Ken Wyatt (Hasluck, Liberal Party, Assistant Minister for Health) Share this | Link to this | Hansard source

I move:

That the amendments be agreed to.

By leave, I wish to make a short statement. The Turnbull government is committed to ensuring everybody and everyone has to pay their fair share of tax on what they earn here in Australia, especially large corporates and multinationals. That is why we have implemented these important measures that takes steps to restore tax neutrality in levelling the playing field for Australian businesses.

Schedule 1 applies the goods and services tax to digital products and services imported by Australian consumers. It levels the playing field, ensuring that GST will be applied equally to the sales of digital products and services to Australian consumers, no matter where the seller is based. GST will be applied using a vendor registration model, where overseas vendors selling digital products or other services such as apps and downloads of digital content will be required to register, collect and remit GST on their sales to Australian consumers.

The aim of the measure in schedule 2 is to ensure that cross-border business-to-business transactions do not unnecessarily get caught up in Australia's GST system. The government amendments agreed to in the Senate will allow parties to opt out of schedule 2 by agreement, effectively allowing non-resident businesses to remain connected with Australia's GST system, if that is their preference. The amendments will ensure that these transactions are not subject to more complicated GST treatment than they face currently. This issue was brought to the government's attention after the bill was introduced to the parliament. The measure ensures that fewer non-residents are unnecessarily drawn into Australia's GST system, reducing the cost of compliance for business and simplifying administration for the Australian Taxation Office.

Schedule 3 of this bill makes key reforms to farm management deposits to improve Australia's tax laws for primary producers. Farm Management Deposits scheme allows primary producers to set aside pre-tax income from primary production in a special account that can be drawn on in a future year. This schedule doubles the amount that can be held in a farm management deposit to $800,000 in recognition of the increasing scale and cost facing many modern farming businesses. The change also allows a primary producer facing severe drought to withdraw all or part of their deposits early, when they most need them without losing the tax benefit. These changes provide primary producers with further flexibility to use farm management deposits as offset accounts for other business loans they hold. Currently, farm management deposits may not be used as mortgage or other interest loan offset. The government is removing these restrictions to allow farm management deposits to be used as an interest loan offset. The farm management deposit changes were announced in the agricultural competitiveness white paper on 4 July 2015 and are the product of extensive stakeholder feedback and consultation.

The amendments to GST and the farm management deposits are both important measures to the Turnbull government's economic plan for jobs and growth.

Question agreed to.