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Monday, 29 October 2012
Page: 12297


Mr TONY SMITH (Casey) (19:14): The Tax Laws Amendment (2012 Measures No. 5) Bill 2012 was introduced about six weeks ago by the Assistant Treasurer. I will run through each of the schedules and I understand that following my contribution it will be the wish of the House to adjourn debate on this particular bill until a later date, as a result of discussions between the whips.

There are a number of schedules within this bill and I will briefly go through each of them. The first schedule, which the Assistant Treasurer outlined in some detail back on 19 September, relates to the conservation tillage refundable tax offset. This offset was introduced as part of the government's carbon tax legislation. It applies to eligible non-till seeders that a taxpayer uses or installs ready for use in primary production, from 1 July this year, and it will be repealed on 1 July 2015. The offset is available only to primary producers who incur expenditure on new equipment called a no-till seeder. This type of equipment has been given a tax break, because it is claimed it will achieve minimal soil disturbance or damage, increase soil nutrients, protect against wind erosion and reduce water loss—it is referred to as non-tillage farming. A conservation tiller offset will reduce income tax for primary producers who spend money on this new equipment, the non-tiller seeder.

Back on 19 September the Assistant Treasurer went to great lengths to explain the amendment contained within this tax law amendment bill. Essentially, the amendment turns on whether this piece of equipment is purchased either as a standalone tool or the combination of a cart and the tool. It is my understanding that this amendment is simply to clarify and broaden that to remove what was a narrow definition.

In a completely unrelated schedule, schedule 2 deals with the mature-age-worker offset. It will phase out that offset. The mature-age-worker offset was first introduced by the Howard government in 2004, with the very clear and sensible objective of increasing the incentives for older Australians to stay in the workforce. As a result of this legislation, the offset will be closed for taxpayers born after 30 June 1957. The phase-out of this tax offset will therefore effectively be a tax increase for older Australians, who will not have access to this offset that was introduced previously. As the government has made clear, they do not support the offset. They have different plans for trying to increase worker participation. Whilst the coalition thinks the introduction of the mature-age-worker offset was a good measure, Labor, transparently, has not supported it, and this schedule makes that very clear.

I will deal with schedule 3 towards the end and deal with it on its own because it relates to some procedural issues. Schedule 4 deals with fuel blending exemptions. Currently, the blending of certain excisable fuel products is treated as manufacture and must occur only at licensed premises, and the manufactured product is subject to excise. There are specific legislative exemptions, for example, where the duty is being paid at the same rate on each component of the blend. These amendments will repeal those specific exemptions. Instead, a power will be given to the relevant commissioner to specify whether the manufacture of fuel blends will not be treated as an excise manufacture and therefore not be subject to the excise.

Schedule 5, which is a common schedule in our tax law amendment bills, deals with deductible-gift recipients and adds a new organisation to the list of deductible-gift recipients, namely, the Queen Elizabeth Diamond Jubilee Trust of Australia, which has been established to raise funds for the commemoration of Her Majesty Queen Elizabeth II's Diamond Jubilee. The trust will collect funds for the purpose of delivering charitable projects for the support and advancement of individuals of all ages, with a focus on the poor and disadvantaged, through supporting the work of the Queen Elizabeth Diamond Jubilee Trust in the UK. The gift must be made after 31 October 2012 but before 1 July 2015, reflecting the period of fundraising for Her Majesty's Diamond Jubilee.

The final schedule deals with the wine equalisation tax. It amends the entitlement that a producer of wine may have to a rebate of the wine equalisation tax. The producer rebate scheme entitles wine producers to a rebate of 29 per cent, which is typically the price for which the producer sells the wine, excluding the WET and the GST. It replaced the previous rebate scheme for producers, known as the cellar door rebate, and is available to New Zealand wine producers. I am advised that in a submission in 2008 to the Treasurer the Winemakers' Federation of Australia advised of excessive claiming of the producer rebate, resulting partly from double dipping in relation to the rebate on blended wine. The opportunity currently exists for multiple rebates to be claimed on the same quantity of wine.

A report just a year ago by the audit office into the administration of the wine equalisation tax recognised the risk to revenue and recognised that risk as high. Industry representatives informed the Australian National Audit Office that the practice of multiple blending led to inappropriate accessing of the rebate, and the Australian National Audit Office recommended legislative clarification. So, when a producer uses wine acquired from another producer to blend or further manufacture wine, schedule 6 of this bill, as detailed by the Assistant Treasurer and in the explanatory memorandum, will reduce the rebate entitlement of the producer who blends or further manufactures wine, unless they receive a notice from the earlier producer in the supply chain. Using the approved form, the earlier producer may notify the later producer that they are entitled to a producer rebate of the nominated amount for the wine that they supplied. The later producer's entitlement to the producer rebate will then be reduced by that amount. Where the earlier producer does not notify, the later producer's entitlement to the producer rebate will be reduced as if the earlier producer had been entitled to a rebate on the quantity of wine supplied.

I will come back to schedule 3. Schedule 3 relates to a compliance regime for gaseous fuels. This schedule will be the subject of an amendment from my colleague the shadow minister for energy and resources and the member for Groom to excise this schedule from the bill. He will be speaking when the debate on this bill resumes, presumably tomorrow or a later day. But essentially the coalition is opposed to the sections within the schedule that relate to the record-keeping requirements for gaseous fuels on the basis that it is a new regulatory burden for the sector and will create cumbersome record-keeping requirements.

The amendments proposed by the government are more onerous and more strict than the current Excise Act's obligations on conventional fuel-sellers and others obliged to collect excise. However, the coalition does not oppose the measure dealing with forklift trucks. Item 20 in schedule 3 treats a forklift truck used off public roads as not being a motor vehicle for the purpose of the Excise Act. Consequently the use of gaseous fuels in forklifts will be treated as non-transport fuel.

In other respects, schedule 3 will increase the red tape burden, especially for small businesses handling LPG. The coalition considers the existing provisions in the Excise Act regarding record keeping, officials' access to premises and imposition of penalties for the supply of gaseous fuels subject to fuel tax relief for a transport use to be sufficient. The compliance regime measure was not previously announced. It appears that there has not been any consultation carried out prior to introducing these proposed amendments, and the amendments have emerged as a consequence of the introduction of the Taxation of Alternative Fuels legislation last year. They are deemed necessary by the government in order to get around administrative difficulties created by the new legislation, because gaseous fuels have a wide range of non-road-use applications and are often retailed from the same vendor—for example, LPG for vehicle use and for small bottle refilling.

These amendments are clumsy at best. They go beyond and are more onerous and more strict than the current Excise Act's obligations on conventional fuel-sellers and others obliged to collect excise. As I said, they will increase the red tape burden, especially for small businesses handling LPG. The shadow minister for energy and resources and the member for Groom will speak in detail and move an amendment with respect to schedule 3 when this debate resumes. But, as I said at the outset, the coalition variously supports or will not oppose the other schedules. I understand it will be the wish of the House to adjourn the debate after the conclusion of my contribution—which is now.

Debate adjourned.