Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

I wish to address the six schedules that are in Tax Laws Amendment (2009 Measures No. 5) Bill 2009, and mention briefly their history and intent. It is often very difficult for people to follow these omnibus tax bills. The bill was introduced into this place on 16 September 2009 and contains various technical aspects amending the tax law. I make clear at the beginning that the coalition will be supporting the passage of this bill. I will now address the six schedules.

Schedule 1 makes a retrospective change to the GST law and will be effective from the commencement of the GST from 1 July 2000. The need for this schedule was brought about by a Federal Court decision delivered on 12 December last year that contradicted the intent of the GST law relating to representatives of incapacitated entities. That decision was inconsistent with the original intent of the provisions relating to GST liability of an incapacitated entity with an appointed representative. Because it was also inconsistent with how taxpayers had operated so far, the changes in this schedule are retrospective. This was acknowledged by the then Assistant Treasurer in his press release of 6 February this year, where he committed the government to introducing legislation to clarify the GST law in this area.

Schedule 2 of this bill amends the taxation of financial arrangements, TOFA, regime as it relates to the provisions regarding pay as you go, or PAYG, obligations. Schedule 2 follows the passage of legislation through parliament that was supported by the coalition earlier this year, implementing TOFA stages 3 and 4. Those measures were the final stages of the reforms that began implementation under the former coalition government. I remember it well, and it followed the implementation of stage 1 in 2001 and stage 2 in 2003. It has been a very long process.

This schedule follows extensive consultation by Treasury and the Australian Tax Office with industry stakeholders, and will ensure that PAYG payment obligations are not unintentionally decreased. Schedule 2 also contains a provision for a catch-up payment for those entities that have already made a decreased PAYG payment as a result of the commencement of the TOFA regime.

Schedule 3 of this bill amends the tax law to ensure that the outer regional and remote payments made under the Helping Children with Autism package are exempt from income tax. Again, as in schedule 1, because this was the original intention of the payments, the amendments in this schedule will be effective from the commencement of the Helping Children with Autism Package from the 2008-09 income year.

Schedule 4 of this bill has a similar amendment to schedule 3. Schedule 4 makes payments made under the Continence Aids Assistance Scheme exempt from income tax. That scheme replaces the former coalition government’s program that provided continence products directly to eligible recipients with financial assistance payments.

Schedule 5 of this bill extends the interest withholding tax exemption to debt issued by the Commonwealth. Last year the coalition supported the passage of legislation extending the exemption to debt issued in Australia by state and territory governments. This schedule merely extends the existing exemption to debt issued by the Commonwealth.

The final schedule, schedule 6, relates to the tragic bushfires that occurred in Victoria back in February. Australians donated very generously to the Victorian Bushfire Appeal to help those affected communities to recover and rebuild. Those donations, along with the strong community spirit of these towns, are helping these people to rebuild their towns and communities, and so schedule 6 of this bill allows the Victorian Bushfire Appeal Trust to undertake a range of recovery assistance projects without any risk of the Australian Red Cross Society losing its charitable tax status. The amendments in schedule 6 will allow the Victorian Bushfire Appeal Trust to use the generous donations made by Australians in a wider variety of ways than would ordinarily be deemed as for charitable purposes. This will mean that the Victorian Bushfire Appeal Fund will be able to undertake projects and activities that will provide broader benefits to those communities tragically affected by the Victorian bushfires, as long as the projects are widely accessible and that any commercial value is only an incidental one.

Schedule 6 will also allow the Victorian Bushfire Appeal Fund to provide long term assistance to orphans aged under 18 years; to reimburse individuals or charitable organisations for eligible activities; to provide assistance to individuals whose primary place of residence was destroyed by the bushfires; to provide up to $15,000 of financial assistance to individuals who are still living in transitional housing and to provide up to $10,000 of financial assistance to primary producers. This will mean that the generous donations made by Australians can be used to assist those whose lives, families and communities have been affected by the 2009 Victorian bushfires.

These amendments have an effective date of 29 January 2009 in order to cover the bushfires of Delburn. As I said at the outset, the coalition supports the measures in this bill, as we always do with sensible measures that improve the operation of the tax law. I commend the bill.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I thank Senator Coonan for her contribution and commend the Tax Laws Amendment (2009 Measures No. 5) Bill 2009 to the Senate.

Question agreed to.

Bill read a second time.