Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

In speaking on this Tax Laws Amendment (2009 Measures No. 2) Bill 2009 I indicate that the opposition will be supporting it. There are eight schedules that deal with a range of technical and mechanical matters with respect to our tax laws. They were outlined in great detail by the Assistant Treasurer when this bill was introduced at the end of the last sitting, but I will run through them briefly. Schedule 1 amends a range of acts, including the Banking Act, the First Home Saver Accounts Act, the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997, to remove unintended tax implications that arise from a failed authorised deposit-taking institution to the relationship with APRA, the Australian Prudential Regulatory Authority, with respect to payments made under the Financial Claims Scheme. This schedule will ensure that the payments made under the scheme are treated as if they were made by the failed authorised deposit-taking institution. It also prevents tax implications from arising from farm management deposit account holders who had their account with a failed approved deposit institution when they started—a new account with a separate ADI. For individuals with retirement savings accounts with a failed ADI, this schedule will ensure that the payments made by APRA into a new retirement savings account in a separate ADI will have the same tax treatment as a rollover superannuation benefit. Similarly, a payment made by APRA into a new first home savers account will be treated as a transfer from one to another. This will prevent individuals from claiming the government contribution twice. The schedule also deals with, and introduces, a range of reporting and withholding requirements for APRA in the case where an ADI fails and payments must be made under that scheme.

Schedule 2 of the bill makes some amendments to the Income Tax Assessment Act 1997 and to some related legislation to provide greater accessibility to small business capital gains tax concessions for owners of capital gains assets used under a passive asset structure. This was introduced by the previous coalition government in 2007. At the time, changes were also made to the small business entity test and the net asset value test. Businesses in situations where an entity owns a capital gains tax asset but another related entity uses that asset in carrying on a business will now have greater access to those capital gains tax concessions. Schedule 3 proposes to clarify the law with respect to capital gains tax. Again, it does so by amending the Income Tax Assessment Act 1997. This is a highly technical area, as the Assistant Treasurer outlined in his second reading speech. This schedule is seeking to remove beyond any doubt what could be a technical interpretation of the law that might in a worst case scenario—the Assistant Treasurer and I would probably agree that it would be a remote scenario, but nonetheless a highly technical interpretation—see taxpayers having a CGT liability on receiving a tax offset and the like. This schedule simply puts beyond any doubt that unintended consequence occurring.

Schedule 4 provides a refundable tax offset for certain projects approved under the National Urban Water and Desalination Plan. The offsets are to be available from 2008-09 through to 2012-13 by issuing certificates. There is a range of detail about that within the bill. Schedule 5, which is a common schedule in our tax laws amendment bills, updates the deductible gifts recipient list, and it does that in two ways: by adding four new entities and by renewing three existing entities that the Assistant Treasurer outlined in his speech. Schedule 6 will expand the operation of the Australian Business Register, which was established by the former coalition government to reduce administrative costs for small businesses dealing with government agencies with the intent of reducing the number of times businesses have to give identical information to different agencies. This schedule will expand the operation of the register by using certain contact information provided by business to a government agency for updating information at all the other related government agencies. In doing so, it will allow the business register to act as a multi-agency registration authority.

Schedule 7 removes the requirement for a business to be a member of the Greenhouse Challenge Plus program to be eligible for more than $3 million in fuel tax credits. The requirement was there in the past. However, because the program ceases operation on 30 June this year it would have meant that businesses would not have been able to claim their fuel tax credits. This simply ensures that unintended consequence does not occur. The last schedule, schedule 8, will provide a tax exemption for payments made up under the clean-up and restoration grants scheme. Back in February, in the wake of the tragic bushfires in my home state of Victoria, the federal government and the Victorian state government announced a $51 million assistance package to assist small business and primary producers affected by the bushfires. I note that one of the ministers responsible for that, the Minister for Agriculture, Fisheries and Forestry, is here in the chamber. That has been a good package. It includes $5,000 clean-up and restoration grants, which can increase to up to $25,000 if the damage is significant. What this schedule does, the minister will be relieved to know, is ensure that these grants are not treated as assessable income. That exemption will apply from 2008-09 through the 2010 income year.

As I said at the outset, this tax law amendment bill deals with a range of necessary and technical tax matters to ensure the correct operation of the law. It went to the Senate Standing Committee on Economics. The committee reported on 7 May. It recommended that the bill be passed. The opposition is supporting this bill and I commend it to the House.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

I thank the House for this opportunity to record some of my views on the Tax Laws Amendment (2009 Measures No. 2) Bill 2009. Firstly, it is a bill designed to either amend, fix or otherwise bring into order a range of tax matters and issues in order to provide for a more robust, better, more efficient and streamlined taxation system. That is at the core of not only what this government has been about in coming to government but also what we philosophically believe in terms of providing a system not only for ordinary PAYG taxpayers but also for business—small, medium and large—to provide them with the tools that they need to get on with the job of business. As such, this tax laws amendment bill works to improve the current system. Secondly, it deals with a number of very important matters that are specific to recent tragedies of the bushfires in Victoria and other places. I acknowledge the comments by previous speakers in relation to that.

It is a fairly straightforward bill. It has a number of schedules, and I will work through those systematically. Schedule 1 outlines the financial claim schemes that were enacted in October 2008. The introduction of the legislation for these schemes was brought forward because of the global financial crisis, so it was not able to include the consequential taxation amendments at that particular point. The present package contains those taxation amendments. In broad terms, it aims to provide the same taxation treatment for payments that APRA makes under the financial claim schemes as would have applied to payments made by the failed financial institution or insurance company.

It also deals with capital gains and losses specifically in relation to rights that were created by the financial claim schemes which are ignored. Payments in relation to a farm management deposit, for example, or a retirement savings account or a first home saver account will generally have to be made into another account of the same type. That poses some challenges in terms of reordering that. What this does is ensure that the normal restrictions on withdrawing amounts from those particular accounts are maintained.

It is important for the integrity of the tax system, for the policies of this government and for taxpayers generally that taxpayer money being placed into these types of schemes and accounts be properly accounted for and that the restrictions that normally apply are applied right across the board. This ensures that the normal restrictions on withdrawing amounts are properly maintained. Those payments will generally be treated as a rollover from one account to another account to avoid them being treated as if they were a new account being opened, which they are not. APRA will be subject to the same obligations to withhold amounts from payments and to the same reporting obligations in relation to amounts withheld or rolled over that the failed institution would have been. That will provide the necessary integrity and clarity for people who find themselves covered by these changes.

