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

I thank those members who contributed to this debate on the Tax Laws Amendment (2010 Measures No. 2) Bill 2010, including the very fine contribution from the member for Werriwa. The amendments in schedule 1 will strengthen the operation of non-commercial loans to ensure that benefits provided by a private company to its shareholders or their associates, such as the private use of yachts or holiday homes, will need to be provided at market rates or the use of the asset may give rise to deemed dividends under division 7A.

The changes include a range of technical amendments to strengthen the operation of these rules to ensure that they cannot be circumvented by the use of corporate limited partnerships or by interposing entities between the private company and the shareholder. These amendments will provide more consistent treatment between shareholders and employees of private companies to ensure that the shareholders of private companies pay their fair share of tax whilst also ensuring that the rural and small business communities are not unintentionally impacted.

Schedule 2 is a fairness and integrity measure. The core focus of the amendments is to ensure that an eligible beneficiary who receives a distribution or is entitled to trust income from a closely held trust or family trust pays his or her fair share of tax. By extending the tax file number withholding arrangements to closely held trusts and family trusts, the Australian Taxation Office will be able to collect tax file number information to enable them to data-match trust distributions with the amounts reported in a beneficiary’s tax return. This measure will encourage beneficiaries to comply with their obligations under taxation law and help to reduce nonreporting and underreporting of income.

Schedule 3 exempts from income tax the value of the benefit received by eligible recipients of the HECS-HELP benefit. The HECS-HELP benefit reduces a person’s HECS and/or HELP debt repayment or in some cases, where a repayment is not required due to low income, directly reduces their HELP debt. An individual can apply for a HECS-HELP benefit when he or she has studied an eligible course in mathematics, science, nursing or teaching and then enters the workforce in an approved field. The value of the HECS-HELP benefit will be made income tax exempt, with application from 1 July 2008.

Schedule 4 amends the Income Tax Assessment Act 1997 to make the Global Carbon Capture and Storage Institute Ltd income tax exempt for a four-year period. The institute will accelerate the development and global adoption of environmentally sustainable carbon capture and storage technology. It will drive the commercialisation of carbon capture and storage technologies. The institute will contribute to global action on climate change. The information and expertise developed by the institute will be disseminated broadly and globally, to the benefit of both the Australian and the global carbon capture and storage communities. This government is working to mitigate the risks of climate change, and supporting the institute is part of that strategy.

Schedule 5 amends the list of deductible gift recipients in the Income Tax Assessment Act 1997. Taxpayers can claim income tax deductions for certain gifts to organisations with deductible gift recipient status, assisting organisations to attract public donations and support. This schedule adds two new organisations to the act. The Sichuan Earthquake Surviving Children’s Education Fund will provide assistance in the reconstruction of schools in the Sichuan province in China and to children in the Sichuan province, following the earthquake on 12 May 2008. The Bali Peace Park Association Inc. will create a peace park on the land where the terrorist bomb was detonated on 12 October 2002. The schedule also extends the period in which Yachad Accelerated Learning Project Ltd can collect deductible gifts by another three years.

Schedule 6 repeals over 100 unlimited amendment periods from the income tax laws. The repeal of these provisions will address the lack of certainty experienced by taxpayers who have an unlimited amendment period and also reduce the volume of unnecessary provisions in the tax laws. I commend this bill to the House.

Question agreed to.

Bill read a second time.

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