Stephen Parry (Tasmania, Liberal Party) Share this | Hansard source

I indicate, as Chairman of Committees, that government amendment No. 8 on sheet CJ260 has been circulated as a request for the reasons given in the circulated statements. The amendment would enable regulations to be made that may then allow eligible entities to receive quarterly refunds of research and development tax credits rather than annual refunds. The amendments have no effect on the amount of the tax credit or offset but only on the timing of the refund, therefore the tax credits will be subject to reconciliation at the end of the financial year and any adjustments made then.

This scheme depends upon administrative action being taken under regulations to be made by the Governor-General. If under the regulations an entity fulfils the requirements, it will then be eligible to receive the quarterly tax credits. Thus, if there is an effect on a charge or burden on the people through increased appropriations, it occurs only after this rather convoluted process. The possible effect on the appropriation is therefore only indirect.

In the past the Senate has regarded only a very direct effect on an appropriation as an increase in a charge or burden on the people within the meaning of section 53 of the Constitution. It is also apparent that the amendment will not increase the total amount of offset credits to be paid. The precedents of the Senate do not support the amendment being moved as a request and it will, therefore, be treated as an amendment. With the concurrence of the committee the statement of reasons in relation to this matter will be incorporated into Hansard. There being no objection, it is so ordered.

The statement read as follows—

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.

Amendment (8)

The effect of this amendment is to allow the making of regulations that may increase the amount of expenditure payable out of the Consolidated Revenue Fund under the standing appropriation in section 16 of the Taxation Administration Act 1953. It is covered by section 53 because it may increase a "proposed charge or burden on the people".

Consequential amendments

The following amendment(s) are consequential on the amendments mentioned above:

amendment (1).

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

Amendment no. 8 would not be regarded as a request under the precedents of the Senate.

The effect of amendment no. 8 is to provide for the making of regulations which have the effect of changing the timing of the delivery of the research and development incentive to certain entities, through the introduction of quarterly tax credits.

The Senate has long held the view that only a very direct effect on an appropriation is regarded as an increase in a charge or burden (Odgers' Australian Senate Practice, 12th edition, page 296). Possible expenditure from the standing appropriation in the Taxation Administration Act 1953 on the basis of regulations being made which do not "clearly, necessarily and directly" affect that appropriation does not meet the test of directness.

Amendment no. 1, which is consequential on amendment no. 8, should be treated similarly by the Senate.