Schedule 2 increases the access for small business to capital gains tax concessions. It deals with not only tax concessions on capital gains but also losses. This is for taxpayers who own a capital gains tax asset which is used in a business but specifically by an affiliate or an entity connected with that taxpayer and for partners owning a capital gains tax asset which is used in the partnership business. This will have effect from the 2007-08 income year. It is important to recognise that, for many businesses and partnerships, assets are owned by different entities within that business or across partnerships and they should have the same capital gains tax concessions as other parties. It is a fairly sensible and straightforward change that needs to be made, and we are making it.

I note that these amendments have been actively sought by industry as part of our process of consultation with industry and with the sector. We need to make sure that we reduce the amount of red tape, compliance burdens and costs on small business and so we need to move quickly to make these changes and bring about a fairer, better and more efficient system of taxation.

The amendments under schedule 2 also make a number of changes to clarify and refine elements of the small business capital gains tax concessions so they operate in a flexible manner, as is the proper intent. Industry stakeholders did express support for the measures during the consultation process; in fact, a number of stakeholders suggested additional changes to the scope and application of the small business capital gains tax concessions. Although they were not adopted, as they were beyond the scope of the current amendments, they were certainly listened to and formed part of the decision-making process. Another reason those changes were not adopted is that we believed they would lead to more complex provisions or greater compliance costs for taxpayers. Overall, schedule 2 brings about some necessary changes. (Quorum formed) Mr Deputy Speaker Scott, this is an outrageous abuse of the democratic process in this place—to gag a speaker on such a controversial piece of legislation such as the Tax Laws Amendment (2009 Measures No. 2) Bill 2009! I note for the record that we have got only two members of the opposition in here, because none of the others can be bothered to come in and hear about a decent piece of legislation that deals with a whole range of tax measures that their mob over there had 12 years to fix. They could not be bothered, in 12 years, to do anything—

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order, which is that the member is required to speak to the legislation before the parliament. You should bring him back to the legislation.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I will determine that. The member for Herbert has no point of order.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

Mr Melham interjecting

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Banks! The member for Oxley has the call. Could those on my right either resume their seats and remain silent or leave the chamber.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker, for drawing to the attention of the member for Herbert the fact that his point of order was out of order. That is exactly what it was, in terms of trying to gag the debate on this essential bit of legislation.

I would note that taxation is one of the most important and critical parts of the Australian economic system that we have in this country and something that this government has been committed to since winning the election: actually dealing with it properly, after 12 years of the mob on the other side sitting on their hands. I am sure their hands are so numb they can barely get up and flick through their standing orders to find a new point of order on which they could possibly sit me down and not have me speak on this bill. But I turn back—

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

How’s that franchising report going, Bernie?

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

The franchising report is going very, very well, in fact. I turn back to why this bill in particular and these schedules are very much part of modernising the Australian tax system and ensure that we provide small business—while the Liberal and National parties may think that this is their constituency, it always seems to me that it is Labor governments who make the hard decisions and make the necessary changes for them—with a more efficient method of taxation, a means by which to reduce red tape and bureaucracy and, in the end, a means through the tax system to ensure that they can get on with their business of providing services and products to the Australian community and economy, rather than being burdened or saddled with masses of legislation. I am sure the two members of the opposition sitting at the table would understand that, given that during their reign of power there was a doubling and tripling of the amount of taxation laws, creating this massive burden and impost on ordinary businesspeople trying to go about their daily work.

In relation to tax benefits and capital gains tax, our amendments under schedule 3 provide a general exemption from capital gains tax for capital gains or capital losses arising from a right or entitlement to a tax offset, deduction or similar benefit. That is pretty important, given the current environment, and adds to the amount of incentives that this government has provided to small-business operators and owners, medium sized enterprises and large businesses to ensure that they can properly deal with the economic circumstances that have been thrust on us by the global financial crisis.

The amendment puts beyond doubt that a capital gain or capital loss would not arise for taxpayers who have a right to receive a tax offset, a deduction or any other tax benefit on the satisfaction of that right. Without going into the great list of incentives, offsets and deductions that we have put in place, this is an important measure to ensure that the tax system works hand-in-hand with the community and hand-in-hand with business operators.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

You should go through the list. It wouldn’t take long. There are only one or two.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

I can hear a faint, distant voice from a member of the opposition. It is only faint because on these matters they are very quiet; they just peep up a little bit in the background. In the end, it is not so much that you should be measured in this place by what you say; you should be measured by what to do. I am very proud of the legacy that this government will leave, whether it is infrastructure development, boosting the economy, providing tax offsets and improvements to the tax system or greater efficiencies. Beyond doubt, the government’s economic stimulus packages have made a great contribution to Australia, ensuring not only that we survive the economic crisis brought on by global circumstances but also that we thrive and that people get on with their day-to-day lives and their business affairs.

Industry stakeholders particularly have expressed support for the measures we are putting forward and we thank them for their support—the Australian Industry Group, other business organisations, independent economists and others. They support the measures because they are really good measures, designed to be in the national interest. We hear all sorts of abuse from the other side when particular groups are mentioned, but they cannot have it both ways. When it suits you, you cannot be patting them on the back and when they say something that may not suit you, you cannot say that their voice is irrelevant or has no credibility. That is a real issue. I do not think the opposition understands that. They have some real issues with what they see as a voice out in the community, a balanced and fair interpretation or analysis of the things we are putting forward.

Having been an opposition member in this place for a very long time, almost 10 years, causes me to reflect on the things I could have done had I been in government for that time. The greatest lost opportunity which sticks in my mind—the things you can never really reverse, never really undo, the things you lament when you talk to your communities—is the lack of investment in infrastructure. In the good days, we used to come into this place and speak about the rivers of gold, the unexpected revenue and the windfalls that fell into the previous government’s lap. When you think about the opportunities lost—

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. In accordance with standing order 76, I ask you to bring the member back to the question being considered in this debate.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I thank the member for Herbert for his advice. I am listening to the member for Oxley. I remind him of the bill before the House, the Tax Laws Amendment (2009 Measures No. 2) Bill 2009.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. The only issue as to relevance is the opposition’s relevance deprivation syndrome. The opposition are completely irrelevant when it comes to tax law, efficiencies for small business and other things, which is exactly what this bill is about. I am sure if anyone is listening or perhaps will read this later—if I am so lucky—they will think I am being completely relevant.

