Slade Brockman (WA, Liberal Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021. I will spend most of my time this evening speaking on the deductible-gift-recipient-status element of this bill. The bill has two schedules. I note that the second schedule, regarding offshore banking units, is largely uncontroversial and is agreed by everyone in this chamber. I hope that is the case. So I am not going to spend a lot of time dwelling there. However, I will address some of the issues just raised by Senator McAllister and I will remind the Australian people again that, a little more than 12 months ago, we were entering a pandemic the likes of which we had not seen for 100 years, the economic outcomes of which we could not guess.

The level of uncertainty in those first few months of last year was extraordinary. In setting up the JobKeeper scheme, the government did allow businesses to base it on what they felt was going to happen into the future. This was done for a very good reason. In situations like this, confidence is absolutely key to bouncing out of the negative impacts. It is key to maintain high levels of confidence to maintain economic activity. By being able to maintain a link to their employees, companies and business leaders can have the confidence to actually bounce out of the negative impacts of a one-in-100-year global event of very significant economic proportions. That is wilfully ignored by those opposite. Confidence was, right from the beginning, always going to be key. By closing the borders rapidly and early, as the Morrison government did, there was confidence that we would protect the health of Australians. Acting in a strong way to protect businesses' economic underpinnings and to protect the links of those businesses with their employees was a part of sustaining that confidence in the Australian economy, in the business sector and in the hardworking Australians who wanted to stay connected to those jobs, who wanted to stay connected to their employers.

It was a compact with business. They had to make a projection as to what they thought the negative impact on their business would be. Did all those businesses get that projection correct? No, they did not. In fact, this government took swift action in doing such things—difficult things, things that others on the international stage said that we should not do—like closing our international border very quickly, at first to Wuhan, then to wider China and then to other affected areas around the globe before finally, unfortunately, having to close our international borders to pretty much the rest of the world. In doing so, obviously that was always going to have a dramatic impact on the economy. Add to that the internal lockdowns that we faced over a period of time, which unfortunately are still going on today, and we have a rolling economic impact. We have government acting strongly and decisively, in the face of an economic crisis the likes of which the nation has not seen since the Great Depression, to allow those businesses to estimate where they would be. In good faith, we said: 'You do the right thing. You keep your employees connected to this workplace, and we will underpin that through the JobKeeper program.' And that is what occurred.

Now, subsequently, in what is quite frankly a bit of a political stunt that those opposite obviously revel in, they want to seek to look at those rules retrospectively. I think that the government made it very clear, right upfront, what the rules of that initial phase of JobKeeper were. They changed over time. That was done at a particular point in time in a particular set of circumstances, and the rules were very clear. This government stands behind them. I will get on to deductible gift recipient status, but I think the economic underpinning that we put into our society not only protected jobs and our for-profit economic sector, if you like; it also did an extraordinary amount to allow our not-for-profits, our charity sector and our deductible-gift-recipient-status organisations to continue their work. It kept a level of activity, certainty and confidence in the entire Australian economy, which stretched not just through the for-profit sector but also into the not-for-profit sector, into our civil society. It allowed Australians to continue, to a great degree, supporting the charities and organisations that they wished to support.

I do wish to get to the actual provisions of this bill. The bill makes a number of changes to tax law to implement reforms to the administration and oversight of organisations with DGR, deductible gift recipient, status. DGR organisations are those which can receive donations that are tax deductible. If a donation is tax deductible, donors can deduct the amount of their donations from their taxable income when they lodge their tax returns. The Australian Taxation Office is responsible for decisions on DGR endorsement.

Schedule 1 of the bill amends the Income Tax Assessment Act 1997 to require non-government entities seeking endorsement as a DGR to be a charity registered with the Australian Charities and Not-for-profits Commission or be operated by a registered charity. Ancillary funds and specifically listed entities will continue to be exempt from this requirement. The requirement to be a charity already applies to the majority of the general DGR categories in subdivision 30-B of the 1997 tax law. Currently, for the remaining 11 DGR categories, the requirement to be a registered charity or government agency does not need to be satisfied for the fund, authority or institution to be entitled to DGR endorsement. As charity registration is not a precondition for DGR endorsement for these categories but is for other categories, there can be inconsistent governance and reporting requirements for these DGRs. Making charity registration a precondition for DGR endorsement across all the general DGR categories will improve the consistency of regulation, governance and oversight of DGRs while also reducing unnecessary compliance costs.

When the amendments take effect, DGR applicants will generally have to register as a charity with the ACNC before applying for DGR endorsement. There will be streamlined processes to allow DGR applicants to lodge a single application with the ACNC seeking charity registration and indicating their intention to be endorsed as a DGR or as a DGR for the operation of a fund, authority or institution. Once the ACNC is satisfied that the applicant is entitled to be registered as a charity, the ACNC will pass on the necessary information to the ATO to assess the applicant's entitlement to DGR endorsement.

The amendments include a 12-month transition period, which will provide non-charity DGRs with the time to meet the charity registration without losing DGR status. Eligible DGRs may also have access to an additional three-year transition period. Improved consistency, governance and oversight of DGR entities will ultimately help support continued public confidence and support the sector and DGR entities. I think this last point is absolutely imperative for those out there listening to this debate to understand. There is a level of confusion within the general public about what all these various categories mean—what a DGR is versus what a charity is. Clarifying this and making it very clear that everyone has to fit within this governance framework will enhance the way that charities are viewed, will enhance the status of those organisations within the general public's eye, and will actually improve confidence and improve the sector over time.

I will just return to where I started. This government is committed to having a very strong charities and civil society. It's why we have done many of the things that we have done over the last 12 months. It's good to see that this legislation is before us now. It's very clear that, contrary to what those opposite have been saying for the last few weeks, this government is capable of doing many things at once and doing many things very well. So, with those few short comments, I thank you very much.