TAX LAWS AMENDMENT (POLITICAL CONTRIBUTIONS AND GIFTS) BILL 2008

This Bill abolishes income tax deductions for political contributions and gifts.

It was an election commitment to remove tax deductibility for donations made to political parties, independent candidates and independent members.  This commitment was made as part of ‘Labor’s $3 Billion Savings Plan’, which was announced on 2 March 2007.

This measure saves just over $10 million per annum.

In addition, this Bill ensures that political parties, independent members and independent candidates will not lose access to certain GST concessions to which they may be currently entitled as a consequence of the removal of income tax deductibility for gifts or contributions.

This measure was introduced as part of Tax Laws Amendment Bill Measures Number 1 2008 earlier this year but was rejected by the Senate. 

I strongly urge the opposition to reconsider their approach to this measure which forms part of the Government’s response to inflationary pressures in the economy.  This measure and other savings measures must be passed by this parliament to implement this government’s fiscally responsible Budget.

Full details of this Bill are contained in the explanatory memorandum.

FINANCIAL TRANSACTION REPORTS AMENDMENT (TRANSITIONAL ARRANGEMENTS) BILL 2008

The Financial Transaction Reports Act was Australia’s original anti-money laundering legislation.  Importantly, the Act provided for the reporting of certain transactions and transfers to AUSTRAC.  Many of the obligations in the FTR Act will soon be replaced with updated measures under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

The Financial Transaction Reports (Transitional Arrangements) Bill 2008 will enable regulated businesses to continue reporting important information to AUSTRAC as they make the transition to the new reporting regime.

The AML/CTF Act is being implemented over two years from 12 December 2006.  The Government has also provided a 15 month ‘policy principles period’ after the commencement of each set of obligations under the AML/CTF Act.  During that period, the AUSTRAC Chief Executive Officer may only apply for a civil penalty order against a reporting entity for a contravention of the Act if the reporting entity has failed to take reasonable steps to comply with its obligations.  This staggered implementation along with the policy principles period is allowing businesses time to develop the necessary compliance systems in the most cost effective way. 

Items 1 and 2, and 7 to 11 establish transitional provisions under the FTR Act.  These provisions authorise cash dealers to continue reporting suspicious transactions, international funds transfer instructions, and significant cash transactions to AUSTRAC until 11 March 2010 or until they become compliant with the new obligations under the AML/CTF Act, whichever occurs first.  The date 11 March 2010 accords with the day that the AML/CTF Act policy principles period expires.

Item 3 will allow regulated financial institutions to continue to place relevant transactions in their exemption register.  They will be able to do this until they either become compliant with the reporting obligations under the AML/CTF Act, or if they do not become compliant, up until the end of 11 March 2010.  This will ensure that appropriate records can continue to be maintained by the financial institution until this date.

Items 4, 5 and 6 amend the reporting obligations imposed on solicitors.

The amendments will enable solicitors who are reporting entities under the AML/CTF Act to continue to provide reports about significant cash transactions to AUSTRAC under the FTR Act.  They will be able to provide these reports up until the end of 11 March 2010, or until they become compliant with the reporting obligations under the AML/CTF Act, if that occurs first. 

It is important to note that the amendments will not create any duplication in reporting obligations.

In summary, the Bill contains several amendments to the FTR Act which will assist businesses to make the transition from regulation under the FTR Act to regulation under the AML/CTF Act.  In particular, the amendments will ensure that those businesses can continue to report important information to AUSTRAC during the transitional period.