Sussan Ley (Farrer, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I am pleased to speak on the Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2009. This bill was introduced on 19 November 2009 and implements the reforms to the tax secrecy and disclosure provisions that were announced by the former coalition government. I would like to say at the outset that the coalition will support the passage of this bill through the House. Currently, the rules regarding the protection and disclosure of taxpayer information are contained in 20 different acts. This bill consolidates 18 of these provisions by rewriting the current 18 acts into one single act.

On 17 August 2006, the then Treasurer announced the release of a Treasury discussion paper called Review of taxation secrecy and disclosure provisions, in which it was proposed to rewrite the existing tax law provisions regarding the confidentiality and disclosure of taxpayer information into a single piece of legislation. At that time, the then Treasurer said that the reforms would provide increased certainty for taxpayers, tax officials and users of tax information such as government departments and agencies. Treasury then began to undertake an extensive process of public consultation with a wide range of stakeholders, including professional associations, government agencies, business groups and taxpayers.

Madam Deputy Speaker May, I apologise to the House. I appear to have the incorrect bill. I take full responsibility for that. The bill before us is the Tax Laws Amendment (2010 Measures No. 3) Bill 2010. The provisions are contained in detail in the explanatory memorandum, which I am seeking. I apologise for the inconvenience to the House. I seek leave to address the House on the other bill afterwards.

Leave granted.

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

I speak in support of the Tax Laws Amendment (2010 Measures No. 3) Bill 2010. This bill amends the tax laws, as so much tax legislation does, by way of schedule. There is a plethora of issues raised in it, but I will just go through them briefly, from schedule 1 to schedule 5. The first schedule deals with the government’s budgetary measures relating to freezing of indexation of co-contribution income thresholds for the 2010-11 and 2011-12 income years. It also relates to the matching rate and the maximum contribution payable at $1,000. Currently the government’s co-contribution scheme matches the eligible personal superannuation contributions for qualifying individuals at a rate of 100 per cent to a maximum of $1,000. The current rate reflects changes in the 2009-10 budget, when the government announced a temporary reduction in the matching rate and maximum government co-contribution payable for eligible personal superannuation contributions to the level of 100 per cent and $1,000. The maximum co-contribution is payable to assist individuals who have low incomes. For those individuals with incomes at or below $31,920 in the 2009-10 income year it applies, and it phases out at 3.333c for every dollar above the threshold. For contributions made in that year no co-contribution is payable for an individual’s income where it is greater than $61,920.

It is quite clear that this is the government’s way, in terms of co-contributions, to assist middle- and low-income earners with superannuation to allow them to live their retirement years with dignity, respect and financial security. This is a good scheme that we have. The superannuation industry, a trillion-dollar industry in this country, does provide opportunity for people, particularly those on low incomes, to save for their retirement. It is a compulsory form of saving. Those opposite oppose steadfastly the superannuation industry and the superannuation guarantee, but we are pleased that there seems to be at least some agreement that this is a good thing for the country.

Proposed amendments mean a number of things. They mean for the 2010-11 and 2011-12 income years the low- and high-income thresholds will remain at those figures I said. Current indexation arrangements will recommence for 2012-13 and later income years. Proposed amendments also mean some other changes with respect to the assistance provided. These changes have a fiscal impact of a not insignificant amount. We are talking about $645 million over forward estimates, an enormous sum of money which will assist the government to get back into surplus within three years, as we have committed in the budget speech of the Treasurer.

There are two components, as I said, to the government’s action on superannuation for people on low incomes: changes to the co-contribution and the new low-income earners superannuation contributions tax rebate. We are keeping, as I said, the very compassionate and generous co-contribution worth up to $1,000 per year, and matching eligible contributions dollar for dollar.

There are a number of other things we are doing with respect to superannuation, which I think is so important. The government has announced, and the Treasurer and the Prime Minister have made it crystal clear, that we intend to boost superannuation savings of middle- and low-income Australians through what we have described as our stronger, fairer and simpler superannuation reforms. From 1 July 2010 the government will provide a contribution of up to $500 for workers with incomes up to $37,000. This is going to assist a total of about 3.5 million Australians who have income up to that amount. They currently receive very little in terms of assistance and so this is a very generous thing to do. It is the right and decent thing to do to assist those Australians. In contrast, only about 20 per cent of eligible low-income earners benefit from the existing co-contribution scheme, and the government will still provide the co-contribution of up to $1,000 to give them a helping hand.