The changes we are bringing about in this bill will provide a better tax system, doing the things that the previous government either were not interested in or did not have the fortitude to do. That reminds me of all the lost opportunities, the things we could have done in those 10 years in opposition by stimulating the economy and providing a legacy of infrastructure—ports, rail, road, things which make a difference to communities, regardless of who represents them.

We have been left with a great task, a task which we willingly face with great responsibility. My community shares the Ipswich Motorway—which we have heard a lot about—with neighbouring electorates. For all of the transport companies and small businesses using that lifeblood of a highway as a link between workplaces and homes, or business-to-business interactions, having to wait more than a decade for action to be taken and having to wait for a change of government has had a huge cost. It would be an interesting exercise to see opportunity cost, the cost to the economy today and how better placed we would have been during those three revenue rich years of the previous government—(Time expired)

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

The member for Oxley remarked about people listening to this debate. Mr Deputy Speaker, if they were, I think they changed frequencies a long time ago. That would have to be one of the driest contributions I have heard about a bill that is so important not only for a number of aspects of the Australian economy but in particular for small business, which is my focus. There are many aspects and schedules to the Tax Laws Amendment (2009 Measures No. 2) Bill 2009 and I intend to confine my comments to those aspects that deal with small business and in particular the fact that this bill will make a number of concessions to ensure that there is some assistance provided to small business.

If you were to listen to those opposite you would believe that in some way this bill is the salvation of small business in Australia. In large part that is because this government is so completely derelict when it comes to support of Australia’s 2.4 million small businesses that employ about 3.8 million Australians. For the vast majority of those opposite the closest contact they have with small business in this country is when they walk into one to buy a coffee. That is the most connection that the vast majority of government members have to small businesses in this country. That is the reason why I am pleased to talk about some of the things that the coalition did when we were in government and to outline some of our proposals about what we would do today if we were in government. In large part it stands as a contribution in response to the member for Oxley, who suggested that in some way nothing had been done for 12 years. He could not be more wrong.

The fact is that the coalition does understand small business. Small business is the constituency of the coalition. The coalition understands small business—unlike those trade union hacks that sit on the government benches. There are a whole lot of them in the chamber now—and they are putting their hands up because they know. They went from university straight into the trade unions and from the trade unions straight into this chamber. Their knowledge of small business is nil. You say to one of them, ‘What can you tell me about PAYG instalments?’ and they look blankly back at you. They have got no idea what that means for small business. So no wonder that the member for Oxley stands up in this chamber, chest puffed out, claiming that in some way this bill is going to do so much for small business and highlights, as one of the great accomplishments of the Rudd Labor government, assistance to small business in this country. No wonder that is the case because, really, the cupboard is bare when it comes to small business policy.

We have seen, effectively, two announcements by the Rudd Labor government for the small business sector, the backbone of the Australian economy. There are 3.8 million Australians employed in the small business sector and there have been, effectively, two announcements. The first was the announcement with respect to PAYG instalment payments, which saw them reduced. The reason the Rudd Labor government did that was they copied the coalition’s policy. I put out a press release on this about a month or two prior to the announcement by the Prime Minister and the small business minister. The coalition was out there leading the way on PAYG changes to help small business at this time and, lo and behold, the government said, ‘Gee, that’s not a bad idea.’ You could have seen Kevin Rudd and Dr Emerson, the member for Rankin, sitting down and saying, ‘What are we going to do on small business? I have got no idea. We do not know what to do. What does the coalition propose? Well, Steve Ciobo on behalf of the coalition has put out a press release—let’s copy that.’ So that is what the Labor Party did with their first announcement.

The second announcement was put out by the Labor Party about their tax-effective investment allowance, and we have seen the Labor Party crowing about this proposal outlined in the budget. This was going to do so much to help Australian small businesses. That measure, like the one that is before the House today, will assist some small businesses—and there is no doubt about it; I am not going to pretend it does not. But the reality is that for the 93 per cent of Australian small businesses that are under cash flow stress, that announcement does nothing. And the reason that the announcement does nothing—and this is what Labor fails to understand—is you have got to have a dollar to spend a dollar. There is no point providing a tax-effective investment allowance increase to 50 per cent to encourage small businesses to spend if they do not have a dollar to spend or if they do not have access to credit. Labor just does not get it.

Laurie Ferguson (Reid, Australian Labor Party, Parliamentary Secretary for Multicultural Affairs and Settlement Services) Share this | Link to this | Hansard source

Mr Laurie Ferguson interjecting

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

So I am very pleased to talk about our track record. I am pleased to talk about our six-point small business action plan which would ease cash flow, make it cheaper to employ people, and keep people employed in Australia’s small businesses. Particularly though, because I gave a commitment to the minister and the parliamentary secretary at the table that I would only go for about five or six minutes, I will confine my comments now to honour my commitment. So I will specifically talk about the TLAB No. 2 Bill and in particular I will make a couple of comments with respect to schedule 2.

Laurie Ferguson (Reid, Australian Labor Party, Parliamentary Secretary for Multicultural Affairs and Settlement Services) Share this | Link to this | Hansard source

Mr Laurie Ferguson interjecting

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

Schedule 2 of the bill expands the scope of the concessions for those assets which are used under a passive assets structure. The amendments allow a small business only a capital gains tax asset that is used in a business by an affiliate, or an entity associated with the small business, to access the small business capital gains tax concessions. The amendments also allow partners who own a capital gains tax asset that is used in a partnership business to access the small business capital gains tax concessions through the $2 million aggregated turnover test where the capital gains tax asset is not an asset of the partnership. The coalition welcomes these amendments. Indeed, we have advocated for the small business capital gains tax concessions to be expanded further, and that of course was first outlined by the Leader of the Opposition, Dr Nelson, in his budget-in-reply a little over a year ago, and this would occur of course under an elected Turnbull government. It will further expand the small business capital gains tax concessions by reducing the active asset test from 15 years down to five years, giving small businesses access to the concessions.

So I put that on the table as something else that the government should copy from the coalition. If you copy it from the coalition you will receive praise from the small business sector because it is something that the small business sector would like to see instituted. The commitment was made by the Leader of the Opposition in the 2008 budget-in-reply and the government is still to respond to our proposal. Only a Turnbull coalition government would provide further relief for retiring small business owners through the small business capital gains tax concessions.

Finally, I have heard the interjections from the Parliamentary Secretary for Multicultural Affairs and Settlement Services, who is sitting opposite, that I go on longer. I will just indulge the House and myself for one brief moment to reflect on the comments made by the member for Oxley when he spoke about having spent 10 years in opposition focusing on the things that he was lamenting, the things that cannot be undone, and saying that they were his inspiration for policy.

