Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

by leave—I present a supplementary explanatory memorandum to the bill and move government amendments (1) to (6):

(1)    Clause 2, page 2 (table item 4), omit the table item, substitute:

4. Schedules 6 and 7	The day on which this Act receives the Royal Assent.
5. Schedule 8, Part 1	The day on which this Act receives the Royal Assent.
6. Schedule 8, Part 2	1 July 2012.	1 July 2012
7. Schedules 9 to 11	The day on which this Act receives the Royal Assent.

(2)    Page 20 (after line 12), at the end of the Bill, add:

Schedule 7—Superannuation lump sum paid to a member having a terminal medical condition

Part 1—Amendments

Income Tax Assessment Act 1997

1  Section 11-55 (table item headed “superannuation”)

After:

roll-over superannuation benefits ...........................

306-5

insert:

superannuation lump sum for recipient having terminal medical condition

303-10

2  At the end of Division 303

Add:

303-10  Superannuation lump sum member benefit paid to member having a terminal medical condition

        (1)    This section applies to a ^*superannuation member benefit that:

             (a)    is a ^*superannuation lump sum; and

             (b)    is:

                   (i)    paid from a ^*complying superannuation plan; or

                  (ii)    a ^*superannuation guarantee payment, a ^*small superannuation account payment, an ^*unclaimed money payment, a ^*superannuation co-contribution benefit payment or a ^*superannuation annuity payment.

        (2)    The lump sum is not assessable income and is not ^*exempt income if a ^*terminal medical condition exists in relation to you when you receive the lump sum or within 90 days after you receive it.

Note:   For a lump sum you receive in the 2007-08 financial year, the period of 90 days may be extended until 30 June 2008: see section 303-10 of the Income Tax (Transitional Provisions) Act 1997.

3  Subsection 995-1(1)

Insert:

terminal medical condition has the meaning given by the regulations.

Income Tax (Transitional Provisions) Act 1997

4  After Division 302

Insert:

Division 303—Superannuation benefits paid in special circumstances

Table of sections

303-10        Superannuation lump sum paid to member having a terminal medical condition

303-10  Superannuation lump sum member benefit paid to member having a terminal medical condition

        (1)    This section applies to a superannuation member benefit that you receive during the 2007-08 financial year and that:

             (a)    is a superannuation lump sum; and

             (b)    is:

                   (i)    paid from a complying superannuation plan; or

                  (ii)    a superannuation guarantee payment, a small superannuation account payment, an unclaimed money payment, a superannuation co-contribution benefit payment or a superannuation annuity payment.

        (2)    The lump sum is not assessable income and is not exempt income if a terminal medical condition exists in relation to you at a time in the period:

             (a)    starting when you receive the lump sum; and

             (b)    ending at the later of:

                   (i)    90 days after you receive it; and

                  (ii)    30 June 2008.

Part 2—Application

5  Application

The amendments made by this Schedule apply to payments made on or after 1 July 2007.

(3)    Page 20, at the end of the Bill (after proposed Schedule 7), add:

Schedule 8—Capital expenditure for the establishment of trees in carbon sink forests

Part 1—Income years 2007-08 to 2011-12

Income Tax Assessment Act 1997

1  Section 12-5 (table item headed “capital allowances”)

After:

telecommunications site access rights

Subdivision 40-B

insert:

trees in carbon sink forests

Subdivision 40-J

2  Section 12-5 (after table item headed “travel expenses”)

Insert:

trees in carbon sink forests
see capital allowances

3  Section 40-10 (at the end of the table)

Add:

2.4

Capital expenditure for establishing trees in carbon sink forests You can deduct amounts for capital expenditure for the establishment of trees in carbon sink forests.

Subdivision 40-J

4  Subsection 40-50(1)

Omit “or 40-G (about capital expenditure of primary producers and other landholders)”, substitute “, 40-G (about capital expenditure of primary producers and other landholders) or 40-J (about capital expenditure for the establishment of trees in carbon sink forests)”.

