Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Hansard source

The Tax Laws Amendment (2009 Measures No. 2) Bill 2009 is a multifaceted bill covering a wide range of tax related amendments. It looks at the tax amendments to the Financial Claims Scheme, it covers capital gains matters, it covers tax offsets for water desalination projects and it covers issues in relation to the Fuel Tax Act. It also contains assistance measures for small businesses and primary producers affected by the Victorian bushfires, amongst other maters.

Many of these amendments go hand in hand with the measures we have taken to address the global financial crisis. These are measures that essentially give effect to the government’s decisive action in relation to the global financial crisis.

Before I go to some of the detail of these matters, I want to say a couple of things more broadly about the government’s response to the global financial crisis, as it has now been called. It is useful to think about some of the alternative scenarios faced by this nation. Can you imagine what Australia would be like today if we had not taken the decisive response to the global financial crisis we did take? Where would we be? We would be much more like America today, I suspect, if we had not taken such decisive action. America had a weak president, a very much diminished president, when the global financial crisis kicked in. I believe there was some of the lowest polling ever in America’s history as a consequence of that. America’s initial response to the global financial crisis was denial, and then inaction. We can contrast this with Australia’s strong and decisive action under the Rudd government, which this bill in detail reflects. If we had not taken the sort of response that we did under the Rudd government our cities and towns would be much more like many of America’s cities today, where hundreds of thousands of people are losing their jobs and their homes. Under this government’s response, which the detail of this bill backs up, we are creating hundreds of thousands of jobs. Our response has been strong and immediate.

I would like to go through some of the detail and aspects of this bill because they are very important to this nation. First, in relation to the capital gains tax amendment components, under the APRA scheme capital gains and losses arising from rights under the scheme are disregarded ensuring that the scheme does not trigger capital gains tax consequences that would not have arisen if the scheme had not been applied. In relation to the Farm Management Deposits, an amount paid under the scheme in relation to the Farm Management Deposit, the FMD, will be treated as a transfer of the FMD for tax purposes and not as a withdrawal of the FMD and the making of a new FMD. This ensures that the scheme will not trigger any tax consequences that would not have arisen if the scheme had not applied.

In relation to the retirement savings accounts, an amount paid under this scheme in relation to a retirement savings account with a failed financial institution into a new retirement savings account with another institution is treated as a rollover superannuation benefit, and I think that is very appropriate. This ensures that the payment is treated the same for tax purposes as if it had been made by the failed institution.

In relation to the first home savers account, an amount paid under the scheme in relation to a first home saver account with a failed financial institution into a new first home saver account with another institution is treated as a transfer between accounts. This ensures that the payment into the new account does not become ineligible for government co-contribution. An account holder’s ineligibility to have a first home saver account is rolled over into the new account and the time to notify a provider or the ATO of the ineligibility is extended so that he or she is neither advantaged nor disadvantaged by any changes in eligibility that occur whilst the existing account with the failed institution cannot be assessed.

There is more detail in relation to this schedule; however, the intent here is to ensure that people are not disadvantaged by the quirks of the taxation system and so ensure that these initiatives are implemented in a fair and equitable way.

The Financial Claims Scheme was enacted in October 2008. The introduction of the legislation for the scheme was brought forward because of the global financial crisis and so was not able to exclude any consequential amendments. In broad terms, it aims to provide the same taxation treatment that APRA makes under the Financial Claims Scheme as would have applied to the payments if they had been made by the failed financial institution or insurance company. Capital gains and losses in relation to rights created by the Financial Claims Scheme are not ignored. Payments in relation to a Farm Management Deposit—(Quorum formed) Clearly, there has been a change of thinking in the tactics committee of the Liberal Party, or at least perhaps a rather spoilt brat running the show.

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