If there is one issue that the member for Oxley should be lamenting, if there is one example of a thing that cannot be undone, I would say to the government that it is their $300 billion of debt. That is something that you should lament—$300 billion of debt that the small business men and women of Australia will have to pay for through higher interest rates and higher taxes. That is what cannot be undone. That is what the government should be lamenting, because of their $124 billion splurge of new spending. Ten million dollars an hour since the Rudd Labor government were elected is what the government should be lamenting. It will be, unfortunately, on the shoulders of Australia’s 2.4 million small business men and women to be paid off. The Rudd Labor government have accrued $9,000 of debt for every single man, woman and child in the 18 months since they were elected. That is the great travesty of this reckless government, who have lost control of the public finances and are crippling confidence in Australia’s small business sector.

Small business men and women say to me that the best thing that this country could ever see would be for this reckless-spending government to be voted out of office and for the coalition to be re-elected. It took us nearly 12 years to repay Labor’s $96 billion worth of debt. It is going to take us who knows how many decades to repay Labor’s $300 billion worth of debt, which they have managed to rack up in a relatively short 18 months. Having said all of that, I will honour my commitment to the parliamentary secretary at the table and confine my remarks to that.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I had no idea we were discussing debt today. I thought we were discussing the Tax Laws Amendment (2009 Measures No. 2) Bill 2009. The member for Moncrieff did not tell us what their debt policy is or what their debt position is.

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

Less than yours.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

How much less?

Steven Ciobo (Moncrieff, Liberal Party, Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts) Share this | Link to this | Hansard source

A lot less.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

How much less? We will never hear a figure.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

Order! Members will not engage in a debate across the table.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

The truth is that the opposition may well attempt to balance the budget but they will raise taxes and slash services to do it. That is what their real policy is and I have spoken about that in this House in other debates.

I should begin my remarks on this bill by commending the Assistant Treasurer on his diligence in preparing these measures included in the bill today. He has made an extensive effort to update several important technical and administrative procedures in our tax law. These amendments are a bit dry but they have very real impacts on the lives of families and workers throughout Australia.

I support all the measures in the bill but I want to focus on four matters within it: firstly, the review of the tax consequences for claimants under the Financial Claims Scheme; secondly, the provisions for tax offsets for national urban water projects; thirdly, the update of fuel tax credit rules; and, finally, support for those affected by the devastating Victorian bushfires.

The first schedule of this bill reflects the government’s continuing commitment to making sure that the impacts of the global financial crisis and the recession do not punish Australian families. One measure that was introduced last October to protect the savings and the financial position of Australians was the Financial Claims Scheme. That gave the Australian Prudential Regulation Authority, APRA, the power to make payments to account holders in failed financial institutions. The establishment of the FCS followed consideration by the Council of Financial Regulators dating back to 2005. It reflects the recommendations made by the HIH Royal Commission in 2003 and by the Financial Stability Forum early this year, which involved the G20.

Obviously this measure was implemented far more quickly than one would have originally planned because of the onset of the global recession. It was an early sign of the government’s commitment to Australians and to the stability of their financial institutions. It is an important program because early access to payments and the security of payments is important to ensure that Australian families, if they are to be affected by the liquidation of an institution, can continue to meet their own day-to-day costs.

This bill ensures that payments made under the scheme do not attract an inappropriate tax liability. Basically it ensures that the taxation treatment of payments from APRA is equivalent to the treatment of payments made by the institution itself. The specific amendments cover capital gains tax, farm management deposits, retirement savings accounts and first home saver accounts. Due to these amendments, capital gains and losses in relation to what is created by the FCS will not have any effect, which is a common-sense proposal. We would not want to lump people with a tax liability that would not have occurred if a financial institution had not collapsed. Similarly, payments made to farm management deposits, retirement savings accounts and first home saver accounts will have to be made into an account of another type, but those transfers will be treated as a rollover and that, again, stops unnecessary or unfair tax consequences from arising. It is the only fair way to deal with situations that may come up in the future. These administrative amendments are common sense. They save families the potential of an unfair tax liability and they help to provide stability to our financial system.

This bill also delivers on important commitments providing refundable tax offsets for projects under the government’s National Urban Water and Desalination Plan. Obviously that is a key plank for the government’s Water for the Future policy. It supports initiatives that deliver a diverse range of water sources for community and for industry, particularly focusing on the efficient use of water.

I have seen firsthand the result that communities can get from projects to save water. In my own electorate of Wakefield, both the Salisbury City Council and the City of Playford Council are world leaders in the reuse of stormwater. At the moment Playford council are constructing the Stebonheath Flow Control Park, which will return about 80 to 120 megalitres into the aquifer which is later reused in parks and for industry. To give you an idea of the effect this has: recently we were at the Stebonheath Flow Control Park to raise an extra $200,000 for playground equipment—part of this government’s election commitments being delivered on the ground. While we were there, the wetlands were being constructed. We had had about 10 millilitres of rain the night before and it was already beginning to be collected in that park—so much so that they were digging the overflow channel just in case they got a bit more rain. Rain, of course, has been a rare thing in Adelaide over the last four years or so.

This government is committed to further projects to provide water security in Adelaide. Under amendments in this bill, eligible projects will be able to receive an assistance rate of 10 per cent of the eligible capital costs up to $100 million per project. That is a very real incentive. It is a measure of this government’s commitment to ensuring the water security of places like Adelaide and across the country. This is in addition to funding of some $228 million that has been made available in the budget to build a desalinisation plant and so double capacity in Adelaide. This is very important given that Adelaide relies almost exclusively on the Murray-Darling Basin for its drinking water. In Adelaide, there is always a bit of finger-pointing at people’s water use upriver, but I think that we do have to look at our own water use and make savings and provision so that we are not relying on that river system.

The bill also reforms the fuel tax credit scheme. (Quorum formed) We can tell that the tactics of the opposition today are just going to be to obstruct the business of the House in order to create chaos in this great institution of democracy. I think it is quite unfair to the government and to the Australian people. Nevertheless, I will continue to remark on the bill. As I was saying, since we are attempting to cut emissions and decarbonise our economy, it made sense in the past to give an incentive for heavy fuel users to monitor and reduce their fossil fuel consumption. Under the current system, those able to claim a fuel tax credit of more than $3 million have to be members of the Greenhouse Challenge Plus program. As this government has adopted a more comprehensive approach to climate change through its Carbon Pollution Reduction Scheme, programs like Greenhouse Challenge Plus have become unnecessary. They are slowly winding up because the CPRS will achieve the same policy outcome but far more effectively.

