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

In speaking on this Tax Laws Amendment (2009 Measures No. 2) Bill 2009 I indicate that the opposition will be supporting it. There are eight schedules that deal with a range of technical and mechanical matters with respect to our tax laws. They were outlined in great detail by the Assistant Treasurer when this bill was introduced at the end of the last sitting, but I will run through them briefly. Schedule 1 amends a range of acts, including the Banking Act, the First Home Saver Accounts Act, the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997, to remove unintended tax implications that arise from a failed authorised deposit-taking institution to the relationship with APRA, the Australian Prudential Regulatory Authority, with respect to payments made under the Financial Claims Scheme. This schedule will ensure that the payments made under the scheme are treated as if they were made by the failed authorised deposit-taking institution. It also prevents tax implications from arising from farm management deposit account holders who had their account with a failed approved deposit institution when they started—a new account with a separate ADI. For individuals with retirement savings accounts with a failed ADI, this schedule will ensure that the payments made by APRA into a new retirement savings account in a separate ADI will have the same tax treatment as a rollover superannuation benefit. Similarly, a payment made by APRA into a new first home savers account will be treated as a transfer from one to another. This will prevent individuals from claiming the government contribution twice. The schedule also deals with, and introduces, a range of reporting and withholding requirements for APRA in the case where an ADI fails and payments must be made under that scheme.

Schedule 2 of the bill makes some amendments to the Income Tax Assessment Act 1997 and to some related legislation to provide greater accessibility to small business capital gains tax concessions for owners of capital gains assets used under a passive asset structure. This was introduced by the previous coalition government in 2007. At the time, changes were also made to the small business entity test and the net asset value test. Businesses in situations where an entity owns a capital gains tax asset but another related entity uses that asset in carrying on a business will now have greater access to those capital gains tax concessions. Schedule 3 proposes to clarify the law with respect to capital gains tax. Again, it does so by amending the Income Tax Assessment Act 1997. This is a highly technical area, as the Assistant Treasurer outlined in his second reading speech. This schedule is seeking to remove beyond any doubt what could be a technical interpretation of the law that might in a worst case scenario—the Assistant Treasurer and I would probably agree that it would be a remote scenario, but nonetheless a highly technical interpretation—see taxpayers having a CGT liability on receiving a tax offset and the like. This schedule simply puts beyond any doubt that unintended consequence occurring.

Schedule 4 provides a refundable tax offset for certain projects approved under the National Urban Water and Desalination Plan. The offsets are to be available from 2008-09 through to 2012-13 by issuing certificates. There is a range of detail about that within the bill. Schedule 5, which is a common schedule in our tax laws amendment bills, updates the deductible gifts recipient list, and it does that in two ways: by adding four new entities and by renewing three existing entities that the Assistant Treasurer outlined in his speech. Schedule 6 will expand the operation of the Australian Business Register, which was established by the former coalition government to reduce administrative costs for small businesses dealing with government agencies with the intent of reducing the number of times businesses have to give identical information to different agencies. This schedule will expand the operation of the register by using certain contact information provided by business to a government agency for updating information at all the other related government agencies. In doing so, it will allow the business register to act as a multi-agency registration authority.

Schedule 7 removes the requirement for a business to be a member of the Greenhouse Challenge Plus program to be eligible for more than $3 million in fuel tax credits. The requirement was there in the past. However, because the program ceases operation on 30 June this year it would have meant that businesses would not have been able to claim their fuel tax credits. This simply ensures that unintended consequence does not occur. The last schedule, schedule 8, will provide a tax exemption for payments made up under the clean-up and restoration grants scheme. Back in February, in the wake of the tragic bushfires in my home state of Victoria, the federal government and the Victorian state government announced a $51 million assistance package to assist small business and primary producers affected by the bushfires. I note that one of the ministers responsible for that, the Minister for Agriculture, Fisheries and Forestry, is here in the chamber. That has been a good package. It includes $5,000 clean-up and restoration grants, which can increase to up to $25,000 if the damage is significant. What this schedule does, the minister will be relieved to know, is ensure that these grants are not treated as assessable income. That exemption will apply from 2008-09 through the 2010 income year.

As I said at the outset, this tax law amendment bill deals with a range of necessary and technical tax matters to ensure the correct operation of the law. It went to the Senate Standing Committee on Economics. The committee reported on 7 May. It recommended that the bill be passed. The opposition is supporting this bill and I commend it to the House.

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