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Wednesday, 9 May 2012
Page: 4366

Mr TONY SMITH (Casey) (18:02): This tax law amendment bill was introduced into this place on 21 March by the Assistant Treasurer. I will say at the outset that the opposition will not be opposing this bill. It has five schedules. I will very briefly run through each of them as the minister did during his introduction back in March.

The first schedule disallows a deduction against rebatable benefits from 1 July 2012. This relates to a 2010 High Court case that held that study expenses incurred in gaining student Youth Allowance were able to be deducted from assessable income. In summary, that case changed what had been the previous law and practice prior to that decision. It was the position not only of this government but of previous governments, including the Howard government, that study expenses not related to employment were not tax deductible. Following the High Court decision, the government announced in the 2011-12 budget that it would disallow deductions from 1 July 2012, although it would allow them for 2010-11 and prior income years in line with the court decision. This change restores the tax position to what it was prior to that High Court decision or what the understanding of it was.

The second schedule relates to limited trading stock exemptions for superannuation funds and removes the trading stock exemption to the capital gains tax primary code rule for certain assets of a complying super fund. The Assistant Treasurer outlined this schedule in some detail in his introductory speech.

The third schedule is a tax exemption for ex gratia payments to New Zealand non-protected special category visa holders. Essentially, it exempts income tax ex gratia payments to New Zealand non-protected special category visa holders paid in relation to the floods in January of this year. This schedule is necessary for consistent treatment with other previous natural disasters and payments in this regard and is non-controversial.

Schedule 4 enacts a decision that the government announced, I am pretty sure, in the MYEFO with respect to the phasing out of the dependent spouse tax offset.

The final schedule, as is always the way with these tax laws amendment bills, is a series of miscellaneous changes to address what are always termed 'minor technical deficiencies'. In this case, it is in the MRRT legislation, we are told, and a series of other drafting issues that are necessary.

As I indicated at the outset, we will not be opposing the bill. Of course, as we have pointed out, the MRRT bills as passed were legislatively flawed—and the government knew it when they put them forward—and schedule 5 deals with very technical issues. Each of the four unrelated schedules relate to fairly technical tax issues and, as is almost always the case, the coalition comes to these debates wanting to see improvements in the technical aspects of the tax legislation, and this is no different.