Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 28 May 1998
Page: 4069


Mr MILES (9:53 AM) —I move:

That the bill be now read a second time.

The bill will implement the government's recently announced response to the taxation-related recommendations of the Joint Standing Committee on Electoral Matters, following its inquiry into the conduct of the 1996 Federal Election. This bill complements other legislation currently before the parliament which implements the government's response to the other recommendations of the joint standing committee the Electoral and Referendum Amendment Bill 1998 and the Electoral and Referendum Amendment Bill (No. 2) 1998 .

Currently, the income tax law allows a non-corporate taxpayer to deduct a contribution, which includes a membership subscription as well as a gift, of $2 or more to political parties registered under part XI of the Commonwealth Electoral Act 1918. The total deductions allowable to a taxpayer are subject to a maximum level of $100 in an income year. Testamentary gifts or contributions are not deductible.

The joint standing committee recommended that the income tax law be amended so that the maximum annual tax deductibility threshold for donations to political parties be increased from $100 to $1,500, and that companies be allowed to make tax deductible donations. The word `donation' is a general term which covers contributions as well as gifts.

The government has accepted that recommendation. The government agrees with the joint standing committee that an increase in the threshold will encourage small to medium donations, thereby increasing the number of Australians—including companies—involved in the democratic process and reducing a political party's reliance on a small number of large donations.

The joint standing committee also recommended that the income tax law be amended to provide that donations to an independent candidate at a federal or state election are tax deductible, at the same level as donations to registered political parties. The government has also accepted this recommendation. This will provide an equivalence of treatment between independent candidates and members and political parties.

To implement these recommendations, the bill repeals the existing provisions of the Income Tax Assessment Act 1997 that apply to contributions to political parties and inserts a new subdivision that applies to both contributions to political parties and gifts to independent members and candidates. The bill also allows taxpayers to make tax deductible contributions to political parties that are registered under state or territory electoral legislation. This expansion will complement the tax concession afforded to independent candidates and members.

The amendments made by the bill will apply to contributions to political parties and gifts to independent candidates and members made on or after 1 July 1998. It is anticipated that implementation of these recommendations of the joint standing committee will increase the number of Australians involved in the democratic process and reduce a political party's reliance on large donations. The measures contained in the bill complement the election funding of political parties and provide an equivalence of treatment between donations to political parties and donations to independents.

Full details of the measures in the bill are contained in the explanatory memorandum circulated to honourable members. I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Melham) adjourned.