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Wednesday, 15 June 2011
Page: 2794


Senator CORMANN (Western Australia) (10:13): The coalition will not oppose the Tax Laws Amendment (2011 Measures No. 3) Bill 2011. This bill makes the following changes to taxation laws. It provides a 12-month GST-free export period for new recreational boats from 1 July 2011. The measure is designed to assist Australian exports of recreational boats and amends the Income Tax (Transitional Provisions) Act 1997 to overcome a technical problem with the imposition of general interest charges in certain circumstances.

In relation to the provision of a 12-month GST-free export period for new recreational boats from 1 July 2011, the intended effect of the new provision is to provide a 12-month period within which new recreational ships can be exported from Australia as a GST-free supply. Under the existing law, a purchaser or the supplier must export the ship from Australia within a specified 60-day period, unless the period is extended by the commissioner, in order for the supply to be treated as a GST-free supply. Introducing this 12-month export period to apply to the supply of a recreational boat enables a purchaser of a boat to gain experience operating the boat in Australian waters before having to remove it from Australia. Sailing or motoring the boat out of Australia is expected to be the most common means of exporting, although there is no requirement for the boat to be exported in this way. In order for the supply of the boat to be treated as a GST-free supply there are two tests that must be satisfied. The ship must be a new recreational ship; it cannot be a substantially reconstructed boat, and it cannot previously have been sold, leased or used since the completion of its construction. And the ship must not have been used for any disquali­fying activities, such as carrying out a business. As I have mentioned, the coalition will not oppose this particular amendment.

Furthermore, this bill also amends the Income Tax (Transitional Provisions) Act 1997 to overcome certain technical issues with the imposition of general interest charges. The tax law imposes a general interest charge for the late payment of income tax and shortfall interest charge liabilities. The Tax Laws Amendment (Trans­fer of Provisions) Act 2010 rewrote and transferred the relevant general interest charge imposition provisions for outstanding amounts of income tax and shortfall interest charges from the Income Tax Assessment Act 1936—the ITAA 1936—to the Income Tax Assessment Act 1997. The purpose of this rewrite was to remove any ambiguity in the provisions and, again, the coalition will not oppose it.