The government’s commitment to superannuation is crystal clear in our very strong commitment with respect to the resource super profits tax and what that will enable the Australian community to receive. One aspect of what we will use that superprofits tax money for is to help fund a higher superannuation guarantee of 12 per cent, which will assist 8.4 million Australians, phased in over seven years from 2013-14. As I said, the superannuation for low-income earners will give 3.5 million Australians up to $500 from 2012-13.

The government’s commitment to the superannuation industry is clear. The government believes that superannuation is an important part of the Australian way of life. It is a great reform initiated by the Hawke and Keating governments across the 1980s and through the 1990s. It is one of the lasting legacies of governments which made a significant impact in terms of financial reform, tax reform and industrial relations reforms as well. The Rudd government is committed to the superannuation industry and providing generous superannuation assistance which will enable Australians to live free from the anxiety of living their retirement years in poverty and deprivation. We are keen to make sure that occurs.

There are other changes. Schedule 2 deals with the operation of what is called the thin capitalisation rules with respect to authorised deposit-taking institutions to take into account the January 2005 adoption of the Australian equivalent to International Financial Reporting Standards. The thin capitalisation rules are important for the Australian economy. A thinly capitalised entity is one whose assets are funded by a high level of debt and a relatively small amount of equity. An entity’s debt-to-equity funding is sometimes expressed as a ratio. Economists and financial advisers talk about this sort of thing from time to time. Accountants also use this sort of expression. For example, a ratio of three to one means that for every $3 of debt the entity is funded for up to $1 of equity. Commonly they call that ‘gearing’. So thin capitalisation rules are important. The Australian Taxation Office rigorously pursues these issues. We think they are important for maintaining the integrity of the tax system and maintaining the economy and they are important for the interaction between Australian and international companies as well.

Schedule 2, which, as I said, deals with this, amends division 820 of the Income Tax Assessment Act 1997 to amend the operation of the thin capitalisation rules for authorised deposit-taking institutions to make sure that they take into account the adoption of the Australian equivalent to International Financial Reporting Standards. The operation of the thin capitalisation rules is amended to make sure that certain assets which the Australian public would probably consider unnecessary to be considered as equity are taken into consideration—for example, Treasury shares. The value of a business enforced component—for example, what is often described as an excess market value over net assets—is taken into consideration. There is capitalisation of software costs, which will increase the amount of equity that an ADI must hold in Australia by only four per cent of its value.

These are important changes. The thin capitalisation rules are important for ensuring that Australian and multinational companies do not allocate to Australian companies or entities a gross or excessive amount of debt incurred overseas. So this is a particularly important change, because the thin capitalisation rules take into consideration the treatment of equity and debt. The adoption of this amendment is important for maintaining the consistency of our rulings, particularly with respect to the tax laws of this country.

The third schedule deals with the removal of any possibility that the use of information which arises as a result of the operation of the Income Tax Assessment Act which is provided to, say, the Australian Taxation Office conflicts with or potentially reveals information which will prejudice national security. For example, a disclosure of information while the tax authorities are administering the Income Tax Assessment Act may end up prejudicing or providing information which may impact upon our security and intelligence services. This schedule gets rid of the potential conflicts in these circumstances. The measure removes any prospect of doubt about whether the taxation authorities’ general practice of agreeing to the security agency’s request not to seek that information is always legally justified by providing a legal justification and framework. It does that by making sure that the directors-general of ASIO and ASIS declare that the tax laws do not apply to specified transactions. It provides a legal framework, justification and authority in circumstances in which in the past this was simply a practice. This is an important reform to protect the national security and intelligence services and their effective operation.

Briefly, the fourth and fifth schedules are also important changes. The fourth schedule deals with special disability trusts, which were introduced in 2006 to assist families and carers to make private provisions for current and future care and accommodation of a family member, particularly someone who, sadly, suffers from severe disability. That person is referred to as a ‘principal beneficiary’ of that particular trust. Income of that SDT which is not expended for the care and accommodation of the principal beneficiary is taxed at the top rate, which simply sounds unfair. That money could be unexpended. It is income in the trust. It is now going to be taxed at the beneficiary’s marginal tax rate, and that is a fairer system in the circumstances. I think it is a measure which shows the government compassion. I think it is simply wrong that those individuals should ever have been taxed at the top personal rate in addition to paying the Medicare levy, especially given that these trusts were established to provide for people with severe disability and those in serious need as a consequence thereof.