5  After subsection 40-630(2B)

Insert:

Exception: deduction available under Subdivision 40-J

      (2C)    You cannot deduct an amount under this Subdivision for capital expenditure if any entity can deduct an amount for that expenditure for any income year under Subdivision 40-J.

6  At the end of Division 40

Add:

Subdivision 40-J—Capital expenditure for the establishment of trees in carbon sink forests

Guide to Subdivision 40-J

You can deduct amounts for capital expenditure incurred for establishing trees that meet the requirements for constituting a carbon sink forest.

40-1000  What this Subdivision is about

Table of sections

Operative provisions

40-1005      Deduction for expenditure for establishing trees in carbon sink forests

40-1010      Expenditure for establishing trees in carbon sink forests

40-1015      Carbon sequestration by trees

40-1020      Certain expenditure disregarded

40-1025      Non-arm’s length transactions

Operative provisions

40-1005  Deduction for expenditure for establishing trees in carbon sink forests

        (1)    You can deduct an amount for an income year if:

             (a)    you incur capital expenditure that is covered under section 40-1010 in relation to particular trees established in the income year; and

             (b)    you satisfy a condition in subsection (5) for the trees when they are established.

        (2)    The amount of the deduction is the amount of the expenditure.

        (3)    You can deduct an amount for an income year if:

             (a)    you incur capital expenditure in the income year or an earlier income year for establishing particular trees; and

             (b)    that expenditure is not covered under section 40-1010 in relation to the trees, because some or all of the trees are established after the end of the income year; and

             (c)    the trees established after the end of the income year are established within 4 months after the end of the income year; and

             (d)    you could deduct the amount for the income year under subsection (1) in respect of the expenditure, assuming that, for the purposes of paragraphs 40-1010(1)(a) and (2)(a), the income year ended 4 months after it actually ended.

        (4)    If:

             (a)    you can deduct an amount for an income year under subsection (3) in relation to particular trees; and

             (b)    you incur capital expenditure in the next income year for establishing other trees;

in determining whether you can deduct an amount under subsection (1) for the next income year in respect of the other trees, for the purposes of paragraph 40-1010(2)(a), disregard the trees mentioned in paragraph (a).

        (5)    The conditions are as follows:

Conditions for deduction for establishing trees in carbon sink forest
Item	Condition
1	You own the trees and any holder of a lease, lesser interest or licence relating to the land occupied by the trees does not use the land for the primary and principal purpose of *carbon sequestration by the trees.
2	The trees occupy land you hold under a lease, or a *quasi-ownership right granted by an *exempt Australian government agency or an *exempt foreign government agency, and: (a)   the lease or quasi-ownership right enables you to use the land for the primary and principal purpose of *carbon sequestration by the trees; and (b)   any holder of a lesser interest or licence relating to the land does not use the land for the primary and principal purpose of carbon sequestration by the trees.
	You: (a)   hold a licence relating to the land occupied by the trees; and (b)   use the land for the primary and principal purpose of *carbon sequestration by the trees, as a result of holding the licence.

40-1010  Expenditure for establishing trees in carbon sink forests

        (1)    Expenditure is covered under this section in relation to particular trees if:

             (a)    the trees are established in an income year; and

             (b)    you incur the expenditure in the income year or an earlier income year for establishing the trees; and

             (c)    you are carrying on a ^*business in the income year; and

             (d)    your primary and principal purpose for establishing the trees is ^*carbon sequestration by the trees (see section 40-1015); and

             (e)    your purposes for establishing the trees do not include any of the following:

                   (i)    felling the trees;

                  (ii)    using the trees for ^*commercial horticulture; and

              (f)    you do not incur the expenditure under:

                   (i)    a ^*managed investment scheme; or

                  (ii)    a ^*forestry managed investment scheme; and

             (g)    all of the conditions in subsection (2) are satisfied for the trees; and

             (h)    you give the Commissioner, in accordance with subsection (4), a statement that:

                   (i)    sets out all information necessary to determine whether all of the conditions in subsection (2) are satisfied for the trees; and

                  (ii)    is in the ^*approved form.

