Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Hansard source

The coalition will not be opposing the Tax Laws Amendment (2011 Measures No. 2) Bill. Like all tax law amendment bills, this makes a number of changes to the tax law and the administration of tax. It does so in this case through five schedules, all essentially unrelated. I will run through each of them briefly. Schedule 1 adds some deductible gift recipients to the existing schedule—namely, the Charlie Perkins Trust for children and students and the Roberta Sykes Indigenous Education Foundation. It adds those to the relevant list allowing donations over $2 to be tax deductible and thereby encouraging public support for charitable activities.

The second schedule deals with some changes with respect to self-managed superannuation funds. The provision in this schedule will allow the government, through regulation, to impose rules on self-managed superannuation fund investments in personal use assets, such as collectables and artworks amongst a number of other things identified. Members would be aware that the sole purpose test of the relevant superannuation act requires that assets of a superannuation fund be held for the sole purpose of generating retirement income. The recent Cooper Review, the review of the entire superannuation system, recommended that self-managed superannuation funds be prohibited from investing in personal use assets and that those assets, to the extent that they existed within those funds, should be disposed of within five years. The review found that personal use assets lent themselves to personal enjoyment and therefore failed that sole purpose test that I just outlined. The government announced back in July last year that it did not support those conclusions of the Cooper review but said that it would tighten the requirements around personal use assets rather than take up the recommendation to prohibit them. That is what this schedule seeks to do—to provide the government with the power of regulation to impose rules relating to investment of personal use assets by self-managed superannuation funds.

The Assistant Treasurer, the member for Maribyrnong, outlined in his second reading speech back on 24 March the government's intentions in this regard when he said that the amendments would allow regulations to make rules relating to how self-managed superannuation fund trustees make, hold and realise investments in collectables and personal use assets. He said that the purpose of the rules would be to ensure that these investments are made for retirement income purposes and not for current day benefit. He further advised that the content of those regulations is being developed in consultation with the industry. We believe that this reflects a sensible balance. We understand that it is supported by the Self-Managed Super Fund Professionals Association of Australia.

The third schedule deals with tax file numbers with respect to locating superannuation accounts in order to facilitate consolidation of those accounts. It allows super fund trustees and retirement savings account holders to use tax file numbers to locate accounts and facilitate consolidation of multiple accounts. At the present point in time, there are some restrictions on the ways that super funds can use tax file numbers. In particular, they are not permitted to use tax file numbers to locate accounts for the purposes of the very consolidation that this schedule deals with. This will not replace account or membership numbers, but will simply remove the requirement that super funds use other methods for searching for multiple funds before using tax file numbers. Apparently, individuals can still choose not to give their tax file number. There are not changes to the consequences for failing to do so. We agree on this side of the House that it is important to maximise individual retirement savings and for small accounts to be consolidated as easily and as quickly as possible.

The fourth schedule deals with the goods and services tax and specifically the issue of the determination of Australian taxes, fees and charges with respect to the goods and services tax. Currently, the federal Treasurer determines by legislative instrument those Australian taxes, fees and charges that are not regarded as consideration for a taxable supply and therefore not subject to GST. That determination is an administrative process involving the Ministerial Council for Federal Financial Relations and the formal agreement of state and territory treasurers. The instrument is updated twice yearly and over the now more than 10 years of the operation of the goods and services tax it has grown, I am advised, to over 600 pages. The government's view is that this is becoming a significant administrative burden on all levels of government. The amendment means that the default position will be that Australian taxes, fees and charges are not subject to GST and therefore will not need to be listed. Regulation may be made to treat the payment of an Australian tax, fee or charge as consideration for supply and therefore as subject to the goods and services tax. On the subject of goods and services tax, my friend opposite would think it remiss of me not to remind the House that I always welcome in tax law amendment bills schedules that consolidate and protect the goods and services tax which this side of the House fought so hard to implement and those opposite fought so hard to prevent coming into existence. Now that they are in government, perhaps they realise the errors of their ways, and it is good to see them preserving and protecting the goods and services tax which their former leader and former Prime Minister said on the day of its introduction would be marked down 100 years from now as 'a day of fundamental injustice'. I had been unfair in the past that no-one would remember Fundamental Injustice Day declared by the member for Griffith back in 1999, when the legislation for the goods and services tax passed through the House. I think in the years from now he will remember Fundamental Injustice Day, but it will not be the day that the goods and services tax passed through the House; it will be 24 June 2010.

Schedule 5, the final schedule, as is often the case with these tax law amendment bills, simply makes a range of corrections, additions and the sorts of changes and improvements you would expect to see in taxation law. We do not oppose this bill, and I commend it to the House.

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