The fifth schedule amends the definition of a managed investment trust. A media release of the Assistant Treasurer talked about this in detail. I will not go through it, but he makes it plain that the changes to the definition are part of a move to closer align the definition of a managed investment trust for withholding tax purposes with a definition of same for capital account purposes. He makes it plain—and I have seen what has been said about this—that this is part of the government’s strategy to ensure that we have a strong system for international transactions of government businesses that involves better security and better certainty and clarification of the definitions of managed investment trusts and to make sure that Australia is a more competitive place with respect to financial services—that we can compete with the likes of Singapore, Hong Kong, China and Japan. We need to make sure, if we are going to attract business investment and the many entities in the myriad corporate structures that are being created these days, that we have a legal framework that will provide security. We want to make sure that Australia has a competitive funds management industry, which employs many people in the service industry across this country. They were hit hard by the global recession. We want to make sure that we can advance our economy, and that is done through the service industry and through financial advice. These amendments add certainty. They will make sure that we attract foreign capital and that businesses know where they stand on the definition of a managed investment trust. These are important reforms. They sound a bit esoteric, a bit obscure, but they add benefit to our business community, our investment community and our superannuation community and thereby add benefit to the Australian community. I support the legislation.

Sussan Ley (Farrer, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I thank the previous speaker for going ahead of me in the schedule when I was not appropriately prepared. It gives me pleasure to speak on the Tax Laws Amendment (2010 Measures No. 3) Bill 2010. This bill amends various tax laws to implement a range of changes to Australia’s tax system. Amendments include the government’s changes to the superannuation co-contribution for low-income earners, changes to the thin capitalisation rules for authorised deposit-taking institutions, changes to financial transactions involving security and intelligence agencies, changes to the taxation of unexpended income of special disability trusts and changes to the definition of a managed investment trust.

The bill deals with five schedules. Schedule 1 refers to changes to the superannuation co-contribution scheme. It removes the indexation of the co-contribution income thresholds for the 2010-11 and 2011-12 financial years. It also removes the legislated increase in the maximum contribution. The current maximum co-contribution amount was scheduled to increase from $1,000 to $1,250 in 2012-13 and to $1,500 in 2014-15. The amendments in schedule 1 will mean that the maximum co-contribution amount will remain at $1,000. The changes in schedule 1 were announced by the government in the 2010-11 budget. Schedule 1 has a financial impact of $645 million of savings over the forward estimates.

Schedule 2 concerns the changes to the thin capitalisation rules of authorised deposit-taking institutions and amends those rules to reflect the new accounting treatment of certain assets under the Australian Equivalents to International Financial Reporting Standards that the industry adopted in January 2005. The assets that are affected are Treasury shares, the value of the business enforced component of the excess market value over net assets, or EMVONA, and capitalised software costs. The amendments in schedule 2 were announced by the government in the 2009-10 budget.

Schedule 3 concerns financial transactions involving the security and intelligence agencies. This schedule will allow the directors-general of the Australian Security Intelligence Organisation and the Australian Secret Intelligence Service to exempt certain financial transactions from Australian tax law. Schedule 3 will allow certain transactions to certain entities to be exempt from tax law to ensure that information related to national security remain secret. The amendments in schedule 3 reflect the current practice of Australian tax authorities. However, it is not clear whether that practice is legally justified. Schedule 3 ensures that it is.

Schedule 4 concerns the changes to the taxation of unexpended income of special disability trusts. It amends the law to reduce the tax rate of unexpended income of a special disability trust from the highest marginal rate to the beneficiary’s personal rate. Provision for these trusts, as many of us know, was introduced by the former coalition government in 2006 to allow families and carers to establish a trust with the specific purpose of paying for the care and accommodation of a beneficiary with a severe disability. These trusts allow a gift concession of up to $500,000 and an assets exemption of up to $551,750, which is indexed annually. Currently, where the annual income of a special disability trust is not completely spent on the care and accommodation costs of the beneficiary then the remaining unexpended income is taxed at the penalty rate of 46½ per cent. This is the same treatment as for unexpended income of other trusts, and schedule 4 removes this unintended consequence.

Clearly, if we are setting up trusts in order to assist parents to care for their, usually adult, disabled children after they are no longer here to provide for them and if we intend these trusts to attract the capital that those parents would like to pass on—but that might, of course, trigger capital gains tax consequences were they to go through normal estate processes—then we certainly do not want the punitive act of unearned income in a trust being taxed, as it is under trust law, at the highest marginal rate. That is why this measure is required. I understand that, with regard to the trusts that have been set up—and there are not many—the Australian Taxation Office has simply suspended the processing of the returns for these trusts and is waiting for this provision to be passed. So I thank the ATO for their treatment of this and their understanding in not adding to the stress of those who would certainly be stressed were they to receive assessment notices that taxed, at the highest marginal rate, income that is being retained in order to be reinvested in these special disability trusts.

