Phillip Thompson (Herbert, Liberal National Party, Shadow Assistant Minister for Defence) Share this | Hansard source

by leave—Thank you for the opportunity to make a short statement on this report. It deals with two important issues which were set in motion by the former coalition government. The first is the Australia-Iceland double taxation agreement, which will help avoid double taxation while preventing base erosion, profit shifting and treaty shopping. This is a positive step as part of the then Treasurer's announcement in September 2021 that the government would expand the tax treaty network to cover around 80 per cent of foreign investment in Australia and about $6.3 trillion of Australia's two-way trade and investment. This will enable Australian businesses to take advantage of the opportunities that will emerge in the coming years. We know that tax treaties improve tax system integrity through the establishment of a bilateral framework of cooperation on the prevention of tax evasion, the collection of tax debts and rules to address tax avoidance. This provides businesses with greater tax certainty, which will encourage increased economic integration through foreign investment and trade.

The treaty with Iceland is one of those important steps, despite trade in goods and services between the two countries being fairly modest. But, as the national interest analysis stated, the tax convention would promote closer economic cooperation between Australia and Iceland by reducing tax barriers to investment and decreasing the cost of Australian businesses accessing Icelandic capital and technology. The committee welcomes the exemption allowing the treaty partner to exempt income earned by eligible Australian superannuation funds from taxation, only the third such agreement. Overall, we support the ratification of this treaty.

The second matter dealt with in this report is the Convention on the Protection of the Underwater Cultural Heritage, or UCH. UCH in Australia is derived from Aboriginal and Torres Strait Islander peoples, as well as our military and colonial history, including shipwrecks, sunken aircraft and so on. These sites are important to our national identity, our history and the education of future generations.

Australia has already been a world leader in this area, with the Underwater Cultural Heritage Act 2018, implemented by the previous government. Submitters noted that Australia is one of few countries in the world that actively manage artefacts in public possession that were removed from shipwreck sites prior to that protection.

It is important to note that the convention will respect human remains in maritime waters, particularly in cases like World War II shipwrecks in the South China Sea, where ships contain the remains of around 4,500 Australian, British, American, Dutch and Japanese servicemen. These sites will eventually fall under the protections of the convention.

Ratification of this treaty will allow us to be a regional leader, with the Asia-Pacific being the least represented region out of the 72 states parties to the convention. It has also been noted that it would, potentially, provide greater protection for Aboriginal and Torres Strait Islander UCH, as the state legislation will need to be harmonised through the implementation process. This is a positive move, and we are happy to support the binding treaty action being taken.

Thank you to those who made submissions and gave evidence, and to committee members, including the chair and the secretariat, for their work on this report, which I commend to the House.

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