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Thursday, 3 December 1998
Page: 1287

Mr HOCKEY (Financial Services and Regulation) (11:06 AM) —I move:

That the bill be now read a second time.

The bill contains two new exemptions from sales tax. The exemptions are for commercial space equipment and for certain goods imported by overseas participants and delegations attending the Sydney 2000 Olympics, Paralympics and associated events.

The bill will also remedy some weaknesses in the recently enacted scheme to prevent sales tax evasion in the computer industry and correct a deficiency in the temporary importation exemption.

This bill will implement the government's policy to exempt from sales tax space launch vehicles, payloads and other goods intended for launch into outer space or to be brought back from outer space. This measure was announced on 23 June this year.

The exemption will:

. encourage the development of a commercial space launch industry in Australia; and

. provide Australia with access to the growing world demand for commercial space launch facilities.

The space equipment exemption will apply from the date of royal assent. However, there will be a transitional credit for dealings on or after 23 June 1998 and before the date of royal assent. This will ensure that, as announced by the government, dealings on or after 23 June do not bear sales tax.

This bill will also provide that certain goods imported by or on behalf of non-Australian Olympic and Paralympic family members and delegations and participants in the Olympics, Paralympics and associated events will be exempted from sales tax.

This exemption is in line with current sales tax arrangements with respect to SOCOG.

The first events covered by the new exemption and which occur during 1998 will be the cultural Olympic event `A Sea Change' and the international sailing regatta.

The exemption will not apply to goods for sale, alcohol and tobacco products, motor vehicles and motor vehicle parts, television cameras and equipment for radio and television broadcasting.

The amendments complement recent changes to the customs law to exempt the same goods from customs duty.

The exemption will apply from the date of royal assent and, as for the space equipment measure, there will be a transitional credit arrangement. The credits will apply to dealings on or after 1 March 1998 and before royal assent.

The government proposes three changes to overcome some technical problems with the new scheme for dealing with sales tax evasion in the computer industry.

The first change will remove anomalies arising from current descriptions and tariff classifications in the law. This will apply from the date of introduction of the bill.

The second change will increase the maximum penalty for a person falsely representing himself or herself to be accredited or falsely representing a transaction to be authorised, and will increase the maximum penalty for making improper or false quotes under the law. The new maximum penalty of $5,500 will apply from the date of royal assent.

The third change will close a loophole that allows traders to falsely present themselves as exporters in order to purchase or lease goods tax free. This will apply from a date to be proclaimed.

The amendments will enhance the integrity of the new sales tax rules for computers which have addressed the entrenched culture of sales tax evasion previously evident in parts of the personal computer industry.

This bill also amends the sales tax law so that goods imported into Australia under a temporary importation exemption, used in Australia, exported and then re-imported, are subject to sales tax at the time of the second importation.

The amendment will correct a deficiency in the sales tax law from 13 May 1997, which is the date the government announced the measure.

I present the explanatory memorandum which explains in detail the changes to the law that the bill contains. I commend the bill to the House.

Debate (on motion by Mr Martin) adjourned.