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Wednesday, 3 December 2003
Page: 23550


Mr ROSS CAMERON (Parliamentary Secretary to the Treasurer) (9:32 AM) —I move:

That the amendment be disagreed to.

The Taxation Laws Amendment Bill (No. 5) 2003, which is the subject of the amendment, contains an omnibus collection of measures, one of which relates to the availability of a benefit to public hospitals in terms of their access to exemptions from fringe benefits. While public hospitals were traditionally paid a rebate in lieu of tax liability for fringe benefits, with the introduction of the new tax system in 2000 that was codified in access to a $17,000 gross taxable value per employee of public hospitals that were also public benevolent institutions.

Public hospitals self-assess, like other participants in the tax system, and, depending upon the governance and control arrangements over the administration of public hospitals, there has been doubt that they remain a public benevolent institution or drift into the legal classification of a government organisation, thereby disqualifying them from access to the $17,000 tax-free FBT benefit per employee.

The purpose of the amendment in the Taxation Laws Amendment Bill (No. 5) 2003 is to extend the protection to public hospitals whether or not they are public benevolent institutions—in effect, to secure that benefit and to extend it. That was a recommendation of the report of the Inquiry into the Definition of Charities and Related Organisations which the government was implementing. To that amendment the opposition have moved that ambulance services ought to be placed on the same footing as public hospitals, presumably to ensure their entitlement to the $17,000 gross taxable value continuing entitlement. The government is opposing the amendment, partly because of the historical reason that public hospitals were the subject of this piece of legislation. If we had intended to deal with other aspects of the public health system, we would have done so in the measure.

The other concern with the amendment is that the bill may actually have a deleterious effect on the availability of tax concessions to ambulance services. For example, ambulance services that are at present public benevolent institutions are entitled not to $17,000 but to $30,000 gross taxable value per employee. If we look at an organisation like the St John's Ambulance Association—which, for example, is providing ambulance services under contract to the Western Australian and Northern Territory governments—as a public benevolent institution but not as a public hospital we see that St John's is currently entitled to the higher value of $30,000 per employee. It seems to me on first reading of the opposition's amendment that there is a real possibility that, if St John's were to be treated in the same way as a public hospital, they would lose that higher entitlement. I am sure that is not the intention of the opposition but that appears to me to be a likely consequence of the amendment. So for those reasons the government will be opposing the amendment.