There are many businesses in Wakefield that are aware of the amendments in schedule 7 of this bill. If they are not adopted, the greenhouse challenge criteria will remain, even if the program does not. As a result, large users of the fuel tax credit scheme will lose the benefit. That would be at odds with the policy intent of the government. Obviously, we want to pass this measure. It is good that the opposition are supporting the bill, despite their antics with quorum calls and their disruption of this House. But every moment they delay these important and sensible measures potentially leaves small and medium businesses and civil contractors out of pocket. I know from my own meetings with the Civil Contractors Federation that the fuel credit system is critical to a functional and profitable civil construction industry, so I would like to see the bill passed quickly and without unnecessary delay.

Finally, this bill delivers important exemptions from the tax on clean-up and restoration grants for small businesses and primary producers affected by the Victorian bushfires. The bushfires were a great national tragedy. Many Australians around the country live with the threat of bushfire. Obviously, we all want to sincerely support anybody affected by that devastating event. People came together right across my own electorate—particularly in the country areas, where they have experienced bushfire themselves—to volunteer, to raise money and to offer support, moral and financial. Obviously we have to acknowledge that compassion and support. There was a spontaneous outpouring right across the country for those affected by both the floods and bushfires in Victoria and the floods in Queensland. I made some donations to a fundraiser in my home town of Kapunda. I know the Mallala community raised $1,400, and literally thousands of people attended a fundraiser at Clare Oval to raise $15,000 for that worthy cause. So many people across the country, certainly across my electorate, are putting their hands in their pockets and their hands on their hearts to support people affected by that devastating tragedy.

It is in this spirit that the bill recognises the hardship suffered by so many businesses and primary producers affected by the fire. The assistance package will assist individual businesses to recommence trading as soon as possible. That is a key part of rebuilding and getting things back to normal. These people should not have to worry about tax liabilities arising from the assistance that they have been given. So it is a really important part of the bill—again, a small administrative arrangement which has a huge effect. I commend the bill to the House.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Tax Laws Amendment (2009 Measures No. 2) Bill 2009. Nothing frustrates business more than the oddities, irregularities and eccentricities of the tax system. Dealing with and being involved in business every day is a frustrating thing from time to time. Getting those letters from the tax office and thinking about inappropriate and unintended consequences to actions you undertake with respect to rolling over assets or employing new staff is extremely frustrating for business in the circumstances.

We know, at this really difficult time, we have lost across the forward estimates $210 billion in tax revenue. One in every five dollars that the government gets now and is going to get into the future has been lost. We know a lot of that is caused by the global financial crisis and what we have seen. We know also that our unemployment rate is going to rise. That means that people are going to be out of work and they will not be paying tax. Businesses may fail, and the consequence of that will be a reduction not just in capital gains tax and fringe benefits tax but also in corporate tax. The consequence of that is that our revenue is going to suffer.

We know at this time that our businesses are going to do it tough, and some of them already are. We see the consequences of the global recession every day in our electorates. Family, friends and constituents are losing jobs. If we can support small business, that is a wonderful thing and it is necessary for the benefit of our economy and those whom we represent here in parliament. There are about 1.9 million small businesses in this country, employing over four million people. They are the heart and soul, the tissue and the lungs, and the backbone of our economy.

In small rural communities, in regional areas, in country towns in Queensland, small business is the lifeblood of employment. There are often no multinational companies but there are bakers, butchers, local real-estate agents and used car dealers. There are millions of people in small business in rural and regional Queensland, in cities like Townsville and Ipswich, and Rockhampton and Mackay, small businesses flourish. It is not the headquarters of multinational corporations but small businesses that are there, present and operating each and every day, and they are going to do it tough.

This legislation contains a suite of changes to assist small business. Some of them relate to charity. Some of them relate to bushfire victims in this wonderful and terrifying country—we have seen that in Queensland with floods around Ipswich, Caboolture and Brisbane itself. We have seen it in northern New South Wales. We have seen it up north, in Far North Queensland; we have seen about 62 per cent of Queensland under flood. We live in a wonderful country but Mother Nature treats us quite harshly. In one of the schedules, there are changes to assist bushfire victims in Victoria. But there are also important measures in the tax laws amendment which will mean that inappropriate tax consequences will not be thrust upon business.

We have done many things to stimulate the economy and help small business. For example, one of the many things which many people in my electorate have talked about in terms of tax changes to help small business has been the 30 per cent small business tax break—now increased to 50 per cent in circumstances where small businesses acquire eligible assets costing more than $1,000 between 13 December 2008 and 31 December 2009 and they are installed, operational and ready to use by 31 December 2010. That is going to benefit many small businesses. The increase in the R&D tax credit is also going to help small business. One of the pieces of legislation we debated last night, the PAYG cash flow relief, will also help small business, with $720 million in relief poured into small businesses. That will help over a million small businesses to pay their quarterly PAYG instalments in a previous year, by adjusting the GDP adjustment factor from nine per cent to two per cent.

And of course the amendments we are talking about here by way of schedule will help small businesses as well. I will go through those in detail. Schedule 1 will make a difference because we acted in an early and decisive way in response to the challenges we faced economically with a Financial Claims Scheme last year. Under that scheme APRA can make payments to account holders in failed institutions and to claimants under general insurance policies which deal with failed insurance companies. That was about those in farming communities with farm management deposits, those with retirement savings accounts, those with first home saver accounts and those with a variety of other forms of accounts who would otherwise have lost out on being supported in the circumstances. It was about sustaining the economy, sustaining our constituents and sustaining the lifeblood of small and regional communities.

But it is important that we do not inadvertently trigger capital gains tax consequences for those schemes. It is important that, when we do this, we ensure that, for example in relation to farm management deposits, a transfer for tax purposes is not a withdrawal. It should not trigger a tax consequence. In relation to retirement savings accounts, it should be considered a rollover and not a withdrawal in the circumstances. The same thing applies to first home saver accounts. They should not be adversely affected. Because it is real people, people in our electorates, who are involved in these types of deposit accounts—people who have done this thinking about their security for the future, thinking about the security of their farming businesses—who would suffer as a result.

