David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Hansard source

I would like to thank those members who have contributed to this debate. The Tax Laws Amendment (2012 Measures No. 4) Bill 2012 amends various taxation laws in order to implement a range of improvements to Australia's tax laws. Schedule 1 amends the tax laws to better target the tax concession for living-away-from-home allowances and benefits to people who are legitimately maintaining a home away from their actual home in Australia, for an initial period. These reforms will ensure that this taxpayer funded tax break cannot be misused or exploited.

The schedule implements the reforms that were announced as part of last year's Mid-Year Economic and Fiscal Outlook and also the reforms announced in this year's budget. As part of the Mid-Year Economic and Fiscal Outlook, in November last year the government announced two reforms to the tax concession. First, in order to be able to access the tax concession, temporary residents will need to be maintaining a home in Australia for their immediate use and enjoyment at all times that they are required to live away from home for work. This addresses the anomalous situation where a temporary resident worker could receive much more take-home pay than an Australian worker performing the same task. Second, all individuals will need to substantiate their actual expenditure on accommodation and food, where it goes beyond the commissioner's reasonable amount.

In this year's budget we announced two new reforms to the tax concession. To be able to access the tax concession, permanent residents will need to be maintaining a home in Australia for their immediate use and enjoyment at all times that they are required to live away for work. There will be a 12-month time limit on how long all people, other than fly-in-fly-out and drive-in-drive-out workers can access the tax concession.

The government has held a number of consultation processes in relation to these reforms. I would like to thank those individuals and organisations that made submissions. In response to the submissions received, the government deferred the general start date of the reforms from 1 July 2012 to 1 October 2012, with the reforms announced at the budget applying from 1 July 2014 for arrangements entered into prior to budget night.

I would also like to thank the House Standing Committee on Economics for the considered analysis detailed within their report. It supported the policy intent of the reforms but identified that the schedule as currently drafted results in a number of unintended consequences. The government will be moving amendments that pick up on all of the key recommendations in the committee's report, to ensure the reforms operate as intended.

The government's reforms to the tax concession for living-away-from-home allowances and benefits will provide savings of $1.9 billion over the forward estimates. For up to 12 months, the tax concession will continue to support people who are bearing additional costs because they have to maintain a home for work purposes away from their actual home in Australia. The reforms will not affect the tax concession for fly-in-fly-out and drive-in-drive-out arrangements, as these employees will not be subject to the 12-month time limit. They will not affect the tax concessions provided for remote area fringe benefits and they will not affect the tax treatment of travel and meal allowances.

Schedule 2 amends the GST law to ensure that the correct provision of the GST Act applies where a representative of an incapacitated entity is a creditor of that entity. This will ensure certainty for entities involved in the mortgage lending sector and reduce compliance costs for these entities. The amendments restore the intended operation of the GST law following previous amendments to the GST Act. As a result of the previous amendments, there are circumstances where two conflicting provisions of the GST Act could apply to a mortgagee, or other holder of security interests, in possession or control of a corporation's property. These amendments will apply from the first quarterly tax period after royal assent.

Schedule 3 amends the previous schedule 3 to the Tax Laws Amendment (2012 Measures No. 2) Act 2012 so that no interest or penalties are payable if an overpayment of income tax arises or if additional tax becomes payable under the recent amendments to the consolidation regime for consolidation events before 30 March 2011. However, where interest has already been received by a taxpayer, in most cases the taxpayer will not need to pay back the amount received. In addition, taxpayers will not have to pay interest and penalties if a deduction is disallowed as a result of the recent amendments. These changes were announced in November 2011 as an important part of the amendments to the consolidation regime. I commend the bill to the House.

Question agreed to.

Bill read a second time.

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