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

I move:

That this bill be now read a second time.

The Taxation (Trustee Beneficiary Non-Disclosure Tax) (No. 2) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments to the Taxation (Trustee Beneficiary Non-Disclosure Tax) Act (No. 2) 2007 as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

The Taxation (Trustee Beneficiary Non-Disclosure Tax) Act (No. 2) 2007 also imposes a secondary trustee beneficiary non-disclosure tax, which supports the core trustee beneficiary non-disclosure tax, which is contained in Taxation (Trustee Beneficiary Non-Disclosure Tax) Act (No. 1).

In order to discourage the use of circular chains of trusts to disguise the identity of the final beneficiary of trust income, trustee beneficiary non-disclosure tax is also imposed on the first trustee beneficiary where trust income is further distributed to another trust.

The rate of the trustee beneficiary non-disclosure tax is currently 46.5 per cent, the top marginal rate of 45 per cent plus the current Medicare levy rate of 1.5 per cent.

The Taxation (Trustee Beneficiary Non-Disclosure Tax) (No. 2) Amendment (DisabilityCare Australia) Bill 2013 will increase this rate from 1 July 2014 to 47 per cent, to reflect the increase in the Medicare levy from 1.5 per cent to 2 per cent.

These consequential amendments will help to ensure the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong and stable funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

Debate adjourned.

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