Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

in reply—I thank the senators who have taken part in the debate on the Tax Laws Amendment (2008 Measures No. 4) Bill 2008. Schedule 1 provides relief from capital gains tax for policyholders of private health insurers who convert from being a not-for-profit insurer to a for-profit insurer by demutualising. The amendments will facilitate the demutualisation of private health insurers and will apply from 1 July 2007. These amendments disregard any capital gains or losses that arise to policyholders under the insurer’s demutualisation.

With regard to schedule 2, the government will proceed with the reversal of two of the family trust changes introduced by the previous government in 2007. These amendments restore the previous definition of ‘family’ in the family trust election rules by limiting the range of lineal descendants who can access benefits associated with tax losses. The amendments also prevent family trusts from making a variation to the test individuals specified in the family trust election other than specifically in relation to the 2007-08 income year or in the case of a marriage breakdown. These changes both reduce the scope for family trusts to be used to lower income taxes and demonstrate the government’s commitment to ensuring that every single cent of new spending for the coming year has been more than met by savings elsewhere in the budget. The government will not be supporting the opposition’s amendment.

Finally, this bill implements various minor amendments to the law and also some general improvements of a minor nature. These amendments reflect the government’s commitment to the care and maintenance of the tax system. Again, I would like to thank those who have participated in this debate.

Question agreed to.

Bill read a second time.