate when first they went into residence. 6 In 1997, provisions for the regulation and funding of nursing homes and hostels were consolidated in one Act, the AC Act. The AC Act removed the distinction between hostels and nursing homes, providing instead for minimum standards to be observed by residential aged care facilities generally. As a result of this change, it is now possible for a residential aged care facility to provide care to residents who variously require either a high or low level of care. This has further been facilitated by the Commonwealth Government's policy, adopted in October 1997, of 'ageing in place'. This policy enables a person to remain in a facility, to which he or she was initially admitted as a low care resident, after the person has come to need a higher level of care. Before 1997, such a resident would have been forced to move from a hostel to a nursing home." Although this decision concerned different legislation at a different time it perhaps indicates the distinction that used to be drawn by legislation, and probably in the public mind, between a hostel and a nursing home facility providing high care to elderly persons and may help to inform the use of the word hostel in PRTA 1997.
It appears to me that the essential features of a hostel in its ordinary meaning involve:

A notion of transience - in that the hostel is used for a limited time or limited purpose - or both (for example a student hostel, provides a place of temporary residence for the purpose and during the period of education and training. A youth hostel provides a place of temporary residence for mostly young travellers. Aboriginal Hostels Ltd in its annual report states that it provides "short-term accommodation" for indigenous persons who have moved from home for work or study (Exh MD-1 p.261). Commonwealth Hostels Ltd documentation states that it provided accommodation for 3 to 12 months for new migrants Exh MD-1 p.274).I note that the Chief Commissioner accepts that a hostel has an aspect of impermanence (Respondent's Submissions par.18).
There is no right or expectation of permanent residence - generally hostel dwellers need to leave when the reason for their presence is over (for example when their education or training is complete).
A low level of care and service from the hostel operator (guests will usually be expected to look after themselves to a considerable extent - for example doing their own laundry, providing their own linen, often buying their own food and cooking for themselves, and attending to their own personal and medical needs).
Often there will be various shared facilities such as kitchens and bathrooms and laundries - though having a private room with an ensuite bathroom would not disqualify the accommodation from being a hostel.
A hostel often provides only simple amenities though it need not offer spartan conditions to qualify as such.
Usually it is low cost by comparison with other forms of temporary accommodation such as hotels because of the low level of service and amenity.
Frequently there are special qualifications to entry into the hostel (for example: to be a student, a nurse in training, an indigenous job seeker, a recent migrant etc). However hostels are generally open to the public or a section of it provided that applicants meet entry qualifications.

In the present case I find that the element of transience is not present. 38 out of 40 beds are occupied by permanent residents. 2 beds are used for respite care but this is not material. The Residential Handbook states under the heading "Security of Tenure" that the residents are to treat Yallambee Lodge as their home for as long as they stay. Their stays are long term. 61 months is the average, and 41 months if they pass away (Molloy Aff.1, par.13) Residents are encouraged to furnish and decorate their room to their own taste. There is limited ability to leave Yallambee Lodge without losing one's place at the aged care facility. Leave is restricted to 53 days per annum in blocks of 7 days, except for medical reasons.
I also find that the level of care provided by staff is high. Staff attend to resident's personal bathing, dressing, feeding and medical needs. The staff working at the aged care facility are in the main especially qualified for the task as Nurses or carers. This too sets it apart from what is usually provided in a hostel.
Although there are shared facilities for dining and recreation at Yallambee Lodge residents enjoy self-contained single accommodation with ensuite bathrooms. This is to be expected in an aged care facility conducted to permit residents to "age in place".
The process of qualifying or being assessed for acceptance as a resident at Yallambee Lodge is somewhat complicated and involved an in-depth external assessment of an aged person's needs, health and means by a team charged with this duty by the Commonwealth government.
The cost of residing at Yallambee lodge is subject to a means test, but can involve payment of a refundable deposit of up to $350,000; plus a daily fee or fees (Molloy Aff.1 pars. 17 and 18). This could not be regarded as 'low cost'.
The Chief Commissioner's representative has taken the Tribunal to the Second Reading Speech by Mr Askin (then Premier and Treasurer of NSW) when the predecessor to the present Act (i.e. the Pay-roll Tax Act 1971) was introduced to the parliament of NSW in 1971.
Prior to 1971, payroll tax was levied by the Commonwealth government. By agreement with the States the Commonwealth government ceded this source of revenue to the States commencing in 1971.
The relevant provisions of the 1971 Act were in all material respects very similar to the current provisions in the PRTA 2007 (set out above).
In his Second Reading Speech Mr Askin (at page 752-753 Hansard 26 August 1971) said: "Provision has been made, of course, for the exemption of the non-business activities of Local government authorities in accordance with the terms of the Commonwealth's offer... It has been considered appropriate that, as long as the private sector continues to bear this charge, the public sector should do so also... In order to exempt the non-business activities of local government authorities as required in terms of the Commonwealth's offer, the bill provides for the State to exempt wages and salaries paid by authorities established under the Local Government Act other than for business activities as nominated by the Commonwealth. These activities are the supply of electricity or gas, water supply, sewerage, the conduct of abattoirs, public food markets, parking stations, cemeteries, crematoriums, hostels, and other activities that are trading undertakings within the meaning of Part XVII of the Local Government Act. This is a stipulation made by the Commonwealth. (Emphasis added)".

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Judgment (4 paragraphs)

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