Zed Seselja (ACT, Liberal Party, Assistant Minister for Treasury and Finance) Share this | Link to this | Hansard source

I table a supplementary explanatory memorandum relating to the government amendment to be moved to this bill. Schedule 2 is opposed in the following terms:

(1) Schedule 2, page 27 (line 1) to page 29 (line 23), to be opposed.

The government is tabling a parliamentary amendment in the Senate to remove schedule 2, Intangible asset depreciation, from the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017.

Schedule 2 to the bill contained amendments to the Income Tax Assessment Act 1997, to allow taxpayers to choose to self-assess the effective life of certain intangible depreciating assets, rather than using the statutory effective life for such assets specified in the tax law. By omitting schedule 2 the bill will no longer allow taxpayers to avail themselves of this option. Given the application date of 1 July 2016 and the likely further delay in the passage of the bill, the government decided not to proceed with the measure, in order to eliminate the current uncertainty for taxpayers. The amendment will ensure the remaining measure in the bill will be legislated without further delay.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I won't delay the chamber for very long. I just want to get on record very quickly why the Greens voted against the second reading. Obviously, we don't have any time today to go into this in detail because of the guillotine.

We have significant issues with both parts 1 and 2. The first is the concept that tax losses from previous income years can be carried forward under a 'same business' test. I understand the difference between previous statements around continuity of ownership tests, but we are still not convinced that this is not going to help to supercharge phoenixing in this country. Tax losses themselves can be an asset to many companies, as I'm sure anyone in here who understands finance is aware. I don't see how this doesn't provide a further incentive for phoenixing. So we are not convinced about that. As far as the depreciation of intangible assets goes, we think it's a recipe for disaster to give any leeway or flexibility to companies to set their own depreciation schedules, especially for complicated aspects of depreciation. We didn't feel like we had comfort on either of those two measures and that's why the Greens opposed the second reading of this bill.

The CHAIR: The question is that schedule 2 stand as printed.

Question negatived.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.