Mr HOCKEY (Financial Services and Regulation) (9:55 AM) —I move:

That the bill be now read a second time.

This bill amends the income tax law to give effect to the following measures:

Firstly,

Gifts

The bill amends the income tax law to give effect to announcements about gifts and related matters.

The bill will amend the income tax law to allow deductions for gifts made to certain funds and organisations. Amendments are also being made to ensure grants paid from the Katherine District Business Re-establishment Fund to eligible businesses in the Katherine region are exempt from income tax. A number of minor amendments to the gift provisions will also be made.

Secondly,

Amendments to the capital gains tax provisions

The bill proposes amendments to the Income Tax Assessment Act 1997 by inserting a rewrite of the capital gains tax rules about:

. Small business rollover and retirement exemption (including an extension to those provisions for land and buildings);

. Value shifts between companies under common ownership;

. Assets register entries that eliminate the need for business taxpayers to keep source documents after five years; and

. Exempting reimbursements or payments of expenses under the M4/M5 Cashback Scheme for tolls paid on the M4 and M5 toll roads.

The bill will also correct unintended consequences made by the rewrite of the provisions of the Income Tax Assessment Act 1936 resulting from the Tax Laws Improvement Act (No. 1) 1998. In addition some minor amendments will be made to the readability of those rewritten provisions. The amendments will apply to assessments for the 1998-99 income year.

Further, the bill will amend the capital gains tax provisions so as to provide that public entities—listed public companies, publicly traded unit trusts and mutual insurance organisations—with pre-capital gains tax assets, at 30 June 1999, and thereafter at five-yearly intervals or if there is abnormal trading, must satisfy the Commissioner of Taxation that they have maintained continuity of majority underlying ownership. If continuity is lost, any pre-capital gains tax assets are treated as post-capital gains tax assets.

Thirdly,

Extension of the Beneficiary Rebate to include CDEP participants

The bill extends the beneficiary rebate to participants in the Community Development Employment Projects (CDEP) Scheme in respect of the income support component of their CDEP wages. This will ensure that unemployed members of indigenous communities who choose to forgo their entitlement to social security allowances to work on CDEP projects will not suffer any taxation disadvantage compared with recipients of unemployment allowances, such as the Newstart allowance.

And lastly,

Providing taxation information to State law enforcement agencies

This bill also amends the Taxation Administration Act 1953 to enable the Commissioner of Taxation to provide information to the New South Wales Police Integrity Commission and the Queensland Crime Commission, where the commissioner is satisfied that the information is relevant to establishing whether a serious offence has been or is being committed, or is relevant to the making, or proposed or possible making, of a proceeds of crime order.

Full details of the amendments in the bill are contained in the explanatory memorandum circulated to honourable members. I commend the bill to the House and present the explanatory memorandum to the bill.

Debate (on motion by Mr Melham) adjourned.