Shayne Neumann (Blair, Australian Labor Party) Share this | Hansard source

I speak in support of the Tax Laws Amendment (2009 Budget Measures No. 1) Bill 2009. I will not speak for very long in relation to this matter, but it is important to get a bit of history into this.

The government did not want to review the scope of the GST, nor the amount or level of GST that is charged on goods and services throughout Australia. On 11 June, the then Assistant Treasurer, the Hon. Chris Bowen—and I see he is in the House—announced that the Board of Taxation would undertake a review of how to make the GST work better for all of us, how to ensure flexibility for small business and how to make sure it does not act as an impediment to the operation and integrity of the tax system.

As part of its scope, it was to look at the application of the GST, the rulings process, the period of review, how overpaid tax refunds are dealt with and also how to simplify other aspects. On 12 May last year, the then Assistant Treasurer announced the release of the board’s report with 46 recommendations, 41 of which were taken up by the government. The current Assistant Treasurer, Senator Nick Sherry, also announced the release of a draft bill on 6 October 2009 and that the government would take up the recommendations of the board—not in whole, but certainly substantially.

There were one or two changes to the draft bill as a result of representation that were made. But as is the case with so many tax bills, the amendments are done by schedule, and I will quickly go through those. Schedule 1 deals with the four-year review periods for credits. In its report, the Board of Taxation recommended that the law be amended to ensure input tax credits and the fuel tax credit be claimed within a four-year period. That is important; these things should not go on forever and the credit should be claimed within a period of four years. People’s tax situations should not drift and procrastinate. It is important that if you are going to claim the credit you should do it within a specified period of time. That is important for the good governance of the tax system as well.

Presently, all indirect tax liabilities and entitlements are subject to a four-year limitation period, but the absence of any restriction on input tax credits and fuel tax credits is an irregularity. The bill gives effect, as I said, to one of the board’s recommendations. The states and territories have advocated strongly for this change. It amends the fuel tax law with effect from 1 July 2010, and that is a worthy amendment in the circumstances.

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Schedule 2 deals with the refund collection system. Currently external territory residents must claim refunds of GST and wine equalisation tax through the Tourist Refund Scheme for accompanied luggage. The amendments allow those residents, for example people who live on Norfolk Island or on Christmas Island, to claim refunds under the Tourist Refund Scheme on goods exported other than as accompanied baggage. The amendments generally commence on 1 July 2010 and apply to goods purchased on or after that date. The measure extends that scheme to allow residents of Australia living in those territories to get access, and it addresses any difficulties those residents have.

Schedule 3 also deals with agency provisions and makes some important amendments to remove anomalies It extends the range of entities that can use the agency provisions with respect to GST law and helps facilitate supplies and acquisitions. It helps make sure our tax system is better. It is supposed to reduce the compliance costs for entities, particularly intermediaries, principals, agents and third parties. I commend this aspect of the bill as well.

Schedule 4 deals with gambling activity for entities outside Australia and clarifies how the GST law may apply to those people who are gambling operators. The commissioner administers the GST in this way and I think it is important that we reduce uncertainty. I acted for quite a few people in the gambling industry when I was a practising lawyer. They always have trouble with the taxation system. It is not always easy for them to operate their businesses, whether they have casinos or they are simply engaged in the racing industry. We should do anything we can to make things easier for those vital industries operating pursuits that many Australians find very enjoyable. In my electorate of Blair there is a great racecourse, Bundamba, and Brett Kitching is an old mate of mine. My two brothers and I used to play basketball with him and his brothers. He runs that racecourse. It is an important part of the fabric of Ipswich and the Ipswich Cup is attended by thousands every year. I had many clients in the racing industry and the gaming industry so I know it is important to clarify how the GST law applies to gambling operators that accept wagers from entities outside Australia.

Schedule 5 deals with recovering overpaid refunds. The commissioner applies the Taxation Administration Act 1953 to treat overpayment refunds of a net amount on luxury car tax credits and fuel tax credits by administering overpayments with the general interest charge—they always seem to get more money out of us and interest. These are calculated on a resulting running balance account deficit debt when the administrative overpayment is allocated to the running balance account. There is some suggestion that case law makes this whole area a bit uncertain. I have read that the measure will ensure consistent treatment between taxpayers who incorrectly determine their liability to pay GST or other indirect taxes and taxpayers who incorrectly determine their entitlement to a refund. The commissioner always has discretion with respect to remitting GIC in part or in full and should do so if the error is innocently made. The measure forms part of the government’s response to the Board of Taxation review and should be commended.

The final schedule is schedule 6. The GST law sets out the requirements for a supply to be a taxable supply, including that supply made for consideration. It deals with associates who supply each other for no consideration. It fixes up an anomaly and it should be commended as well. This is reformist, non-contentious law supported by both sides and in the circumstances I commend the bill.

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