Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Economics, I present the committee's advisory report incorporating a dissenting report on the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013 together with the minutes of proceedings and I ask leave of the House to make a short statement in connection with the report.

Leave granted.

The committee supports the passage of the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013 which makes important and beneficial taxation and superannuation changes. The committee also recommends that the Treasury undertake further consultation with industry groups on an aspect of schedule 5 of the bill.

There are eight schedules in the bill. The committee did not receive any submissions on schedules 2, 3, 4, 7 and 8. The report focuses on issues raised in the other schedules—1, 5 and 6. Schedule 1 defines a 'documentary' for the purpose of accessing film tax offsets and makes explicit that game shows are not eligible programs. Currently, there is no definition of a documentary in the Income Tax Assessment Act 1997. The definition of 'documentary' to be inserted is based on the Australian Communications and Media Authority Guidelines, as was used by Screen Australia prior to the Lush House case. In the committee's view, it is a reasonable response by the Australian government to reinstate the definition that Screen Australia had previously used in administering the producer offset. The committee noted industry stakeholder concerns that the definition lacks flexibility. The committee believes there is a need for ongoing dialogue between Screen Australia and the industry to ensure that the application of the definition in schedule 1 remains responsive to the evolving documentary genre.

Schedule 2 exempts from income tax the ex-gratia payment made to people affected by natural disasters in Australia during June 2011-12 and 2012-13. It is warranted to extend these disaster assistance plan payments and their tax exempt status to New Zealand citizens holding non-protected special category visas who were affected by these disasters.

Schedule 3 enables eligible businesses to continue to pay GST instalments if they subsequently move into a net refund position. It will allow businesses to continue to make their business activity statements annually and retain the cost advantage of not having to submit a quarterly statement. Entities that are not paying GST by instalments and are already in a net refund position remain ineligible to use the instalment option.

Schedule 4 adds six entities to the list of deductible gift recipients, making donations to these organisations tax deductible. Schedule 5 will provide a legislative basis for identifying and merging multiple superannuation accounts within the same fund. Many super funds are already performing these mergers. Groups who participated in the inquiry supported the intent of schedule 5 to reduce the amount affected members pay in multiple sets of administration fees and insurance premiums and consequently increase retirement savings.

However, some industry groups expressed concern that the wording of the proposed subsection 108A(1)(c) could place undue liability on trustees by obligating them to examine each individual member's best interests rather than on a general trust fiduciary law basis, which is understood as acting in the collective best interests of members. The committee's view is that schedule 5 is making an important change to help super members maximise their retirement savings but recommends further Treasury consultation with industry groups to ensure that undue liability is not being inadvertently placed on trustees who are working in good faith for the benefit of their members. The committee also urges the Australian Prudential Regulation Authority to provide funds with guidance on circumstances which should trigger individual consideration of what constitutes a member's 'best interests'. Where funds are dealing with complex cases, the committee believes trustees should seek input from the affected members.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

by leave—I will be brief. In terms of additional comments to the committee report, coalition members of the committee raised some concerns we had with respect to two schedules of the bill. In broad brushstrokes—and with emphasis on the word 'broad'—coalition members would agree with a number of the assertions made by the committee chair but, specifically with respect to schedule 1, coalition members felt it necessary to highlight that it was very clear there had been for all intents and purposes no consultation with industry with respect to the proposed changes as outlined in this schedule 1. Whether it was SPAA, the Screen Producers Association of Australia, or others that appeared on the day, it was clear that the first they really knew about it, the first opportunity that industry had with respect to the proposed changes, was when the draft bill itself had been put into the public domain. It would appear they took the view that it was, for all intents and purposes, a foregone conclusion. Coalition members highlight the fact that this is hardly the way to conduct good public policy and on that basis made some comments in our additional comments.

Schedule 6 is the super co-contributions. The reality is—and coalition members believe Australians recognise this but we want to highlight the fact—that the Gillard Labor government is again seeking to cut government super co-contribution benefits for low-income earners. As much as the Labor Party like to make out that they are a friend of low-income earners, the simple reality is that there have been so many changes on so many occasions that now it is clear that they are far from being a friend.

After promising not to make any changes to superannuation in the lead-up to the 2007 election there have been, in fact, numerous changes invariably designed to undermine incentives for people to voluntarily save more toward their retirement. As well as reducing the concessional contribution caps, the government has cut super co-contribution benefits for low-income earners and imposed additional taxes of more than $8 billion on people's retirement. They have reduced concessional contribution caps from $50,000 and $100,000 per year, depending on your age, under the previous coalition government down to $25,000 per year across the board—a substantial reduction. This means anyone wanting to save more super per year than that low threshold has to pay the top marginal tax rate.

Targeting low-income earners saving for their retirement, Labor has also already reduced super co-contribution benefits for low-income earners from a maximum of $1,500 down to $1,000, while also reducing the matching rate from 1.5 down to one to one. This legislation proposes to cut the maximum super co-contribution benefit for low-income earners again, this time in half, down to just $500,with a similarly reduced matching rate halved from one to one down to 0.5 to one. Overall, the Labor government has cut super co-contribution benefits for low-income earners by more than $3.3 billion by far.

In summary, coalition members want to highlight and make very quickly on the record that this is not a government that is committed to low-income earners, despite all the rhetoric to the contrary. The simple and inescapable conclusion to reach is that, beyond the headlines, this legislation is going to make it tougher for low-income earners, not easier.