Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Hansard source

in reply—I thank the previous speaker and other members who have taken part in the debate on the International Tax Agreements Amendment Bill (No. 1) 2007. As part of its response to the review of international tax arrangements, the government undertook to implement a package of reforms that will improve the competitiveness of Australian companies with offshore companies and to maintain Australia’s status as an attractive place for business and investment.

This bill, which will give the force of law to renegotiated tax treaties with France and Norway, further demonstrates the government’s commitment to these outcomes by progressively modernising Australia’s tax treaties. This bill will insert the text of the convention between Australia and France and the convention between Australia and Norway into the International Tax Agreements Act 1953. The conventions between Australia and France and Australia and Norway were signed on 20 June 2006 and 18 August 2006 respectively, and they will replace the existing tax treaties with France and Norway and the separate airline profits agreement with France, dealing with taxation of airline profits. Details of the treaties were announced and copies were made publicly available following signature.

The conventions will further strengthen the economic relations between Australia and the two treaty partners. The conventions serve as another step in facilitating a competitive and modern tax treaty network for companies located in Australia. The conventions will also satisfy Australia’s most favoured nation obligations under the existing treaties with France and Norway. Both conventions will substantially reduce withholding taxes on certain dividend interest and royalty payments in line with those provided in our tax treaty arrangements with the UK and the United States. This will provide long-term benefits for business, making it cheaper for Australian based business to obtain intellectual property, equity and finance for expansion.

The conventions will assist trade and investment flows between Australia and France and Australia and Norway, and further demonstrate the government’s commitment to update ageing treaties with major trading partners, as recommended by the Review of Business Taxation and the Review of International Tax Arrangements. The treaties will produce a positive economic outcome for Australia and the gains will include a larger and faster growing Australian economy with flow-on effects for employment, trade and investment. The new conventions achieve a balance of outcomes that will provide Australia with a competitive tax framework for international trade and investment while ensuring that the Australian revenue base is sustainable and suitably protected. Both conventions facilitate improved integrity measures for administering and collecting tax from those with tax obligations in either or both jurisdictions. The conventions reflect the government’s decision to incorporate enhanced information exchange provisions which meet modern OECD standards and to provide for reciprocal assistance in collection in future tax treaties where appropriate.

The government believes that the conclusion of the conventions will strengthen the integrity of Australia’s tax treaty network through bilateral cooperation between countries to help ensure taxpayers pay their fair share of tax. Both conventions will enter into force after completion of the necessary processes in both countries and will have effect in accordance with their terms. I note that both treaties have been considered by the Joint Standing Committee on Treaties, which has recommended that binding treaty action be taken on both conventions.

The enactment of this bill and the satisfaction of the other procedures relating to proposed treaty actions will complete the processes followed in Australia to bring the conventions into force. On that basis, I commend this bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.

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