Currently, where the annual income of a special disability trust is not completely spent on care and accommodation costs then the remaining income, the unexpended income, is taxed, as I said, at the penalty rate of 46½ per cent. This schedule ensures that any income in a special disability trust that is unexpended will be taxed at the same rate as the beneficiary’s marginal tax rate. It is not a matter of the income escaping taxation; it is a matter of it escaping, quite rightly, penalty taxation. A financial cost has been allocated to this measure of $1 million a year. As I said, this was always the intended application of this provision when it was conceived. In order to assist those tax returns that are held up at the moment and, in fact, to cover special disability trusts for the entire life of those trusts, the amendments will apply from 1 July 2008.

Schedule 5 expands the definition of a managed investment trust in relation to the withholding tax rules to provide a closer alignment between the withholding tax rules and the capital account election rules that were passed by the parliament with the support of the coalition earlier this year. The managed investment trust withholding tax definition will be expanded to include wholesale managed investment schemes and government owned managed investment schemes. The changes will also amend the managed investment trust withholding tax definition to introduce a trading business test for trusts that would otherwise qualify as managed investment trusts and will clarify the operation of the definition where there is only one member.

I understand that the government will be moving amendments in this place to schedule 5 of this bill, which concerns the definition of a managed investment trust. Those amendments will broadly satisfy some very serious concerns that were raised when this bill first became known. The first of the amendments that the government has foreshadowed broadly allows a trust to qualify as an MIT if a substantial proportion of the investment management activities relating to the assets of the trust that have a relevant connection with Australia are carried out in Australia. That is the investment management requirement, which only applies in respect of assets of the trust that have a relevant connection with Australia. Restricting the investment management requirement to such assets ensures that trusts that have a mix of Australian and offshore assets, where the investment management activities are located where the assets are located, remain eligible for the definition of a managed investment trust. Assets that have a relevant connection with Australia are assets of the trust that are situated in Australia, taxable Australian property, or shares, units or interest traded on an Australian stock exchange.

It was a key point in the submissions that were received that the introduction of this Australian management requirement as it was originally conceived in the bill would not actually promote the establishment of funds in Australia that would be offered for offshore investment, because in order for a trust to qualify for the concessional withholding rules the investment management activities for the trust must be performed in Australia. This applies to both registered and unregistered managed investment schemes. It is appropriate that this appears to have been addressed in the amendments.

Further amendments that the government is moving to its own bill prescribe that widely-held trusts apply for registered trusts that are wholesale trusts within section 12-401 and that the trusts will pass the widely-held test if they satisfy one of two criteria. Those criteria are that the trust has at least 25 wholesale members, or one or more specified widely-held entities together hold at least 25 per cent and no single other type of entity holds in excess of 60 per cent of the interests of the trust. The opposition supports those amendments. Obviously they are quite recent in their arrival and time lines have been tight. They will be considered further by the Senate, but we broadly support the amendments, as we do a strong and vibrant managed investment trust regime in Australia that enables Australian fund managers to exercise skills that are genuinely recognised throughout the world under a regime that does not act as a disincentive for overseas investors to invest their funds here. I commend the bill to the House.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I rise in full support of the Tax Laws Amendment (2010 Measures No. 3) Bill 2010. This is a bill that will help cement the role of Australia as a leading financial hub in the Asia-Pacific region. These important reforms allow Australian managed funds and other businesses to compete on the world stage to ensure they can continue to grow, increase services exports and support more jobs. This bill is part of a larger financial sector reform being undertaken by the Rudd Labor government to ensure the economy remains strong and future growth is not stifled.

The events of late 2008 and early 2009 reminded us that the world’s markets and economies can be fragile. We need the type of vision that the government has brought to this particular piece of legislation to ensure our country is in the best possible position to attract foreign investment and bolster domestic markets. We also need to make sure that hardworking employees are supported and encouraged to invest their funds through superannuation in this country.

