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

I move:

That the amendments be agreed to.

The government reluctantly accepts the changes made to the Tax Laws Amendment (2008 Measures No. 4) Bill 2008 by the Senate. These amendments remove schedule 2 of the bill, which contains the family trust changes. The government is only agreeing to these changes because it is important that the amendments in schedule 1 of the bill, which apply from 1 July 2007, receive royal assent. This will provide certainty to policyholders of health insurers that have demutualised. The family trust changes were an election commitment, and I note that the Senate Standing Committee on Economics inquiry into the Tax Laws Amendment (2008 Measures No. 4) Bill recommended that the bill be passed.

The family trust changes would have addressed the concern that the current definition of family, and the ability of family trusts to make one-off variations to their test individuals, provides significant scope for family trusts to transfer the benefits of tax losses to future generations. These changes would have reduced the scope for family trusts to be used to lower income tax by utilising losses, delivering on the government’s commitment to disciplined budget management. The changes to family trusts were expected to provide savings of $19 million over four years but much more significant savings in the longer term.

We would have hoped that the new Leader of the Opposition would provide more economic responsibility than his predecessor, and we continue to have that hope. We expect that it may be forlorn; nonetheless, we continue to hope. This is another move by the opposition to block a savings measure, which underlines their complete lack of economic credibility.

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

The House should welcome the changes that have been made by the Senate to the Tax Laws Amendment (2008 Measures No. 4) Bill 2008. The Assistant Treasurer has just talked about the savings measures in the bill, but what he did not mention was the compliance costs that they would have imposed on the Australian community. The government has not been able to say what those compliance costs would be. Also, and I think very importantly, would those compliance costs, which would be pushed back onto the community, outweigh the savings benefits that the Assistant Treasurer has just outlined?

During this debate, no-one in the government has seriously defended these silly measures. It is probably one of the silliest tax measures that I have seen the government introduce into this House. The Senate changes are to be welcomed. The opposition supports the amendments as they have been placed before this House by the Senate.

Question agreed to.