Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Parliamentary Joint Committee on Corporations and Financial Services I present the committee's advisory report, incorporating a dissenting report, on the Tax and Superannuation Laws Amendment (2013 Measures No. 1) Bill 2013, and I ask leave of the House to make a short statement in connection with the report.

Leave granted.

I am pleased to speak on the joint corporations and financial services committee's March 2013 report on its inquiry into the Tax and Superannuation Laws Amendment (2013 Measures No. 1) Bill 2013. The bill amends various taxation and superannuation laws to implement a number of changes, which include:

These are important changes which will improve the operation of the relevant acts. I would like to take this opportunity to highlight just a few of the amendments and their impact out in the general public.

Taxation of interest on unclaimed money

I am sure that many members of the general public will be very interested in this. Schedule 1 of the bill amends the income tax and superannuation law to ensure that income tax is generally not payable on the interest paid by the Commonwealth on unclaimed money from 1 July 2013.

As noted in the explanatory memorandum, the taxation of the interest that would be gathered would be inconsistent with the government's objective of ensuring the real value of unclaimed money is preserved, as individuals would receive the real value reduced by the relevant tax on the amounts of interest. To achieve its objective, the government is legislating to ensure that interest paid by the Commonwealth on unclaimed money is not subject to income tax. That means more money in the pockets of ordinary Australians who find themselves in this situation where they have unclaimed money.

I want to go to the information we received at our quarterly ASIC oversight hearing on Friday to indicate the incredible response of the public to the opportunity to seek unclaimed money through a more streamlined process that ASIC have overseen the development of in recent months.

Self-managed superannuation funds—acquisitions and disposals of certain assets between related parties

Schedule 4 of the bill amends the Superannuation Industry (Supervision) Act 1993 to prescribe requirements for acquisitions and disposals of certain assets between SMSFs and related parties in response to recommendations from the 2010 Super System Review.

That review expressed concerns that the off-market acquisition and disposal of assets between related parties and SMSFs, where the buyer and seller are effectively the same person, 'lacks transparency, is inherently risky and is open to greater abuse that non-related party transactions'.

In particular, the review suggested that current provisions regulating SMSF related party acquisitions are insufficient to mitigate the risk of transaction date and asset value manipulation to illegally benefit the SMSF or a related party. These changes are to make a more level playing field and to increase transparency in the transfer of assets involving SMSFs.

As such, the review recommended that acquisitions and disposals of assets between related parties and SMSFs should be conducted through an underlying market, or, where an underlying market does not exist, be supported by a valuation from a suitably qualified independent valuer.

These amendments enact those recommendations at nil financial impact.

The committee notes the views of submitters, particularly the Law Council, in relation to the amendments contained in schedule 4. However, the committee is persuaded by Treasury's responses to these concerns that the schedule is a proportionate response to the issues raised. The committee also notes the consultation undertaken by Treasury in drafting the legislation and remains convinced that the amendments will strengthen further supervision regime around Australia's superannuation industry.

Schedules 5 and 6: loss carry-back tax offset

This initiative is of great interest to companies in my local area and, I expect, around the entire nation. It is a wonderful incentive provided by this government. Schedules 5 and 6 formally introduce loss carry-back for companies into the income tax law.

The introduction of loss carry-back implements recommendation 31 of the 2010 Australia's Future Tax System Review, which stated that 'companies should be allowed to carry back a revenue loss to offset it against the prior year's taxable income, with the amount of any refund limited to the company's franking account balance'.

It is also in line with the recommendations of the Business Tax Working Group made in its final report on the tax treatment of losses, which found that loss carry-back would be a worthwhile reform in the near term. Here it is delivered.

The committee notes the views of Virgin Australia in relation to this amendment but remains satisfied that the quantitative cap on the losses that can be carried back is an effective and appropriate means to target the measure at small and medium enterprises—which are so common right across this country; the biggest employer of local people in my area is the small and medium enterprise sector—and recognises that these businesses generally do not have the same access to losses as large companies and consolidated groups with diversified activities. This is a vote for small and medium enterprises to assist them with their rises and falls in profit over a number of years to make sure that they are sustainable and continue to create and grow their business and the jobs that go with them.

These amendments are the product of extensive and ongoing consultation between industry and government. For these reasons and for the improvements that they bring to our economy, the amendments should be passed.