This bill continues the government’s support of low-income earners by permanently maintaining the current co-contribution that is payable on a person’s eligible superannuation contributions. Essentially, the government will match dollar-for-dollar the contributions workers make to their own superannuation up to a limit of $1,000 where a worker is earning below the threshold of $31,920. The contribution reduces by 3.33c for each dollar by which the person exceeds that threshold of $31,920. This is a critical support for low-income earners. Superannuation, as we all know, is a lifeline for many people heading towards their retirement. It takes people many years in the workforce to accumulate a nest egg to help support themselves when their working days are over. Therefore, this co-contribution is a very strong incentive to encourage people to save for their retirement. It is something sound and this legislation is going to permanently ensure that it occurs and is available.

We all recognise that Australia has an ageing population. The recent Intergenerational report leaves no doubt that our ageing population will place substantial pressure on our economy and the budget over the coming 40 years. That is why it is important to recognise the activities of the former government of Bob Hawke and Paul Keating. They had the foresight to introduce compulsory superannuation and policies to grow the superannuation system. I know that it certainly was not greeted universally on all sides of the House.

Prior to the Hawke-Keating superannuation legislation, it was only those people who had award based super who could make provisions for themselves throughout the industrial ranks. The Hawke-Keating legacy ensured that all Australians would have superannuation so that they could make provision for their retirement—not just the privileged, those in the public sector or those who had the unions negotiating on their behalf for industrial based superannuation.

Superannuation is a topic I regularly discuss with constituents in my electorate of Werriwa. Unfortunately, the majority of constituents—they certainly do not come to me for financial advice—need to talk about the early release of their superannuation funds to tie them over during distressing periods in their lives. People who find themselves on the brink of losing their house because they cannot make mortgage repayments or people who, for a number of reasons, may find themselves in a very depressed financial situation come to us asking whether they can do something about it because they know they have a nest egg put away. They feel the need to make an early call on that nest egg to overcome some temporary financial difficulties which they have to endure. We know that there are limits to which people can participate in early withdrawal because the purpose of superannuation is to provide retirement income. These meetings are poignant reminders that superannuation is more than an investment for retirement; it really can be a lifeline for those who need financial help the most.

This leads me to another aspect of the bill of which I am particularly proud—that is, providing a lifeline for people in our community with a severe disability. As I have said on many occasions in this House, the south-west of Sydney has a disproportionately high number of people who are living with a disability. I can assure you that there is nothing in our water supply. This clearly is related to the cost of living because people catering for family members who have disabilities have very high costs. Every parent desires to give their kids the best start in life and we all want the best for our children. It is the same for parents who have a child with a disability. Some of the parents are in their 80s—85 in one instance. They talk about their children who are sometimes in their 60s. I am constantly asked, ‘What is going to happen when I go?’

More and more families are making provision for their children into the future. Special disability trusts were introduced in 2006 to allow private financial provision for the current and future accommodation needs and care of a family member with a severe disability without being affected by the social security rules on means testing or gifting provisions. Through this bill, the government is removing the barriers which prevent families from making these financial contributions. Unfortunately, take-up of these special disability trusts has been disturbingly low.

As I understand, in the first three years of the program, there have been only 52 trusts operating with 326 eligible beneficiaries. In October 2008, the Senate Standing Committee on Community Affairs reported that the tax arrangements that apply to special disability trusts diminish their value for carers and people with disabilities. These amendments ensure that the taxation of the expended income of the trust is not a disincentive to the establishment of a special disability trust. Any unexpended income of a special disability trust under these provisions will now be taxed at the beneficiary’s personal income tax rates, rather than the highest marginal tax rate plus the Medicare levy. By removing these barriers, the special disability trusts will become a more attractive tool for families who are looking to provide for the long-term care of a family member with a severe disability.

I cannot understate my belief that it is the moral responsibility of all governments to ensure people with a disability are not marginalised and certainly are not forgotten. We need to do everything we can to look after people in the community who care for people with a disability. As I have stated, there are a number of beneficial outcomes from this bill in that respect. The bill provides clarity and certainty about the operation of the capitalisation rules for authorised deposit-taking institutions to take into account the changes to financial reporting standards that occurred in January 2005. It provides for a clearer definition of a managed investment trust so that it is more closely aligned to the definition of the withholding tax.

It is imperative to remember that this government has reduced the rate of final withholding tax from 30 per cent to 7.5 per cent, down from what was the highest rate in the world to effectively now the lowest. This has undoubtedly enhanced the competitiveness of the Australian managed funds industry in attracting future foreign investment.

