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Wednesday, 3 September 2008
Page: 4369


Senator CONROY (Minister for Broadband, Communications and the Digital Economy) (10:38 AM) —The government will not support the amendments moved by Senator Coonan on behalf of the opposition to remove the schedule 2 family trust changes from the bill. It was part of the 2008-09 budget process. The government made difficult decisions to ensure disciplined budget management and the integrity of the tax system. The family trust amendments address the concern that the current definition of ‘family’ and the ability of family trusts to make one-off variations to their test individuals provide significant scope for family trusts to transfer the benefits of tax losses to future generations. These changes will reduce the scope for family trusts to be used to lower income tax by utilising losses, delivering on the government’s commitment to disciplined budget management. The measures are expected to provide savings of up to $19 million over the next four years.

The majority report of the Senate Standing Committee on Economics inquiry into TLAB No. 4 and evidence given by Treasury officials stated that it is anticipated that the savings associated with the amendments will grow over time beyond the forward estimates period and could realise significant cost savings. Opposing this bill also represents yet another example of the opposition blocking government saving measures. Fiscal discipline is a key part of this government’s five point plan to fight inflation. This family trust measure is one of the decisions to ensure disciplined budget management and the integrity of the tax system. I note that the majority report of the Senate Standing Committee on Economics recommends that this bill be passed, including the family trust measure. The majority report states that the family trust measure in schedule 2 will achieve the government’s stated objective of cost savings and fulfil its election commitment to tighten family trust arrangements.