The Financial Claims Scheme, as I said, was brought in in October 2008. It was brought forward to deal with the consequences of the global financial crisis. But we did not want to have it installed in such a way that it inadvertently hurt small business. So, in those circumstances, the amendments in relation to schedule 1 will make a big difference in the lives of small business in my community in Blair, where we have many small businesses, not just in Ipswich but also in those small rural communities like Kalbar, Boonah, Laidley, Gatton, Withcott and other places.

Under schedule 2 we see some changes that increase access to small business CGT concessions for taxpayers owning a CGT asset used in a business by an affiliate or entity connected with a taxpayer and for partners owning a CGT asset used in the business. That will make a big difference in the lives of many people. The amendments here increase concessions for taxpayers owning a capital gains tax asset used in a business. That way those people, who are all involved in small business, do not have to pay increased tax in the circumstances, if they can allow their partner to make an asset for general use in the partnership to access the small business tax concession via a small business entity test. That is more appropriate and it lines up with the tax law in a more effective and efficient way. The current law means they have to claim the concession in a different manner, and that should not be the case.

The third schedule in relation to this matter, I think has some significant benefits. One of the things about being a lawyer is that you are always amused and bewildered by legislation that has unintended consequences. It does not matter which side of politics is in power, from time to time legislation is drafted that confuses people. It happens at a state level, a territory level and a federal level. There are some highly technical interpretations of law. You can measure the Income Tax Assessment Act by weight as opposed to any other measure. You could almost use it as a dumbbell, it is so large. It is extraordinary that in this country we have ended up with an Income Tax Assessment Act that means you have to have a doctorate of tax law to be able to interpret sections of it. It is one of the most confusing parts of law, not just for lawyers but also for accountants and for small businesses. It is possible to interpret our legislation in such a way that a right or entitlement to receiving a tax offset is considered a capital gains tax asset for tax purposes. That is simply ridiculous. Tax offsets are intended to help, not hinder, small business. Tax offsets are meant to be tax benefits for eligible taxpayers. They are not meant to potentially incur tax consequences of an adverse nature to taxpayers. The amendment here provide a general exemption from capital gains tax for capital gains or capital losses arising from a right or entitlement to a tax offset deduction or similar benefit. So it has some benefit as well.

Schedule 4 talks about amendments providing financial assistance. (Quorum formed) I am nearly finished. The member for Herbert could have waited a few more minutes. But I know that water is an issue in dealing with climate change. It is something the coalition really do not want to deal with too often. They prefer procrastination, idleness and inactivity in dealing with issues such as the CPRS because it is all too hard. The opposition are divided between the sceptics and the moderates, those who want to take action and those who want to simply do nothing. They just do not want to hear about it. Schedule 4 of this legislation deals with the National Urban Water and Desalination Plan. It relates to offsets and it makes significant improvements. The member for Wakefield has gone through these amendments in detail, but I just comment briefly that it forms part of our policy called Water for the Future and it will support activities, proposals and initiatives which will improve investment and increase the diversity of our water supply options—and that is important—to encourage industry and to encourage our community to save water and to use it more efficiently.

In Queensland, and particularly in South-East Queensland, we had our dam levels below 20 per cent for a long time. Thankfully, Mother Nature has looked upon us with kindness in the last few months and our dam levels in South-East Queensland are collectively up to about 70 per cent. That has good consequences for industry, small business and farming communities. I still think it is necessary in the circumstances for us to be vigilant and to have a national plan not just for local government and urban development but also for water management and usage. The use of water has become very elastic in South-East Queensland. People are used to meeting the challenge every day of the adequate and appropriate consumption of water—of saving it, of engaging in grey water initiatives and of simply teaching their children how precious water is. So schedule 4 is a good and appropriate initiative in all the circumstances.

Of course, we allow many organisations to obtain deductibility for charitable purposes and for income tax deductions. Certain gifts are given by people who are motivated by a more communitarian response—they want to help their fellow citizens, whether it is in the area of charity directed at health or the relief of poverty—and we enable a lot of organisations to offer the service of income tax deductions for gifts made to them. So getting deductible gift recipient status is very important and schedule 5 opens it up to a number of different organisations.

Schedule 6 is very interesting in that it allows, for example, a more appropriate use of reporting, forms and business accounting as well as electronic interactions between business and government. Schedule 6 allows the Registrar of the Australian Business Register to act as a multi-agency registration authority. It is a very good initiative. It will enable business to operate in a more effective way. It will simplify the relationship between government and business, reducing costs, duplication and the frustration that business often finds in dealing with government.

I will not go through the greenhouse challenge initiatives here. The member for Wakefield has gone through those in detail. As I have said, schedule 8 deals with tax exemptions for certain grants to businesses affected by the bushfires. It is important that we give our businesses confidence. How we deal with the taxation system, and how it affects small business, affects many millions of people in Australia. We are going through the worst global recession in 75 years. In the circumstances, it is a good thing—and the right thing—to act in a way which supports jobs and cushions the impact of the recession on our economy and on our electors. If we can change the taxation laws of this country to achieve that measure—to support jobs and small business to ensure that we as a country have a strong and prosperous future—that is the right thing to do by our country and by the individuals who are employed by small business. I commend the legislation to the House.

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I commend the member for Blair for his understanding of small business in Queensland and in Australia. He is dead right when he says that nothing frustrates business more than the impacts that governments sometimes have on their operations. At this time it is important that we do as much as we can to reduce those impacts. The Tax Laws Amendment (2009 Measures No. 2) Bill 2009 helps in a number of instances. The CGT changes are certainly valuable. The changes to the Australian Business Register help. The amendments to the Fuel Tax Act on fuel tax credits will be useful. And, for small business involved in the clean-up and restoration in Victoria after the bushfires, the exemption from tax on those grants will certainly be well received.

I am particularly supportive of the changes in relation to the urban water tax offset. Water supply is just so critically important these days. As the government tries to improve the security of water supplies to our major cities and the impact of this particular measure, the refundable tax offsets for eligible projects, in schedule 4, will in fact very much help both small and large businesses in making sure that these projects proceed as we would want to see them proceed.

I have a number of young Australians who give me advice, particularly on this National Urban Water and Desalination Plan and the refundable tax offsets. I am indebted to Nicholas Stanton, who has given me engineering and business advice on that particular matter. I also thank Keegan Sard on ETS and environment, Ella Bauman on higher education and Murray Bruce, particularly, on international relations. The opposition will certainly be supporting this bill and I thank the House for its attention.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

The Tax Laws Amendment (2009 Measures No. 2) Bill 2009 is a multifaceted bill covering a wide range of tax related amendments. It looks at the tax amendments to the Financial Claims Scheme, it covers capital gains matters, it covers tax offsets for water desalination projects and it covers issues in relation to the Fuel Tax Act. It also contains assistance measures for small businesses and primary producers affected by the Victorian bushfires, amongst other maters.

