Sussan Ley (Farrer, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

I am pleased to speak on the Tax Laws Amendment (Transfer of Provisions) Bill 2010. The bill deals with five schedules. Schedule 1 concerns the collection and recovery of tax. Schedule 1 rewrites the remaining sections of part 6 of the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953. Part 4 contains rules about the collection and recovery of income tax, including rules about when income tax becomes due and payable, rules allowing the commissioner to make estimates of certain tax debts and to take recovery action based on those estimates, and rules imposing penalties on directors of companies that fail to pay certain tax debts. The rewritten rules of collection and recovery include those giving the commissioner power to seek security from a taxpayer for an existing or future tax liability in certain situations such as a serious risk of tax liability not being paid, expanded security deposit rules to cover all taxes administered by the commissioner and new machinery rules and higher penalties for noncompliance.

Schedule 2 relates to commercial debt forgiveness. Schedule 2 rewrites the remaining schedule 2C to the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997 and contains the rules for the income tax treatment of the gains made when a taxpayer’s debt is forgiven. Schedule 3 rewrites the remaining schedule 2E to the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997. Schedule 2E ensures that a lessor and a lessee of a luxury car get the same income tax treatment they would have got had the lessor sold the car to the lessee and lent the lessee the money for the purchase.

Schedule 4 is on farm management deposits. Schedule 4 rewrites the remaining schedule 2G to the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997. Schedule 2G establishes the farm management deposits scheme, which allows eligible primary producers to set aside pre-tax income in profitable years for subsequent withdrawal in low-income years. Schedule 5, on general insurance, rewrites the remaining schedule 2J to the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997. Schedule 2J ensures that general insurance companies are taxed on premium income received and can deduct liabilities for outstanding claims over the period of risk under the policies to which the income and deductions relate.

The subject matter of all those schedules is quite interesting and complicated, but that is not what this bill is about. This is about a rewrite. This is about an ongoing tax law simplification project which rewrites the archaic and sometimes very difficult to interpret rules in the 1936 act into the 1997 plain English act. It is taking an awfully long time. We would like to see it speeded up and we would like to see provisions that are not as simple and straightforward in their rewriting as these ones accelerated in the queue. However, in the rewrite, quite appropriately, there are no changes to the law. The coalition approves this bill. It is uncontroversial and I commend it to the House.

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