Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

In resuming debate on the Tax Laws Amendment (2009 Measures No. 3) Bill 2009, I will briefly address each of the four schedules within the bill, but I indicate that the opposition will be supporting this bill. Schedule 1 deals with the GDP adjustment factor for the 2009-10 income year. The government had previously announced, and in fact legislated, earlier in the year a reduction of that factor in light of the current economic circumstances. That passed through the parliament, and this schedule merely repeats that exercise for the 2009-10 income year. Under the PAYG instalment system, certain taxpayers calculate their PAYG instalment amounts according to the GDP adjustment factor, which essentially is determined using GDP growth between the last two calendar years—as the explanatory memorandum outlines. If that had been the case this year, it would have meant that the GDP adjustment factor would have been nine per cent for the 2009-10 income year. This bill sets it at two per cent.

The coalition has said previously that this is a welcome direction for small business. We had a varied proposal which we think provided more flexibility for all taxpayers in this situation. That was in fact announced by the shadow minister for small business prior to the government coming onto the field in this regard. The shadow minister for small business, the member for Moncrieff, will be following me in this debate, so I will not take the time of the House tonight to reiterate all of that in my contribution. I know he will address all of those issues and a range of issues relating to his shadow portfolio of small business in his own contribution in just a little while.

Schedule 2 of the bill brings into effect an announcement by the previous government. It allows entities that voluntarily register for GST to align their reporting of PAYG with their GST reporting. As I said, it was a measure announced by the previous coalition government, certainly in its last budget, and it will reduce compliance costs for eligible taxpayers. From my perspective as the shadow Assistant Treasurer, I am glad that the government has decided to legislate to bring this measure into being. It will reduce the compliance burden on entities that voluntarily register for GST by allowing them to report GST and PAYG together on an annual basis.

Schedule 3 makes very technical amendments to the petroleum resource rent tax regime. Again, this was announced by the previous coalition government in their last budget of 2006-07. The current government announced in last year’s budget that it would proceed with the measures with an effective date of 1 July 2008. In technical terms, schedule 3 will introduce a functional currency rule into the resource rent tax regime along similar lines to the functional currency rule used for income tax. This will allow entities to use a currency that better reflects the international petroleum market when determining their tax liability. The schedule also amends the petroleum resource rent tax to ensure that all exploration expenditure in an exploration permit area is deductible for petroleum resource rent tax purposes. Currently certain exploration may not be deductible. This amendment will ensure that the correct operational intention applies and the explanatory memorandum details that very well. The schedule also introduces, as I said, a highly technical amendment to provisions relating to petroleum sourced from within a project for refining and also extends the offshore exploration incentive.

Schedule 4, which is the schedule we see in many of these tax law amendment bills, amends the Income Tax Assessment Act 1997 to update the deductible gift recipient list. In doing so, it includes three new entities which are the Royal Institution of Australia, Diplomacy Training Program Limited and the Leeuwin Ocean Adventure Foundation. Once this bill is passed, each of those will be added to the deductible gift recipient list. The opposition will be supporting this Tax Laws Amendment (2009 Measures No. 3) Bill 2009. As I said earlier with respect to some of the small business measures and the coalition’s position, the shadow small business minister, the member for Moncrieff, will be making a contribution a little later.

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