Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Hansard source

I move:

That the amendments be disagreed to and amendments made in place thereof be agreed to:

(1)    Schedule 1, items 1 to 7, page 3 (line 4) to page 7 (line 7), omit the items.

(2)    Schedule 1, item 8, page 7 (lines 9 and 10), omit the item, substitute:

8  Section 12-5 (table item headed “political parties”)

Repeal the item, substitute:

(3)    Schedule 1, item 9, page 7 (line 15), after “under this Act”, insert “(other than Subdivision 30-DA)”.

(4)    Schedule 1, items 10 to 16, page 8 (line 26) to page 9 (line 8), omit the items, substitute:

10  After subsection 30-242(3)

Insert:

     (3A)    You can deduct the contribution or gift only if:

             (a)    you are an individual; and

             (b)    you do not make the gift or contribution in the course of ^*carrying on a ^*business.

(5)    Schedule 1, items 19 and 20, page 9 (lines 19 to 22), omit the items.

The government proposes that the House disagree to the amendments to the bill made in the Senate and accept in their place the amendments that I am moving on behalf of the government. Legislation to remove deductions or political donations was introduced into parliament for the second time in August 2008 in the Tax Laws Amendment (Political Contributions and Gifts) Bill 2008. Specifically, the legislation aimed to remove the ability of businesses and individuals to deduct a capped political donation up to $1,500, and remove the ability of businesses to claim political gifts and contributions under the general business expenses deduction provision. The Senate has proposed that businesses not be allowed to deduct political donations but that deductibility for donations by individuals be retained. The government agrees to the intent of the amendments proposed by the Senate; however, the specific form of the legislative amendments proposed by the Senate needs to be changed to avoid the creation of loopholes that would allow deductions by some types of businesses but not others. I note that the new measure will not reduce the tax expenditure as much as the original measure: the original measure saved approximately $10.5 million across the forward estimates while the new measure saves approximately $3.7 million. The government seeks to move amendments to the bill that are in the spirit but not in the form of those proposed by the Senate. Therefore, the government recommends that the House disagree to the Senate’s amendments and substitute the amendments that the government is moving in their place.

Just to recap, we accept the spirit of the Senate amendments, but they have been incorrectly drafted. We wish to give effect to the Senate amendments but in a way that ensures that all businesses are treated equally. The problem with the Senate’s amendments relates to some businesses—roughly, in the order of two-thirds of small businesses—being unincorporated, which under the Senate amendments means they would be treated as individuals, whereas incorporated businesses would be treated as businesses, and therefore there would be this unequal treatment of different businesses. That is the purpose of the amendments I have moved here in the chamber. We accept the spirit and intent of the Senate’s amendments, but they have not been accurately drafted. So I ask that the coalition support our intent to give effect to the spirit of the Senate amendments but in a more precise and accurate way, through the amendments that I have circulated here in the chamber today.

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