Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

Firstly, I would like to thank the members who have contributed to this debate. Schedule 1 to the Tax Laws Amendment (2011 Measures No. 8) Bill 2011 allows the Commissioner of Taxation discretion to disregard certain events that would otherwise trigger the assessment of certain income for a primary production trust in the year of the event. The amendments ensure that elections to spread or defer income made by primary production trusts do not automatically end upon the happening of a disentitling event. These include when a beneficiary becomes insolvent or leaves Australia permanently. This broadly restores the position that existed prior to the Tax Laws Improvement Project in 1997, where a commissioner's discretion existed in the income tax laws. Schedule 1 secures a favourable position for taxpayers, as the amendments apply from the 2005-06 income year.

Schedule 2 to this bill clarifies the intended operation of the petroleum resource rent tax. Specifically, these amendments reinforce the long-established interpretation, recently affirmed by the Federal Court, of how the taxing point is determined for the purposes of the petroleum resource rent tax. The amendments put beyond doubt that the final intended use of a substance must be taken into account in determining where in a production chain a marketable petroleum commodity is produced. This in turn is used in determining the location of the taxing point within a petroleum operation. Passage of these amendments will provide current and future PRRT taxpayers with certainty as to how the petroleum resource rent tax applies in their specific projects. This is particularly important because from 1 July 2012 the petroleum resource rent tax will be extended to cover all Australian oil and gas projects, including, for the first time, those located onshore, as well as the North West Shelf project.

I wish to foreshadow government amendments to remove schedule 3 from the bill. Removal of schedule 3 would allow further consultation on this measure without delaying passage of the bill, because the amendments contained in schedules 2 and 4 require urgent passage. After listening to recent feedback from stakeholders and after the hard work of the member for Parramatta, it has become evident that some further modifications may be required to ensure that the proposed amendments do not affect company directors inappropriately in certain circumstances. The government remains committed to implementing amendments to protect workers' entitlements and ensure that company directors take their tax obligations seriously, and we wish to discourage phoenix operators and will reintroduce this measure early in 2012 after further and final consultation.

Schedule 4 to this bill makes minor consequential amendments to the taxation of gaseous fuels. The minor amendments have been developed with the benefit of extensive consultation with the gaseous fuels industry. The minor changes ensure that the home manufacture of compressed natural gas with domestically rated equipment does not impose excise obligations even where there is some business use. The changes also clarify both the requirements for LPG notices and the fuel tax credit arrangements for the unlicensed supply of packaged LPG. The minor changes ensure that the taxation arrangements for gaseous fuels do not have any unintended impacts and minimise industry compliance costs. The measures contained in schedule 4 to the bill will apply from 1 December 2011. I commend this bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

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