Question

We are observing that despite the part of the same country, each Australian State and Territory are responding differently to the Covid-19 pandemic. However, the power to open the Australian borders for international students and visitors seems to be in the hands of the Federal Government only. We know that income tax in collected by the Federal Government but stamp duty is payable to the State Government. In the context of your knowledge of the Australian constitution, analyse the basis of each of these statements. Question 2: Penny has recently retired after working as a lawyer for 30 years. However, to keep herself active and also to earn some money for holidays she is planning to sell cup-cakes at the Farmers Market held in her locality every Saturday. Penny inherited a unique recipe for cakes from her grandmother and believes her cakes will hit the market. Penny is looking forward to a relatively quiet lifestyle aims to minimise paperwork or legal complexities. Advise the most appropriate business structure to Penny explaining the reasons.

Answer 1

Federal vs State:

The reponsibilities are clearly different for both the Governments.State government are primarily responsible for the state and that is their jurisdiction.The resources at their disposal are primarily for the welfare of State residents.

On the other hand the Federal or the Central Government is responsible for the whole countryas a unit.It cannot act favouring any specific State or States.It has to look after the country as a single unit as compared to State Governments where the object of focus the State.Income tax is a uniform tax applicable to all residents of the country and is an ideal example of uniform treatment of all residents of the country as a whole.

With COVID pandemic the impact is across the country hence the fight is joint.In this fight the State level strategy could be formulated by the respective States which might include rules regarding opening of commercial establishments,schools,public transports , movement into and out of State etc.This is the reason at times conflict arise when one state is allows interstae movements whereas the other state is not n favoour , but overall all these relate to activities within the country.When it comes to the country as a whole to decide International movement strategy this is solely the domain of federal Government as the unit for them is the whole country.This is absolutely in alignment to the basic structure of Governance basis division of a country into States and sharing of responsibilities.Similar to defence which is again the domain of Federal Government any International activity will always be the prerogative of Federal Government and not State government.

Ans-2

In case of Penny the best way to structure the business will be on the lines of a Sole Trader.This is the simplest form of a business structure.No tax registratio or statutory requirements are there except to keep records for a 5 year period.The set up cost are very low.Penny shall have full control in terms of management and profits.The only flip side would be unlimited liability for any losses meanning her personal assets shall also be liable.