Stephen Jones (Throsby, Australian Labor Party) Share this | Hansard source

Tax reform is continuous because it is essential that the government of the day ensures that our taxation system is fit for the purpose. Included in those purposes is regulating and encouraging activity, raising revenue and, in certain circumstances, discouraging certain activity, such as smoking cigarettes and the like. The measures contained within this series of bills go to each of those points. In most respects, they appear to have the support of all members of this House—and that is welcomed, because there have been instances where legislation intended to reform the tax system has not enjoyed support on all sides of this House—and it is probably why the Treasurer was able to stand up in his budget speech last night and deliver a budget which is going to return the budget to surplus in 2012-13 and at the same time provide additional funds for much needed social purposes. This is in complete contrast with those on the other side, who have a gaping $70 billion black hole in their budget. The reason there is a $70 billion black hole in their budget is that they are not willing to do the hard yards—in particular when it comes to putting in place responsible savings measures.

There are five schedules in the Tax Law Amendment (2012 Measures No. 1) Bill 2012; the first of which has the intention of putting in place amendments which will restore the intended operation of the GST law. This was made necessary because of an adverse decision in the Department of Infrastructure and Transport case. It will ensure that the supply by a healthcare provider paid for by an insurer or a government entity is treated as GST-free supply, where the related supply from the healthcare provider to an individual is GST-free health supply. The amendments avoid increased compliance costs arising for taxpayers in the multiparty arrangements involving suppliers of health related goods and services, and have been supported by industry.

The second schedule also deals with GST treatment of appropriations. The amendments again restore the policy intent of GST law following another adverse decision in 2009 of the full Federal Court in the TT-Line case. The amendments will ensure that payments under a government appropriation relating to the non-commercial activity of government related entities are not subject to GST. This was the understanding of the law prior to the TT-Line decision. The amendments will ensure that there is no increase in compliance or cash-flow costs for government entities and that the Commonwealth, states and territories will not need to change their budgetary processes.

Schedule 3 of the bill is a savings measure. Schedule 3 goes to the superannuation concessional contributions cap. It attempts to put back the indexation that would otherwise have applied for the concessional contributions cap. It was expected that the indexation would increase the concessional contributions cap from $25,000 to $35,000 per annum in the year 2013-14. The pause in indexation essentially means that the cap will not now increase until 2014-15. As the higher concessional contributions cap for individuals aged 50 and over and the non-concessional contribution cap only move with changes in the general contributions cap, these contributions caps will not change in 2013-14. They are expected to generate savings in the order of $485 million over the forward estimates period. It is an important savings measure and again one that enables us to deliver a budget which will return to surplus.

The fourth schedule goes to the situation where taxpayers either accidentally or inadvertently make contributions in excess of the concessional contributions, thereby attracting a greater tax upon those contributions. The measures in this bill will enable the tax office to refund—on the request of the taxpayer, without attracting any more than the marginal tax that would otherwise apply to those superannuation contributions—those excess superannuation contributions as if they had not been paid as superannuation and are just taken as any normal form of income.

The fifth and sixth schedules go to the disclosure of superannuation information. The sixth schedule in particular is important because it places an obligation on employers to advise when the superannuation guarantee contributions are going to be made to their employees. This is important. It works hand-in-hand with the Fair Work legislation because it sends a trigger to the individual employee enabling them to check that their superannuation contributions have been made.

The ATO reports that the vast majority of employers are paying in accordance with their obligations their superannuation contributions on behalf of their employees. But the 2010-11 annual report reported that there were in excess of 17,000 individual employee complaints in relation to suspected non-payment of superannuation entitlements. Nearly $269 million in unpaid superannuation entitlements was collected and deposited into employee superannuation accounts as a result of these complaints and the investigations by the tax office, and there were around $140 million in penalties. Whilst it may only be one per cent of the employer population that is not complying with their obligations, the impact on employees is profound, and that early signal to the employee, which enables them to check if they fear their superannuation contributions are not being made, saves a lot of heartache for the employee. It ensures that their entitlements are paid in full and on time and alerts the tax office, as well as the employee, to other issues that may be going on inside the firm. I am very pleased that each of these schedules is enjoying the bipartisan support of all members in this place—as indeed they should. I commend this legislation to the House.

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