Mrs VALE (12:50 PM) —This A New Tax System (Indirect Tax and Consequential Amendments) Bill 1999 contains measures that will ensure that the new tax system will better serve the people of Australia. As well as minor policy and technical amendments, this bill makes a number of significant amendments concerning the fairer implementation of the GST. This bill is indicative that this government is listening to the community and interest groups and is prepared to implement measures to address various concerns when such concerns can fairly be accommodated in the overall reform program.

We are living in a time of rapid change, and our tax system must equip Australians for the coming decades, not simply respond to those that have passed. The new tax system will come into effect in July next year, and it has been designed to do just that. This historic reform was not simply an incremental change but a giant leap forward to catch up with the forces placed upon us by globalisation and to take a competitive Australia into the 21st century. The tax reform undertaken by this government was never for the faint-hearted but for those who have the courage to take on a challenge of major proportions. That probably explains why it was left to a coalition government to implement and why the opposition has fought this reform at every turn.

Inherent in every reform measure are considerable challenges, and a responsible government should allow a certain flexibility of response. I am pleased to see that our government has moved quickly to consider informed opinion and constructive suggestions that have come from industry and state government and has made adjustments to help smooth the path to the new system which will follow. For that reason, I anticipate that these amendments will receive a positive response across the broader community. This will be especially so among small businesses, Australian exporters and primary producers, including the producers of grape wine and cider products and the providers of charitable residential accommodation.

The amendments do contain some bad news—bad news, that is, for any unscrupulous businessmen who undertake unreasonable price rises before 1 July 2000. This government is concerned that there be no opportunity for Australian families to be unfairly charged increased prices because of the introduction of the GST. One of these amendments will bring forward the Australian Competition and Consumer Commission's price exploitation enforcement power. This will arm the ACCC and enable it to take immediate action against those who would seek to cheat their fellow Australians and use the tax change as a cover for a price rip-off or to make a quick dollar. This amendment is important if consumers across Australia are to have confidence in the impact of the introduction of the new tax system, and I am sure that it will gain support in the wider community. Certainly consumers in my electorate will appreciate in this amendment measures which will assist in the protection of their interests and which will implement these important measures as the government intended.

The amendments will also be well received by retailers who supply a mix of taxable and exempt food products. One of the amendments allows for the new special rules under which the Commissioner of Taxation will be able to determine alternative methods—such as retail schemes—of calculating the goods and services tax liability. This will reduce compliance costs for many small businesses. It will simplify accounting methods—which, again, will lead to reduced compliance costs. These measures will go a long way towards alleviating the concerns of some constituents who have had apprehensions about the compliance costs of the new tax system and their ability to absorb such costs.

Australian exports are vital to Australia's high standard of living and underpin our assurance that we will be able to maintain our high living standard and be able to continue to deliver to our future generations. Our export potential underpins our confidence in our future ability to prevail as a successful nation. Another of the amendments in this bill will ensure that exports are GST free when ownership of goods passes to an overseas purchaser who is not registered or required to be registered before the goods are exported free on board. This amendment will be good news for Australian exporters, who must fight hard for a share of sales in a highly competitive international marketplace.

Other supporters of this bill will be the producers of grape wine and cider products. The amendments provide for greater clarity in the definition of wine products so that wine equalisation tax extends, as it was intended, to fruit or vegetable wines and grape wine products, such as wine cocktails, flavoured wines and Irish style cream drinks. These amendments will also ensure that private importations of wine are subject to the wine equalisation tax.

In the long and arduous debate that has led to the introduction of the new tax system, the government was often accused of heartless intentions with regard to charities and the people who depend on their services. Nothing could be further from the truth. Mindful of the concerns of many charitable organisations, the government established a charities consultative group to assist in clarifying the effect of the GST on the charity sector and to develop Taxation Office rulings well in advance of the introduction of the new tax system.

This government has listened to representations from the charities sector and in this amendment introduces the definition of non-commercial supplies of residential accommodation by charities. This will include supported accommodation and community housing. The market value and cost supply tests will be expanded for the non-commercial supplies of residential accommodation by charities from 50 per cent to 75 per cent. It will have the added benefit of reducing compliance costs while maintaining the principle that all commercial supplies should be subject to the goods and services tax.

This bill also clarifies what are assessable income and allowable deductions in certain circumstances. The goods and services tax received from customers when making taxable supplies will not be assessable income, but any decreasing adjustments arising under division 129 or 132 of the A New Tax System (Goods and Services Tax) Act will be assessable income. Goods and services tax creditable as an input tax credit will not be deductible for income tax purposes. Any increasing adjustments arising under these divisions will be deductible to the extent the underlying activity is not of a private or domestic nature.

Currently, the legislation allows businesses to choose to claim an input tax credit on their business insurance premiums at the end of a quarterly or monthly tax period. These amendments will allow businesses the option to elect to claim the input tax credit at the time of registration or, subsequently, at the time of lodging the business activity statement. This legislation also provides that a full input tax credit is available provided a business's annual turnover of financial supplies does not exceed the $50,000 or five per cent rule. This amendment also intends to make it clear that in working out the value of the supply of a loan of money the principal amount of the loan is excluded.

There is some good news in this amendment for the constituents of my electorate, because these measures also allow GST-free status for first aid and lifesaving courses. In my electorate I have a significant number of lifesaving groups and people who are interested in resuscitation. I refer particularly to the Sutherland Shire resuscitation committee, which is conducting courses now, as the swimming season is upon us. This news means that section 195 of the goods and services tax act includes first aid or lifesaving courses as education courses. That section allows for such courses to be GST free under section 38-85.

However, under the legislation the GST-free status is currently limited to courses which provide training in lifesaving and resuscitation and which are provided by non-profit bodies. These restrictions exclude such activities as lifesaving and education and training, lifesaving safety and aeromedical retrieval and rescue training from being provided on a GST basis. They also mean that courses in lifesaving and resuscitation offered by profit bodies are subject to GST. This approach is inconsistent with that taken more generally through the goods and services tax act where the focus is on the activity undertaken. Item 143 appeals the definition of the first aid or lifesaving course and substitutes a new definition which includes surf lifesaving and aeromedical rescue. Item 144 will bring profit bodies into the ambit of these entities able to offer first aid or lifesaving courses on a GST basis by omitting `non-profit' from the definition of first aid or lifesaving courses. That will be welcome news.

Not only has this government the vision and determination and commitment to tackle the huge task to modernise the Australian tax system but these amendments testify to a government that is prepared to listen and to consider the opinions and concerns of its constituents. These amendments also show that our government can tackle those concerns in a sensitive and flexible manner, acting quickly when justifiable reasons emerge for adjustments and finetuning. I am sure that many of these amendments will be welcomed by consumers in small business enterprises and other key groups within the Australian community, especially in my electorate of Hughes. I commend this bill to the House.