Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I too rise to address the Tax Laws Amendment (2009 Measures No. 3) Bill 2009. This bill contains amendments to three areas of tax law. The first amendment concerns PAYG instalments. The bill reduces PAYG instalments for 2009-10 for taxpayers who pay quarterly instalments. It also allows eligible taxpayers who have voluntarily registered for GST and who choose to remit GST annually to also make their PAYG instalments annually. Secondly, the bill makes minor amendments to the Petroleum Resource Rent Tax Assessment Act 1987 to reduce compliance costs for taxpayers. Thirdly, the bill lists a couple of new organisations as deductible gift recipients. I know that such a listing is always eagerly looked forward to by people who do good work in our community.

I will speak firstly to the amendments concerning PAYG instalments, which are the most significant measures in this bill, as discussed by the previous speaker. These changes will deliver direct benefits to small business. Under current arrangements, the GDP adjustment factor calculated under the present income tax law would be around nine per cent. Taxpayers earning business or investment income pay quarterly instalments during the year towards their final tax liability so they do not have an unmanageable tax bill at the end of the year. These instalments are calculated based on the GDP adjustment method. It is based on the taxpayer’s taxable income from the previous year adjusted by the GDP factor, which reflects GDP growth over the previous two years. In simple terms, as I understand it, the instalments are based on last year’s taxable income plus expected profit growth.

However, these are unusual days and the GDP factor—which, as I said, would be at nine per cent—is an exaggeration of the kind of profit growth that most small businesses can expect at the moment. That might be different, perhaps, for some of those businesses that have thrived over the last three or six months—receivers, perhaps. I note that some of the major supermarket chains have also thrived. Obviously people are eating in.

See this speech in context