Carol Brown (Tasmania, Australian Labor Party, Assistant Minister for Infrastructure and Transport) Share this | Hansard source

I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill, the Treasury Laws Amendment (Refining and Improving Our Tax System) Bill 2023. Firstly, I would like to thank those senators who have contributed to this debate.

Schedule 1 to the bill amends the International Tax Agreements Act 1953, giving effect to the new tax treaty between Australia and Iceland. This treaty—the first between Australia and Iceland—is in our national interest. It will provide Australian individuals and businesses with increased opportunities to access capital and technology from Iceland by reducing tax on cross-border income and will provide greater tax certainty. It will also facilitate labour mobility, to strengthen our cultural ties with Iceland. The treaty builds on Australia's existing tax integrity measures designed to combat international tax evasion and avoidance, ensuring multinationals pay their fair share of tax.

Schedule 2 to the bill amends the law to exempt wholly-owned Australian incorporated subsidiaries of the Future Fund Board of Guardians—the Future Fund board—from corporate income tax. Currently, the Future Fund board is exempt from income taxes, but this exemption does not extend to its wholly-owned subsidiaries. Extending this exemption will remove the administrative burden associated with the payment of tax by these subsidiaries and the subsequent claiming of a refund by the Future Fund board. The legislation will not change the net position of either the Commonwealth or the Future Fund—that is, no income tax is collected by the Commonwealth from the Future Fund board.

Schedule 3 to the bill transfers administration of four unique deductible gift recipient, or DGR, categories to the Australian Taxation Office, the ATO, and repeals current provisions relating to the maintenance of departmental registers. These changes will streamline application and reporting requirements across the 52 DGR categories and reduce DGR approvals for the four unique categories from up to two years to around one month. Eligibility for DGR status is not intended to change as a result of this bill. Transitional provisions will apply so that organisations that are currently endorsed as DGRs under these categories will continue to be endorsed, so long as they continue to meet the existing eligibility criteria.

The government is proposing to make amendments to this bill to ensure that the transitional provisions operate as intended for overseas aid organisations. These amendments are consistent with the report of the Senate Economics Legislation Committee and recommendation 2 from the additional comments from the Australian Greens. The government has also noted recommendation 1 from the Australian Greens around the role of the Australian Charities and Not-for-profits Commission, the ACNC. The ACNC will continue its important role as a national regulator of charities. The ACNC has responsibility for registering organisations as charities, which continues to be part of the eligibility criteria for each of these four DGR categories.

Schedule 4 to the bill provides deregulatory benefits to small and medium businesses that engage with the fuel or alcohol excise system or import excise equivalent goods. Instead of the existing ability to apply for weekly or monthly reporting and payment, such businesses can also apply for permission to lodge and pay their duty quarterly. This measure will reduce administrative burdens and help small and medium-sized businesses with cash flow. The proposed amendment will commence on 1 July 2023. Eligible businesses with less than $50 million in aggregated turnover in an income year who pay fuel and alcohol excise or customs duty on excise equivalent goods will then be able to apply to the Commissioner of Taxation or the Inspector-General of Taxation to move to the new reporting schedule.

Currently, businesses are required to lodge and pay excise and customs duty on excise equivalent goods when goods enter home consumption unless they have permission to defer lodgement and payment. This permission can only be given for lodgement and payment weekly or, for certain eligible businesses, monthly. This new quarterly schedule will better align fuel and alcohol excise and customs duty on excise equivalent goods with other indirect taxes like GST on the business activity statement, or BAS.

Schedule 5 to the bill provides deregulatory benefits to retail and hospitality venues who repackage beer from bulk quantities into small containers for immediate retail sale. From 1 July 2023 this measure introduces a targeted exemption from alcohol excise licensing requirements for the repackaging of the first 10,000 litres of beer from kegs into non-pressurised containers of no more than two litres capacity for immediate retail sales at a particular premises in a financial year. Currently, businesses that package duty paid beer into these containers are required to hold a manufacturing licence for excise purposes and pay duty again, in effect paying double duty. These licences carry significant obligations which are more appropriate to entities fermenting, brewing and/or repackaging beer on a commercial basis in order to protect the lower alcohol excise rate of a keg beer; however, filling specified containers in retail settings does not pose this integrity risk. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.