Senator IAN CAMPBELL (Parliamentary Secretary to the Treasurer) (1:31 PM) —I table a revised explanatory memorandum relating to the bill and move:

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The main measures of this bill amend the income tax law and the petroleum resource rent tax legislation.

Firstly, the bill adds a number of organisations to the tables that provide income tax deductibility for gifts to those organisations under the Income Tax Assessment Act 1997. The period of gift deductibility is being extended for two other organisations.

Secondly, the bill amends the capital gains tax provisions in the income tax law to take into account capital gains or losses while shares or rights are in an employee share trust. Broadly speaking, this measure will ensure that a capital gain or loss on subsequent disposal of the shares or rights by the employee is calculated from the time the shares are allocated to the employee in the trust. The counting of the 12-month ownership period for the capital gains tax 50% discount will begin at the same time. Thus the treatment of shares or rights acquired under an employee share scheme operating through a trust will thus be better aligned with the tax treatment of shares or rights acquired under other employee share schemes.

Further, there will be technical amendments to the capital gains tax law and fringe benefits tax law to ensure that they operate as intended in relation to employee share schemes. The bill contains a series of other technical amendments to income tax legislation and other areas of the tax law.

The bill will give co-operative companies the option frank distributions from assessable income of the current year. The measure gives co-operatives the same access to imputation credits as other companies, while maintaining the deduction for unfranked distributions for the co-operatives which prefer the deduction approach.

The bill also contains an amendment to rectify an anomaly in the reasonable benefit limit provisions of the Income Tax Assessment Act 1936. The purpose of reasonable benefits limit is to limit the amount of concessionally taxed superannuation benefits received by a person. The amendment will ensure that the proportion of concessional taxation rebate available to a reversionary pension paid on death is the same as that which applied to the original pension.

The bill amends the Petroleum Resource Rent Tax Assessment Act 1987 to recognise expenditures associated with closing down a facility that has ceased to be used for a petroleum project, but continues to be used under an infrastructure lic-ence. This should remove a disincentive to the take-up of infrastructure licences. Without this change, there would be no tax concession for closing down expenses, such as environmental repair, for facilities whose lives are extended by putting them to use processing petroleum from other projects.

The second amendment to the Petroleum Resource Rent Tax Assessment Act will produce more equitable and uniform taxing arrangements where the same facility is used for petroleum sourced from two or more petroleum projects. In these cases, the tax will be extended to include all petroleum activities related to that project in the tax calculations of the operator.

Clause 5 of the bill will ensure that no tax consequences arise for any person as a result of the corporate conversion of the Australian Gas Light Company from a company of proprietors established under NSW legislation to a company registered under the Corporations Act 2001.

Full details of the measures in this bill are contained in the explanatory memorandum. I commend the bill.