Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

For similar reasons to those which I outlined in relation to section 36A, I indicate that the government is not supporting amendment (5). I have a couple of points about it. There is the retrospectivity issue, which applied in relation to the previous amendment, that I raised with the Senate. I would also make the point that the proposal to make a fund non-complying, particularly given the 60 days of commencement, given that the amendment that the Greens and the opposition supported has actually passed, is an extremely harsh penalty. Senator Hanson-Young may be aware that when a fund is made non-complying all of its assets plus the income for the current year are taxed at the top marginal rate, which is currently 45 per cent. I also indicate that part 5 of the SI(S) Act sets out relevant provisions in relation to noncompliance. Broadly, a fund must knowingly breach a specified provision in the SI(S) Act, and there is a culpability test which the fund must fail. I have also been advised that the practical effect of making a fund non-complying could be that the relevant fund would become insolvent, which is obviously a significant negative policy consequence. I am happy to provide more information to Senator Hanson-Young, if she wishes, about the government’s position, but I indicate that we are opposing this amendment.