Senator STEPHENS (Parliamentary Secretary for Social Inclusion and the Voluntary Sector and Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) (10:02 AM) —Thank you, Senator Siewert, for your observations. In relation to the concerns of the sector, you would know that I have been in very deep conversation with representatives of the sector on this and other issues for well over a year now and that I have been working towards a much broader approach to how we will deal with these issues.

These issues have been raised with me in every forum around Australia that I have been involved with. The not-for-profit roundtable presented very coherent arguments on a range of regulatory issues, not just on fringe benefits tax. There is also the work that is being done by the Australian Centre for Philanthropy and Nonprofit Studies at the Queensland University of Technology and Professor Miles McGregor-Lowndes. All have contributed to a deeper and more fundamental understanding of the sector, its role, its contributions and its challenges. My advice from the department, which may be helpful to you in the short term, is that the 2007 tax expenditure statement reports that the current capped FBT exemptions for PBIs, certain public and non-profit hospitals and the partial rebate for certain non-profit, non-government bodies have an estimated revenue cost of $740 million in 2008-09; $775 million in 2009-10; and $805 million in 2010-11. So we would be talking about a significant and substantial impost if we were to change the fringe benefits threshold in the way in which you are proposing in this legislation.

My concern for the sector is that we need to find some way of responding in the short term, and that is not going to be at the fringes of the fringe benefits tax. We will try to provide some substantive support for the sector, probably in the next budget or the budget after that, which is when we will be able to do something substantial and sustainable that will have a long-term impact for the sector.