Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

I rise on behalf of the coalition to speak on the Tax Laws Amendment (2012 Measures No. 3) Bill 2012, the Income Tax (Seasonal Labour Mobility Program Withholding Tax) Bill 2012 and the Tax Laws Amendment (Income Tax Rates) Bill 2012. There are a number of schedules in the first bill that I will go through very briefly. But let me say at the outset that the coalition will not be opposing these bills. I will run through them very quickly. The first bill, the Tax Laws Amendment (2012 Measures No. 3) Bill 2012,has a series of schedules making changes to our tax law. In the first schedule, as was made clear during the minister's introduction and in the explanatory memorandum, there will be a new final withholding tax regime that applies to income derived by nonresident workers participating in the Seasonal Labour Mobility Program Workers Pilot Scheme. The second schedule has some technical amendments to ensure that the 2011 alternative fuels and clean energy legislation works as originally intended. The third schedule removes eligibility for the low-income tax offset on unearned income of minors.

The fourth schedule relates to clean energy payments. As the minister—the Assistant Treasurer, who has just joined us here at this hour—made clear in his introductory speech, this measure proposes to exempt from income tax clean energy payments made to recipients of various payments under the Abstudy scheme, the Veterans' Children Education Scheme, the Military Rehabilitation and Compensation Act Education and Training Scheme, and the transitional family farm payment and exceptional circumstances relief. The measure will apply from 2011-12, but naturally any retrospective impact is beneficial to those taxpayers concerned.

The fifth schedule relates to better targeting of the employment termination tax offset, and the measure amends the Income Tax Assessment Act 1997 so that access to the employment termination payment tax offset and the amount of the offset received will take into account an individual's taxable employment termination payment as well as other taxable income in the year they receive the employment termination payment. From 1 July 2012, any taxable component of that ETP that takes a person's total taxable income in a year above $180,000 would be taxed at marginal rates.

Very briefly, the Income Tax (Seasonal Labour Mobility Program Withholding Tax) Bill 2012 provides for the formal imposition of income tax and the establishment of the applicable tax rate to give effect to the final withholding tax regime that would apply to income derived by non-resident workers participating in the seasonal labour mobility program. As I said, as with the previous bill under discussion, the Assistant Treasurer outlined all of these measures in some detail during his introduction just last Thursday.

The final bill, the Tax Laws Amendment (Income Tax Rates) Bill 2012, amends the Income Tax Rates Act 1986 to align the personal income tax rates for nonresidents for Australian tax purposes more closely with the personal income tax for Australian resident taxpayers. It does so in a number of ways, as he outlined. As I said at the outset in speaking on this bill on behalf of the opposition. the coalition will not be opposing it and I commend the bill to the House.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

On a blog post on 8 December last year, Possum Comitatus—aka Scott Steel—wrote of 'Australian exceptionalism'. He wrote:

Never before has there been a nation so completely oblivious to not just their own successes, but the sheer enormity of them, than Australia today.

It is within the context of that extraordinary economic performance—unemployment, inflation and the cash rate each below 5 per cent for the first time in 40 years—that we are considering this package of bills. Time does not permit me to go into the many features of this package of bills that the Assistant Treasurer has pulled together, so let me simply note: that the Seasonal Labour Mobility Program builds on the successful Pacific Seasonal Worker Pilot Scheme; that the government is realigning the tax rate schedule for non-residents to align it better with marginal tax rates that Australian residents face; that the government is removing the ability of children to access the LITO to discourage income-splitting between adults and children; that we are introducing technical amendments to ensure that legislation does not impose unintended consequences on taxpayers; and that we are scaling back large tax concessions for generous executive salary packages that are simply not available to many low- and middle-income earners. It is a terrific package of bills and I commend them to the House.

David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Link to this | Hansard source

I thank members who have contributed to this debate. Schedule 1 to the Tax Laws Amendment (2012 Measures No. 3) Bill 2012 reduces the marginal tax rate for Pacific Islander and East Timorese seasonal workers to 15 per cent, to be administered as a final withholding tax with effect from 1 July 2012. The Income Tax (Seasonal Labour Mobility Program Withholding Tax) Bill 2012 formally imposes this rate of tax.

Schedule 2 makes minor consequential amendments to the taxation of gaseous fuels and the taxation of aviation fuels. These will ensure that the clean energy legislation and the legislation applying fuel tax to gaseous fuels operate as intended. Schedule 3 makes a technical amendment to the Income Tax Assessment Act 1936 to ensure that the government's 2011-12 budget measure to remove the ability of minors to use the low-income tax offset to reduce tax on their unearned income operates as intended. Schedule 4 provides an exemption from the income tax for clean energy payments made to recipients of specified government payments. Schedule 5 changes the taxation of termination payments to make it fairer by limiting access to the employment termination payment tax offset for high-income earners. Payments received because of genuine redundancy, invalidity or the death of an employee will not be affected by these reforms.

The Tax Laws Amendment (Income Tax Rates) Bill 2012 will amend the personal tax rates for non-resident taxpayers to align with the rates for resident taxpayers. I commend this bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.