Tim Storer (SA, Independent) Share this | Hansard source

I move amendment (1) on sheet 8454:

(1) Schedule 2, item 2, page 6 (line 12), omit "either:", substitute "if you do not satisfy the maximum net asset value test (see section 152-15)—either:".

Through discussions with Business SA, and as per the discussions of their members with Treasury, my amendment deals with a mischief that the bill intended to address where a tax-paying individual shareholder in a company with significant assets and turnover does not satisfy the maximum net asset value test but qualifies for the small business CGT concessions under the $2 million turnover test. This might be achieved where a shareholder carries on a business in their own right that has a turnover not exceeding $2 million and that is entirely independent of the business of the object company—essentially, the taxpayer starting unrelated small businesses to access the concessions. However, the proposed changes in the bill go too far and include taxpayers who should sit outside the group of taxpayers the government wants to tighten integrity measures for.

While there may be outcomes under existing law which are inequitable, the proposed changes punish the many for the sins of the few. This mischief identified could be easily overcome without creating a disincentive for collaborative investments by requiring that the shareholder satisfies the maximum net asset value test and cannot rely on the $2 million turnover test. This is a simple way of addressing this mischief without it creating unintended consequences. Therefore, my amendment on sheet 8454 is a simple omission in schedule 2, item 2, page 6, line 12 of 'either' and substituting it with 'if you do not satisfy the maximum net asset value test (see section 152-15)—either:'. These new restrictions mean that they do not apply to genuine small businesses that do satisfy the maximum net asset value test. Therefore, I seek the Senate's approval of this amendment.