Finally, this bill will remove the potential conflicts between Australia’s national security interests and obligations imposed by Commonwealth tax laws. It will allow the Director-General of Security and the Director-General of the Australian Secret Intelligence Service to declare that a specific entity is not subject to Commonwealth tax laws in relation to a specified transaction. This will ensure that the tax authorities will not need to obtain information that should remain secret in the interests of national service. I would be very surprised if any member of this House would argue this particular amendment is not necessary.

Overall, this is a very good bill for Australia’s economy and Australia’s people. It helps position Australia as a financial hub in the Asia-Pacific region. It ensures that hard-working members of the workforce are rewarded for taking responsible steps to ensure their superannuation can be relied on to support them throughout retirement. It removes taxation barriers, allowing families of a person with a severe disability to ensure the long-term care and accommodation needs of their loved one are taken care of. I wholeheartedly commend this bill to the House.

Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

I am sorry that I will only have a few minutes to begin my contribution to the Tax Laws Amendment (2010 Measures No. 3) Bill 2010 debate. I do so to address the fourth schedule of this bill which relates to the special disability trusts. I have to say that I am deeply disappointed that, notwithstanding the Senate Standing Committee on Community Affairs releasing a report entitled Building trust: supporting families through disability trusts in October 2008, which made, I think 14 recommendations, the government is really only tinkering at the edges of this and has not responded very satisfactorily to those 14 recommendations.

Of course, we are grateful for any measures that adjust some of the worst elements of the tax provisions of the special disability trust. The other thing I am concerned about is that the report came down in 2008, we are now getting toward the second half of 2010 and we are going to go on a long break, and these few minor measures, which have been addressed in this bill in relation to special disability trusts, will not come into effect until 1 January 2011. I do not know why we have this delay. Why do we have this mean-spirited approach to families who take on some of the biggest burdens in caring for this country’s profoundly disabled people? We are not talking about people with mild disability—any disability is difficult to deal with—these are families who are dealing with profoundly disabled children or dependants.

Having said that, I would like to thank the Parliamentary Secretary for Disabilities and Children’s Services for assisting me to work my way through these changes. As I said, we do welcome whatever incremental changes we get. I know that the parliamentary secretary is committed to real change in this area. I fear, as happened in our government, that these things end up in the hands of people—and maybe some of the officials are here in the gallery tonight—in Treasury and finance and they become so difficult that nobody can figure them out. Even the minister’s office has difficulty figuring out what they actually mean for families who want to establish these trusts. Please let us have clarity around this. Let us give some hope to those families who care for profoundly disabled children. Those measures have been addressed to some extent in this bill. As I said, of the 14 recommendations, very little has been picked up. These few items in the tax bill are still very difficult to work out.

People with a disability, who are beneficiaries of a trust, will be able to work up to seven hours a week in the open labour market and still qualify. The special disability trust will be able to pay for the beneficiary’s medical expenses, including membership costs for private health funds, and the maintenance expenses of the trust’s assets and properties. The special disability trust will be able to spend up to $10,000 in a financial year on discretionary items not related to the care and accommodation needs of the beneficiary trust.

Parents caring for disabled children commit their lives to ensuring their loved ones enjoy the highest quality of life possible. Such care is intensive, emotionally draining and financially onerous. Added to their daily struggle, families face an abysmal lack of equality in endeavouring to make provision for their dependants. When I have an opportunity to come back into this place and complete, hopefully, my speech on this bill, I will point out that I think some of the things that we do to people in this trust set-up are positively discriminatory to people with a disability. It is a very unsatisfactory state of affairs.

In 2006, the coalition government attempted to ease the financial concerns and legislated for special disability trusts. From their own funds family members could make provision for the current and future needs of family members with severe disability without impact to social security entitlements for either contributors or the individuals. As I said, I think ministers in both the Howard government and the current government have the interests of people with a disability at heart, but it seems to get bogged down when it leaves this place, and the detail becomes completely unworkable.

Experience has revealed significant shortcomings in these measures. Initially it was estimated that 5,000 trusts would be established by 2010. As at 31 March 2010, only 91 trusts have been established despite 423 people being assessed as eligible. Special disability trusts are regarded by parents of disabled dependants as an option of last resort and are often established against informed legal advice. That is because they are basically unworkable and extremely complex and difficulty, even for professionals in the field. We have been waiting for advice back from the department, which we still have not got, to clarify some issues of tax.

Madam Deputy Speaker May, I think the time is about up and we are going into the adjournment debate, and I seek leave to continue my remarks later.

Leave granted.

Debate interrupted.