Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

by leave—I table a further supplementary explanatory memorandum relating to the government amendments and requests for amendments to be moved to this bill. The memorandum was circulated in the chamber on 3 December. I move government amendments (1), (2), (6) and (7) on sheet RG297:

(1)    Schedule 1, item 4, page 4 (line 10), after “amount he or she has received”, insert “(and interest, in some cases)”.

(2)    Schedule 1, item 16, page 7 (line 10), after “claim the amount”, insert “(and interest, in some cases)”.

(6)    Schedule 1, item 35, page 24 (line 30) to page 25 (line 3), omit subsection 307-142(3), substitute:

        (3)    The ^*taxable component is so much of the payment as is attributable to either or both of the following:

             (a)    so much of the amounts paid to the Commissioner under subsection 17(1) or 20F(1) of that Act in respect of the person as would, if those amounts had instead been paid to the person as ^*superannuation benefits, have been the taxable components of those superannuation benefits;

             (b)    subsection 20H(2A) of that Act (which is about interest payable in certain circumstances).

(7)    Schedule 1, item 37, page 26 (lines 1 to 7), omit subsection 307-300(3), substitute:

        (3)    The element untaxed in the fund is so much (if any) of the ^*taxable component as is attributable to either or both of the following:

             (a)    so much of the amounts paid to the Commissioner under subsection 17(1) or 20F(1) of that Act in respect of the person as would, if those amounts had instead been paid to the person as ^*superannuation benefits, have been the elements untaxed in the fund of the taxable components of those superannuation benefits;

             (b)    subsection 20H(2A) of that Act (which is about interest payable in certain circumstances).

That the House of Representatives be requested to make the following amendments—

(3)    Schedule 1, item 16, page 13 (after line 36), after subsection 20H(2), insert:

     (2A)    The Commissioner must also pay to the person, fund or legal personal representative the amount (if any) of interest worked out under subsection (2B), if the Commissioner is satisfied that:

             (a)    the person is (or was just before dying) an Australian citizen or, under the Migration Act 1958, the holder of a permanent visa; and

             (b)    after 30 June 2007 either:

                   (i)    the person left Australia; or

                  (ii)    the person was, under the Migration Act 1958, the holder of a temporary visa.

      (2B)    Work out, in accordance with the regulations, the amount of interest:

             (a)    on so much (if any) of the excess as is attributable (directly or indirectly) to one or more amounts paid to the Commissioner under subsection 20F(1) and not to payments to or by the Commissioner under section 17; and

             (b)    at a rate equal to the annual yield on Treasury bonds with a 10-year term or, if another rate is prescribed by the regulations, that other rate.

Note:   The regulations may provide for various matters relevant to working out the interest, such as working out the periods for which particular rates apply to particular amounts of principal (which will affect any compounding of the interest, among other things).

      (2C)    Regulations for the purposes of subsection (2B) may prescribe different rates for different periods over which the interest accrues, including a nil rate for any period starting when the person turns 65. This does not limit the ways in which the regulations may provide for working out the amount of interest under that subsection.

(4)    Schedule 1, item 16, page 14 (line 9), omit “excess”, substitute “total of the excess and any interest that would be payable under subsection (2A) apart from this subsection”.

(5)    Schedule 1, item 16, page 14 (line 16), omit the formula, substitute:

Statement of reasons: why certain amendments should be moved as requests—

Section 53 of the Constitution is as follows:

Powers of the Houses in respect of legislation

53. Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law.

The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government.

The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people.

The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modifications.

Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws.

Amendments (3), (4) and (5)

The effect of these amendments is to make interest payable by the Commissioner of Taxation. They are covered by section 53 because they increase the amount payable under the standing appropriation in section 16 of the Taxation Administration Act 1953.

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000—

Amendments (3), (4) and (5)

The Senate has long followed the practice that it should treat as requests amendments which would result in increased expenditure under a standing appropriation, although this interpretation is not consistent with other elements of the established interpretation of the third paragraph of section 53 of the Constitution. This has nothing to do with the introduction of bills under the first paragraph of section 53.

If it is correct that these amendments require the Commissioner of Taxation to make interest payments which will be payable from a standing appropriation, it is in accordance with the precedents of the Senate that the amendments be moved as requests.

I do not intend to speak for very long because the amendments are short and concise. Obviously I will have a few words to say about the amendments themselves.

Since we last debated this matter and were about to move to a vote on Senator Xenophon’s amendments, there has, fortunately, been a reflection and consideration of these matters. The calculated cost of Senator Xenophon’s amendments was up to $860 million, as advised by Treasury, over the forward estimates. However, we did accept and reflect on the contributions of Senators Bushby and Xenophon. As I indicated, I think the difficulty that Senator Bushby faced—and I accept that his in principle attitude raised some concerns—was that the bill we are now considering was Liberal Party policy. Senator Xenophon is of course a newly elected senator and he had not given a policy commitment on this particular piece of legislation. Senator Xenophon’s issues were similar to—though not exactly the same as—Senator Bushby’s. The government has considered the points that Senators Bushby and Xenophon have made and we have been able to accommodate at least some of those concerns.

The concerns expressed, particularly by Senator Xenophon, about issues going to retrospectivity and returning temporary residents was something that the government and I did think about following the debate. I acknowledge Senator Xenophon’s positive contribution. Following discussions with Senator Xenophon, we are able to accommodate in part—and I accept that it is only in part—the in principle concerns that he expressed relating to the issue of temporary residents who return to Australia. There is a category of people who leave the country, having been temporary residents, and then return as permanent residents. Many of those people who return as permanent residents ultimately take out Australian citizenship.

Given that one of the principles under discussion was that the Australian system should not confer a benefit on non-Australians, the government considered that it was reasonable that, where a temporary resident leaves Australia, effectively leaves their money here and that money is moved over into the ATO account, and then that temporary resident comes back to Australia as a permanent resident, they should not to penalised. The approach that we have come up with is that if a temporary resident returns to Australia, having elected to leave their money in the Australian system, they should not be penalised. Where a former temporary resident returns to Australia on a permanent visa, their money will be transferred back to the fund of their choice. In addition, the government will pay accrued interest at the long-term government bond rate and there will be no administration charge. We think that having no additional charges and the payment of the long-term bond rate is a pretty reasonable accommodation for this group of people. The cost will be approximately $7.5 million over the forward estimates.

We considered this to be a positive recognition of, and an attempt to accommodate, the concerns that have been raised by senators while not fundamentally threatening revenue, which is obviously very important as well. With those remarks, I want to thank all the senators who have contributed to reaching this position. I want to thank the opposition and Senator Xenophon for the very positive discussions we have had on this matter since we last discussed it.