Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Hansard source

First, I would like to thank those senators who have contributed to this debate. The Tax and Superannuation Laws Amendment (2014 Measures No. 5) Bill 2014 represents another chapter in the government's commitment to implement our Economic Action Strategy and to repair the budget. Our Economic Action Strategy is about setting Australia up for the future. It is about making some tough decisions now so we can build long-term prosperity, so we can make sure Australia has a social safety net which is strong and sustainable, and so future governments have the resources available to allow them to make decisions that are fair yet compassionate for the Australia people.

We have outlined a way forward to achieve this goal. This includes reprioritising government spending to spend less on consumption now and more on investing in our future. It includes ensuring that taxpayers' funds are spent wisely; taxpayers deserve value for money from their government. It also includes an expectation that everyone will contribute to budget repair. Each measure contained in this bill takes us a step further on our path to achieving this goal.

Collectively, the measures in this bill will return around $1.4 billion to the budget. Separately, each measure in this bill tells its own story about different groups of people. Schedule 1 abolishes the mature age worker tax offset. We understand that older Australians face challenges when re-entering the workforce, and data shows that older Australians face high rates of labour market disadvantage. We would like to change this. Older Australians want to work and we need them to work. The intergenerational report that the Treasurer will release later this week will demonstrate the importance of workplace participation, whether by older Australians or by women returning to work after having children, to future policy. A prosperous Australia depends on everyone contributing to a strong, sustainable economy, and older Australians just need to be given this opportunity to contribute.

But the mature age worker tax offset does not help older workers in getting a job; it merely reduces the tax that might be payable for those who are already working. Abolishing it will save the Australian taxpayer around $760 million over the forward estimates period. Our aim is to assist older workers to transition back into work. Once a person gets into the workforce, they are likely to stay there. This is why, from 1 July 2015, we will provide an incentive of up to $10,000 to employers who hire an older job seeker. This will be delivered through the Restart program. This payment will help older job seekers to get a job and keep the job. This is just one of the ways the government is working to assist older Australians.

Schedule 2 abolishes the seafarer tax offset. This is, sadly, another failed Labor policy. It provides a refundable tax offset to eligible shipping companies for 30 per cent of the salary, wages and allowances paid to Australian resident seafarers who are employed to undertake overseas voyages on qualifying vessels. Companies are eligible to claim the seafarer tax offset if the company employs the seafarers on such voyages for at least 91 days in the income year. The rationale for the introduction of the seafarer tax offset was to stimulate opportunities for Australian seafarers to be employed on overseas voyages and to gain maritime skills. The government is abolishing the seafarer tax offset because it is not achieving its policy intent.

There are significant differences between Australian wages and conditions and those of some other countries. For example, under the Seagoing Industry Award 2010, the minimum basic wage for an able seaman is $96,500, whereas under the International Transport Workers' Federation Uniform Total Crew Cost Collective Agreement the comparable wage is $23,303. The seafarer tax offset is unlikely to be sufficient to redress these differences.

The companies that employ Australian seafarers for overseas voyages typically have other reasons for doing so, such as English language skills and, particularly, the knowledge of Australian ports and coastline. Being a refundable tax offset of 30 per cent of the gross payments the company makes to the seafarer, the benefit may be small relative to the scale of shipping companies. The seafarer tax offset has not resulted in any appreciable increase in the employment of Australian seafarers. Its repeal will return $12 million to the budget over the forward estimates.

Schedule 3 reduces the tax offset available under the Research and development tax incentive by 1.5 percentage points for income years commencing on or after 1 July 2014. This was a difficult decision. However, repairing the budget must be done as fairly and as equitably as possible. It is only fair that everyone makes a contribution. The changes to the R&D tax incentive are simple and straightforward. The changes will not affect the eligibility of companies for the incentive, the way that companies claim the incentive or the administration of the incentive more generally. The R&D tax incentive will continue to provide generous, easy-to-access support for thousands of eligible companies in all sectors of the Australian economy. This measure will provide savings of around $620 million over the forward estimates period.

The government remains committed to each measure contained in the bill. However, we understand from the debate that opposition senators have foreshadowed amendments to the bill. The government will agree to opposition amendments to excise schedules 2 and 3 from the bill. These schedules remain crucial to the government's economic action strategy and our commitment to budget repair, and we will seek to reintroduce these schedules at a later date. The government will remove these schedules in order to assist the prompt passage of schedules 1 and 4 of this bill.

This brings me to the final measure of the bill. Schedule 4 adds three new deductible gift recipients. This will allow Australian Schools Plus; the East Africa Fund, which operates the School of St Jude; and the Minderoo Foundation Trust to receive tax-deductible donations. Australian Schools Plus is a vehicle for donations to be collected from the public for disadvantaged schools. This policy seeks to address the perception that these schools find it relatively difficult to attract donations. The School of St Jude provides free, high-quality education to children in Tanzania who would otherwise be unlikely to complete their schooling. Over 2,000 students from various regions and 35 different tribal backgrounds attend the school of St Jude, and over 1,400 of these students are boarders. Students receive meals from the school as well as annual health check-ups. The school monitors the general welfare of the students and can help students with issues they may be experiencing at home.

The Minderoo Foundation Trust operates three programs: the Walk Free Foundation, GenerationOne and Hope for Children Australia. The Walk Free Foundation seeks to eliminate modern-day slavery by supporting the highest quality research, enlisting business and raising funds to drive change in those countries and industries where slavery is most prevalent. Generation One is a national movement bringing together all Australians with the goal to end the disparity between Indigenous and non-Indigenous Australians through employment and to break the cycle of disadvantage. Hope for Children Australia supports orphans, vulnerable children and families affected by HIV AIDS and poverty in Ethiopia. The project aims to help orphaned and vulnerable children reach their full potential. Hope for Children initiatives include helping children gain an education, providing family health support and assisting families to pursue micro-enterprise initiatives.

The measures contained in the bill present a careful and reasonable approach to reprioritising government revenue. They bring us a step closer to reducing our debt and a step closer to a stronger, better and more compassionate Australia. I commend this bill to the Senate.

Question agreed to.

Bill read a second time.