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Tuesday, 31 May 2011
Page: 5327

Mr TONY SMITH (Casey) (18:30): On behalf of the opposition, I rise to speak on the Tax Laws Amendment (2011 Measures No. 4) Bill 2011. It is a bill, like most tax law amendment bills—you would appreciate from your time in the House, Mr Deputy Speaker—that the coalition will not be opposing. I will take just a short period of time in the House to run through each of the four schedules that comprise this tax law amendment bill. This bill was introduced last week by the Assistant Treasurer. In his tabling speech, which I had the pleasure of hearing because I was in the House at the time, he outlined the government's approach to the four schedules. In the case of most of those they were budget announcements and therefore this legislation to update the relevant tax laws, and in some cases other laws, flows from that.

Firstly, schedule 1, as the minister outlined, reduces the quarterly income tax instalments for the 2011-12 income year for those taxpayers whose instalments are adjusted for the previous year's gross domestic product growth. Essentially the amendments reduce that GDP adjustment factor for 2011-12 from the set adjustment level of eight per cent down to four per cent. The effect of this measure, as the explanatory memorandum outlines, is obviously to reduce what would otherwise be the automatic amounts of the adjustment factor. In terms of revenue over the course of the forward estimates, the explanatory memorandum shows us on page 3 that, whilst there is a cost in this 2011-12 year, it is made up for in the 2012-13 year. So essentially this is a timing issue of benefit in a cash flow sense to those businesses, mostly small businesses, in the affected area.

The second schedule relates to the low-income tax rebate and its relationship with income-splitting arrangements. Essentially what this schedule does, and again it was announced on budget night, on 10 May, is remove the ability of minors—children under the age of 18—to use the low-income tax offset to offset tax due on their unearned income. This includes, of course, dividends, rent, royalties and all the other examples outlined in the explanatory memorandum and in the minister's tabling speech. This will apply as was outlined in the budget statements and on the budget press release from the night, and we are told that the financial impact will be $240 million in 2011-12 and $250 million in 2012-13 and 2013-14.

Schedule 3 relates to total and permanent disability policies. These amendments in schedule 3 essentially do two things. They firstly enable regulations to be made to prescribe a certain percentage of premiums for certain TPD insurance policies that can be claimed as deductions. As the explanatory memorandum tells us in clause 4, the amendments will also extend the current transitional relief for the deductibility of TPD insurance premiums to funds that self-insure their liability.

The final schedule relates to the definition of reportable employer superannuation contributions. Essentially what this does is to change the definition of reportable employer superannuation contributions in order to not include involuntary contributions for the purposes of assessing taxable income for the eligibility of government assistance. As all honourable members would know, particularly my colleague the member for Indi, salary-sacrificing arrangements are counted for the purposes of income in terms of qualifying for these benefits. That is obviously the case with superannuation. But what this legislation ensures is that, in circumstances where that contribution above and beyond those reportable limits is involuntary—that is, it is part of an agreement and it is something where by definition the employee does not have any control or choice—these involuntary contributions are not counted for the denial of assistance in that way. This was not part of the budget. I think it was announced by the former Minister for Financial Services and Superannuation back in June last year, almost a year ago. As I said at the outset, the opposition will not be opposing this legislation. I commend the bill to the House.