Many of these amendments go hand in hand with the measures we have taken to address the global financial crisis. These are measures that essentially give effect to the government’s decisive action in relation to the global financial crisis.

Before I go to some of the detail of these matters, I want to say a couple of things more broadly about the government’s response to the global financial crisis, as it has now been called. It is useful to think about some of the alternative scenarios faced by this nation. Can you imagine what Australia would be like today if we had not taken the decisive response to the global financial crisis we did take? Where would we be? We would be much more like America today, I suspect, if we had not taken such decisive action. America had a weak president, a very much diminished president, when the global financial crisis kicked in. I believe there was some of the lowest polling ever in America’s history as a consequence of that. America’s initial response to the global financial crisis was denial, and then inaction. We can contrast this with Australia’s strong and decisive action under the Rudd government, which this bill in detail reflects. If we had not taken the sort of response that we did under the Rudd government our cities and towns would be much more like many of America’s cities today, where hundreds of thousands of people are losing their jobs and their homes. Under this government’s response, which the detail of this bill backs up, we are creating hundreds of thousands of jobs. Our response has been strong and immediate.

I would like to go through some of the detail and aspects of this bill because they are very important to this nation. First, in relation to the capital gains tax amendment components, under the APRA scheme capital gains and losses arising from rights under the scheme are disregarded ensuring that the scheme does not trigger capital gains tax consequences that would not have arisen if the scheme had not been applied. In relation to the Farm Management Deposits, an amount paid under the scheme in relation to the Farm Management Deposit, the FMD, will be treated as a transfer of the FMD for tax purposes and not as a withdrawal of the FMD and the making of a new FMD. This ensures that the scheme will not trigger any tax consequences that would not have arisen if the scheme had not applied.

In relation to the retirement savings accounts, an amount paid under this scheme in relation to a retirement savings account with a failed financial institution into a new retirement savings account with another institution is treated as a rollover superannuation benefit, and I think that is very appropriate. This ensures that the payment is treated the same for tax purposes as if it had been made by the failed institution.

In relation to the first home savers account, an amount paid under the scheme in relation to a first home saver account with a failed financial institution into a new first home saver account with another institution is treated as a transfer between accounts. This ensures that the payment into the new account does not become ineligible for government co-contribution. An account holder’s ineligibility to have a first home saver account is rolled over into the new account and the time to notify a provider or the ATO of the ineligibility is extended so that he or she is neither advantaged nor disadvantaged by any changes in eligibility that occur whilst the existing account with the failed institution cannot be assessed.

There is more detail in relation to this schedule; however, the intent here is to ensure that people are not disadvantaged by the quirks of the taxation system and so ensure that these initiatives are implemented in a fair and equitable way.

The Financial Claims Scheme was enacted in October 2008. The introduction of the legislation for the scheme was brought forward because of the global financial crisis and so was not able to exclude any consequential amendments. In broad terms, it aims to provide the same taxation treatment that APRA makes under the Financial Claims Scheme as would have applied to the payments if they had been made by the failed financial institution or insurance company. Capital gains and losses in relation to rights created by the Financial Claims Scheme are not ignored. Payments in relation to a Farm Management Deposit—(Quorum formed) Clearly, there has been a change of thinking in the tactics committee of the Liberal Party, or at least perhaps a rather spoilt brat running the show.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

The member will withdraw that comment.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

I withdraw. Payments in relation to a farm management deposit, a retirement savings account or a first home saver account will generally have to be made into another account of the same type. This ensures that the normal restrictions on withdrawing amounts from those accounts are maintained. Those payments will generally be treated as a rollover from one account to another to avoid the consequences of them being treated as the opening of a new account. APRA will be subject to the same obligations to withhold amounts from payments, and to the same reporting obligations in relation to the amounts withheld or rolled over, that the failed institution would have been.

Another matter tackled by these amendments is the matter of small business capital gains—of course, very important to my constituency within Corangamite. These amendments to the small business capital gains tax concessions increase access to the concessions for taxpayers owning a capital gains tax asset used in a business by an affiliate or entity connected with the taxpayer and for partners owning a capital gains tax asset used in a partnership business. The main changes were announced in the 2008-09 budget. These amendments had been actively sought by industry, and will be a real help to many small businesses in my own electorate. Corangamite, my own electorate, is based around small business, and I have done a lot of work with small business to find out what their needs are in difficult circumstances. I am pleased to see them get assistance, particularly when we are in such difficult times, as we are now.

These amendments will also make a number of additional changes to refine and clarify elements of the existing small business capital gains tax concessions so that they operate flexibly, as of course the government intended. Industry stakeholders expressed support for these measures during consultation processes. A number of stakeholders suggested additional changes to the scope and application for small business capital gains tax concessions. The additional changes were not adopted, as they were beyond the scope of the current amendments and would also lead to more complex provisions or greater compliance costs for taxpayers.

I would also like to say a couple of things about the tax offset component in this bill in relation to urban water and desalination projects. I think it is a very important measure. It will help important water desalination projects get off the ground. The government is providing financial assistance under the National Urban Water and Desalination Plan to improve the security of water supplies to all of Australia’s major cities. This will be achieved by supporting major desalination, water recycling and stormwater harvest projects that will contribute significantly to this end. This measure implements the tax offset component within this plan. Assistance is capped at 10 per cent of eligible capital costs up to a maximum of $100 million per project. Successful applicants which are outside the tax system will receive cash grants instead of tax offsets. The Minister for Climate Change and Water is responsible for approving this assistance, and the plan is administered by the Department of Environment, Water, Heritage and the Arts. Part of the National Urban Water and Desalination Plan involves funding for stormwater harvesting projects. Additional funding for these projects, as well as relaxed eligibility criteria, were negotiated with Senator Xenophon as part of the passage of the $42 billion stimulus package through the Senate.

This forms part of the government’s Water for the Future and will support initiatives that drive investment in diverse water supply options and encourage industry and the community to save and use water more efficiently. This measure implements the government’s election commitment. Within my own seat, and in the city that I represent, there are two major projects in relation to water recycling. There is the $20 million commitment to Shell, which is a part of federal Labor’s commitment in the federal seat of Corio, and there is a $10 million commitment to the Black Rock recycling plant, which, of course, is very pleasing to my electorate. Most of the other elements which I have not touched on today have been canvassed by numerous speakers, so I will leave it at that. I commend this bill to the House.