        (2)    The conditions are as follows:

             (a)    at the end of the income year, the trees occupy a continuous land area in Australia of 0.2 hectares or more;

             (b)    at the time the trees are established, it is more likely than not that they will:

                   (i)    attain a crown cover of 20% or more; and

                  (ii)    reach a height of at least 2 metres;

             (c)    on 1 January 1990, the area occupied by the trees was clear of other trees that:

                   (i)    attained, or were more likely than not to attain, a crown cover of 20% or more; and

                  (ii)    reached, or were more likely than not to reach, a height of at least 2 metres;

             (d)    the establishment of the trees meets the requirements of the guidelines mentioned in subsection (3).

        (3)    The ^*Climate Change Minister must, by legislative instrument, make guidelines about environmental and natural resource management in relation to the establishment of trees for the purposes of ^*carbon sequestration.

        (4)    The statement mentioned in paragraph (1)(h) is to be given to the Commissioner no later than:

             (a)    if you lodge your ^*income tax return for the income year within 5 months after the end of the income year—the day you lodge that income tax return; or

             (b)    otherwise—5 months after the end of the income year.

        (5)    However, expenditure is not covered under this section if the ^*Climate Change Secretary gives the Commissioner a notice under subsection (6) in relation to the trees.

        (6)    The ^*Climate Change Secretary must give the Commissioner a notice in writing under this subsection if the Climate Change Secretary is satisfied that one or more of the conditions in subsection (2) have not been satisfied for the trees.

        (7)    A person may apply to the ^*AAT for review of a decision (as defined in the Administrative Appeals Tribunal Act 1975) of the ^*Climate Change Secretary to give a notice under subsection (6).

        (8)    The Commissioner may give the ^*Climate Change Secretary a copy of the statement mentioned in paragraph (1)(h), for the purposes of subsections (5), (6) and (7).

40-1015  Carbon sequestration by trees

                 Carbon sequestration by trees means the process by which trees absorb carbon dioxide from the atmosphere.

40-1020  Certain expenditure disregarded

                 In working out a deduction under this Subdivision in relation to the establishment of trees, disregard expenditure incurred:

             (a)    in draining swamp or low-lying land; or

             (b)    in clearing land.

40-1025  Non-arm’s length transactions

                 If an entity incurred capital expenditure under an ^*arrangement and:

             (a)    there is at least one other party to the arrangement with whom the entity did not deal at ^*arm’s length; and

             (b)    apart from this section, the amount of the expenditure would be more than the ^*market value of what it was for;

the amount of expenditure taken into account under this Subdivision is that market value.

7  After subsection 70-120(5)

Insert:

No deduction for carbon sink forests

     (5A)    You cannot deduct under this section so much of an amount you paid or incurred as is attributable to the establishment of trees for which any entity has deducted, or can deduct, an amount for any income year under Subdivision 40-J.

8  Subsection 995-1(1)

Insert:

carbon sequestration has the meaning given by section 40-1015.

9  Subsection 995-1(1)

Insert:

Climate Change Minister means the Minister administering the National Greenhouse and Energy Reporting Act 2007.

10  Subsection 995-1(1)

Insert:

Climate Change Secretary means the Secretary of the Department that administers the National Greenhouse and Energy Reporting Act 2007.

11  Application

The amendments made by this Part of this Schedule apply to the 2007-08 income year and later income years.

Part 2—Income year 2012-13 and later income years

Income Tax Assessment Act 1997

12  Subsections 40-1005(1), (2), (3) and (4)

Repeal the subsections, substitute:

        (1)    You can deduct an amount for an income year if:

             (a)    you or another entity incurred capital expenditure that is covered under section 40-1010 in relation to particular trees; and

             (b)    you satisfy a condition in subsection (5) for the trees for at least part of the income year; and

             (c)    you are carrying on a ^*business in the income year; and

             (d)    you use the land occupied by the trees for the primary and principal purpose of ^*carbon sequestration by the trees (see section 40-1015); and

             (e)    your purposes in using the land occupied by the trees do not include any of the following:

                   (i)    felling the trees;

                  (ii)    using the trees for ^*commercial horticulture; and

              (f)    you do not use the land in connection with:

                   (i)    a ^*managed investment scheme; or

                  (ii)    a ^*forestry managed investment scheme.