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

in reply—I thank all honourable members who have participated in this debate. The members for Blair, Wakefield, Oxley and Corangamite gave very worthwhile contributions, as did, I must say, the members for Herbert and Casey. The member for Casey, my shadow minister, gave a well-considered and thoughtful presentation, as is usually the case. Unfortunately, we cannot say the same for the member for Moncrieff, the shadow minister for small business, who engaged in his normal bluff, bluster, sophistry and factual inaccuracies. (Quorum formed)

I will just take a few moments of the House’s time to run through the member for Moncrieff’s argument. Firstly, he said that the government’s changes to the PAYG repayment regime were his idea. He said, ‘They are just copying our policies.’ That is an interesting contribution from the member for Moncrieff, because I looked back at all his press statements and at all his speeches—I even consulted with my honourable friend the Minister for Small Business, Independent Contractors and the Service Economy—and I found that he had never called for change to the PAYG regime. Never did he call for the inflator to be reduced.

He did have a policy of changing the variation allowed, from 15 per cent to 30 per cent, but that is very different to our policy—that is on application and would still leave small business potentially open to a very large tax bill at the end of the year. As the minister for small business points out, it has not made their six-point plan on small business. So the member claims credit for the government’s initiatives but the policy he refers to is not even in the opposition’s six-point plan for small business.

He acknowledged that the government’s small business and general business tax breaks for investments might help a small number of small businesses—he says that it may have a small impact on the margin. In the last week, along with other economic ministers, I have been out in the electorates and in the regions of various parts of Australia talking to small business. Every single small business group that I spoke to congratulated and thanked the government for the small business and general tax break. We saw the thumbs up from the small business groups across the country. I am sure the minister for small business would agree that, in his activities over the last week, he had the same feedback. Unfortunately, the shadow minister for small business appears to be a little out of touch on that one.

We find the shadow Minister for Small Business covering the lack of opposition policies by always making the same speech. He could send in a cardboard cut out and press play on the DVD player, because we always get the same speech about small business issues. But he never points out that their other policy, part of their six-point plan, on loss carry-backs would increase the budget deficit by $1 billion. This is the opposition that is concerned about the budget deficit and argues so forcefully that we must have a lower deficit and a lower debt, and yet this policy of theirs would increase the budget deficit by $1 billion. And it would not provide any cash flow relief to small business until 1 July 2010, not 1 July 2009. We could live with 1 July 2009; that would be good; that would be fine. But as for 1 July 2010, I do not think that small business, which finds itself in cash flow difficulty, would appreciate a policy which provides relief from 1 July 2010. That is a long time to wait for cash flow relief.

The contributions from all the other honourable members—the members for Casey, Herbert, Blair, Wakefield, Oxley and Corangamite—were very worthwhile contributions. Unfortunately, I cannot say the same for my honourable friend the member for Moncrieff.

Schedule 1 makes amendments to ensure that there are no inappropriate tax consequences arising from payments made under the financial claims scheme which this parliament enacted in October last year. Under that scheme, APRA can make payments to account holders in failed financial institutions and to claimants under general insurance policies with failed insurance companies. This is a very important measure for that reason.

Schedule 2 increases access to the small business CGT concessions for taxpayers owning passively held CGT assets. These amendments will extend access to the small business CGT concessions to circumstances that do not currently meet eligibility requirements. Taxpayers who own a CGT asset used in a business by an affiliate or entity connected with the taxpayer and partners owning certain CGT assets used in a partnership business will have access to the small business CGT concessions via the small business entity test from the 2007-08 income year. This schedule also makes a number of minor amendments to clarify aspects of the existing small business CGT concession provisions so that they operate flexibly and as intended.

Schedule 3 amends the law to provide a general exemption from CGT for capital gains or capital losses arising from a right or entitlement to a tax offset deduction or similar benefit. This amendment will ensure that a capital gain or loss would not arise for taxpayers in such circumstances or in other circumstances where taxpayers have a right or entitlement to a tax offset deduction or other taxation benefit.

Schedule 4 provides refundable tax offsets for eligible projects under the government’s $1 billion National Urban Water and Desalination Plan. Under the plan, eligible projects may receive a rebate of 10 per cent of the eligible capital costs up to a maximum of $100 million per project. This schedule implements the refundable tax offset component of the plan and delivers on the government’s election commitment.

Schedule 5 amends the Income Tax Assessment Act 1997 to specifically list four new organisations as DGRs and to extend the time period of three existing listings. Organisations with DGR status can collect tax deductible gifts. This schedule specifically lists or extends the listing of the Australasian College for Emergency Medicine, the Grattan Institute, the ACT Region Crime Stoppers Ltd, the Parliament of World Religions of Melbourne 2009, Yachad Accelerated Learning Project Ltd, St George’s Cathedral Restoration Fund and the Bunbury Diocese Cathedral Rebuilding Fund.

Part 1 of schedule 6 improves the integrity and efficiency of the Australian Business Register or ABR and helps position the registrar of the ABR to take on the role of a multi-agency registration authority. Part 2 of schedule 6 enables representatives of businesses to be identified by the registrar of the ABR for the purpose of communicating electronically with multiple government agencies on behalf of their respective businesses. These amendments facilitate the standard business reporting program, which aims to reduce reporting burdens for business by eliminating unnecessary or duplicated reporting and to improve the interface between businesses and government agencies.

Schedule 7 amends the Fuel Tax Act 2006 and related provisions elsewhere in the tax law to remove provisions that businesses must be a member of the Greenhouse Challenge Plus program to claim more than $3 million of fuel tax credits in a financial year. Without this amendment to the Fuel Tax Act, businesses would be able to claim fuel tax credits in excess of $3 million in a financial year after 30 June 2009. This would be inconsistent with the policy intent of the fuel tax credit system. The Greenhouse Challenge Plus program will cease after 30 June 2009. This outcome will be able to be achieved through the government’s Carbon Pollution Reduction Scheme.

Schedule 8 provides an exemption from tax for the clean up and restoration grants paid to small businesses and primary producers affected by the Victorian bushfires. This measure recognises the extraordinary hardship suffered by small businesses and primary producers in affected areas.

The bill was referred to the Senate Standing Committee on Economics, which reported on 7 May 2009 recommending that the bill be passed. I thank the opposition for their support, despite the comments of the member for Moncrieff, and I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.