        (2)    The amount of the deduction is worked out under this formula:

where:

establishment expenditure is the amount of expenditure mentioned in subsection (1).

write-off days in income year is the number of days in the income year:

             (a)    that occur within the period:

                   (i)    starting on the first day of the income year in which the trees are established; and

                  (ii)    ending 14 years and 105 days after that day; and

             (b)    on which you use the land occupied by the trees for the primary and principal purpose of ^*carbon sequestration by the trees; and

             (c)    on which you satisfy a condition in subsection (5) for the trees.

write-off rate is 7%.

        (3)    You cannot deduct more in total than the amount of capital expenditure incurred for establishing the trees up to the time at which they are established.

13  Paragraph 40-1010(1)(b)

After “you incur”, insert “or another entity incurs”.

14  Paragraph 40-1010(1)(c)

Omit “you are”, substitute “the entity incurring the expenditure (the establishing entity) is”.

15  Paragraph 40-1010(1)(d)

Omit “your”, substitute “the establishing entity’s”.

16  Paragraph 40-1010(1)(e)

Omit “your”, substitute “the establishing entity’s”.

17  Paragraph 40-1010(1)(f)

Omit “you do”, substitute “the establishing entity does”.

18  Paragraph 40-1010(1)(h)

Omit “you give”, substitute “the establishing entity gives”.

19  Paragraph 40-1010(4)(a)

Repeal the paragraph, substitute:

             (a)    if the establishing entity lodges its ^*income tax return for the income year within 5 months after the end of the income year—the day the establishing entity lodges that income tax return; or

20  At the end of Subdivision 40-J

Add:

40-1030  Extra deduction for destruction of trees in carbon sink forest

        (1)    You can deduct the amount worked out under subsection (2) for an income year if:

             (a)    you or another entity incurred capital expenditure that is covered under section 40-1010 in relation to particular trees; and

             (b)    you use the land occupied by the trees for the primary and principal purpose of ^*carbon sequestration by the trees; and

             (c)    the trees are destroyed during the income year; and

             (d)    you satisfy a condition in subsection 40-1005(5) for the trees just before they are destroyed.

        (2)    Work out the amount of the deduction as follows:

Method statement Step 1.    Work out the total of the amounts you could have deducted under this Subdivision in relation to the trees for the period: (a)   starting on the first day of the income year in which the trees are established; and (b)   ending when the trees were destroyed; assuming that, during that period, you satisfied a condition in the table in subsection 40-1005(5). Step 2.    Subtract from the expenditure that is covered under section 40-1010 in relation to the trees: (a)   the result from step 1; and (b)   any amount you received (under an insurance policy or otherwise) for the destruction. The remaining amount (if positive) is your deduction under subsection (1).

        (3)    This deduction is in addition to any deduction for the income year under section 40-1005.

40-1035  Getting information if you acquire a carbon sink forest

        (1)    This section applies if:

             (a)    you or another entity incurred capital expenditure; and

             (b)    the expenditure is covered under section 40-1010 in relation to particular trees; and

             (c)    you begin to satisfy a condition in the table in subsection 40-1005(5) for the trees.

 

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The opposition have no objection to these amendments. There is good reason why we need to pass these measures quickly. I do note that all of the measures are coalition policy, either introduced or announced by the previous coalition government, with the exception of the tax deductibility for political donations. I just might say on that matter that the opposition are very, very happy to have a debate about the funding of political parties in Australia. I think it is a very important debate. What we do object to is this cynical exercise of including within a tax bill a measure that should appropriately be referred to the Joint Standing Committee on Electoral Matters, where these matters are traditionally debated at the conclusion of any election in Australia. I think it is a good indication of the cynicism of this new government that they would include a measure like this within a tax bill with these much needed measures. As I have said, we are very happy to have a conversation about the funding of political parties in Australia. It is a terribly important discussion, but it is not one that we should have in relation to a tax laws amendment bill. I support what the government is doing in bringing these measures forward. This has the support of the opposition.

Question agreed to.

Bill, as amended, agreed to.