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Thursday, 19 June 2003
Page: 16996


Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (10:40 AM) —The member for Kingston originally was going to talk for five minutes but he managed to spin it out to 25 minutes. I do not know whether it is a question of his being paid by the word, but he certainly spoke at length on his second reading amendment. His comments were not directly related to the matters contained in the Taxation Laws Amendment Bill (No. 6) 2003 but were an attack on this government's initiative to improve and enhance Medicare with the package brought down by the government just a short time ago.

It is amazing to hear someone suggest that spending close to a billion dollars on improving our Medicare system could in some way be moving towards dismantling it. It should be noted that universal bulk-billing was never a key element of Medicare. Doctors always had the choice as to whether or not to bulk-bill, and that remains the case. What the government has done is to make sure that bulk-billing will be available to those most in need of it and has built in incentives for doctors to bulk-bill those particular groups. The two key arms of Medicare—namely, that there should be universal access to the Medicare rebate and universal access to free public hospitals for those who wish to use them—will both remain. I think the Australian people are getting sick and tired of the opposition standing up in the House and suggesting that we are trying to tear up Medicare and trying to destroy Australia's health care system. It is quite the opposite. What we are doing is enhancing it and improving it. We are spending more money and making sure that Medicare is sustainable and able to go on into the future.

I thank the member for Kingston for his support of the bill's core issues, and I note that the opposition will ultimately be supporting the very important initiatives contained in the Taxation Laws Amendment Bill (No. 6) 2003. This bill contains a variety of measures that demonstrate the commitment of the government to continuous improvements in the tax system by promoting equity, easing compliance costs and introducing structural reforms that will support a robust economy. This bill will increase the Medicare levy low-income thresholds for individuals, married couples and sole parents in line with increases in the consumer price index. It also increases the Medicare levy low-income threshold for pensioners below age pension age to ensure that, where those pensioners do not have a tax liability, they will also not have a Medicare levy liability. The amendment to the Medicare levy low-income thresholds will apply to the 2002-03 year of income and later years of income.

This bill will modify the general value-shifting regime so that, as a transitional measure, the consequences arising from operating under this regime do not apply to most indirect value shifts involving services. This measure will help to reduce compliance costs for business during the transition to consolidation. The bill also makes further refinements to the consolidation regime. It will limit the extent to which a linked asset's tax cost can change when it comes into a consolidated group, minimising possible distortions in asset values. It modifies the cost setting rules to ensure they apply approp-riately to a partner's interest in a partnership, as well as partnerships that enter con-solidated groups. It will align the mem-bership rules for multiple entry consolidated groups with the current membership rules for consolidated groups where subsidiaries are held through an interposed non-resident entity. Broadly, only those multiple entry con-solidated groups that consolidate before 1 July 2004 will be eligible to have non-resi-dent entities interposed between members of the group.

The bill also makes some minor technical amendments. These refinements to the consolidation regime will apply from 1 July 2002, which is the commencement date of the consolidation regime. The bill streamlines the procedures under which an individual taxpayer can be released from a tax liability where payment of the liability would entail serious hardship. The existing authority to grant release will be transferred from tax relief boards to the Commissioner of Taxation. Consistent with contemporary review practices, the amendments will also introduce a new right to have tax relief decisions reviewed internally under the Australian Taxation Office objections process and externally by the Administrative Appeals Tribunal sitting as the Small Taxation Claims Tribunal. Also, the scope of the release arrangements will be expanded to cover instalments of pay as you go and fringe benefits tax under A New Tax System. These changes will improve the efficiency of the process and at the same time introduce more accountability into the system.

The bill amends the imputation rules to allow New Zealand companies to choose to enter the Australian imputation system. A New Zealand company will be able to maintain an Australian franking account and attach Australian franking credits to dividends. This measure will enable Australian shareholders of New Zealand companies deriving income in Australia to receive franking credits, and consequently a tax offset, for Australian tax paid on that income. This measure fulfils Australia's commitment to the reform of triangular taxation. It reflects the commitment of this government to the continued strengthening of the closer economic relations agreement between Australia and New Zealand and the promotion of trans-Tasman business.

The bill amends the GST law to apply the GST insurance provisions to payments and supplies made in settlement of claims arising under a compulsory third-party scheme. The GST insurance provisions are also extended to apply to transactions undertaken by insurers pursuant to an agreement to share the cost of settlements made under a compulsory third-party scheme.

Lastly, this bill provides for the establishment of a new category of deductible gift recipient; namely, a register of harm prevention charities. Harm prevention charities are charitable institutions whose principal activity is to promote the prevention or the control of behaviour that is harmful or abusive to human beings. Under this measure, these institutions will be entitled to apply to the Australian Taxation Office for endorsement as deductible gift recipients. Such deductible gift recipient status will assist these institutions in attracting public support for their socially valuable activities. Taxation Laws Amendment Bill (No. 6) 2003 is a very important piece of legislation, which I now commend to the House.


The DEPUTY SPEAKER (Hon. B.C. Scott)—The original question was that this bill be now read a second time. To this the honourable member for Kingston has moved as an amendment that all words after `That' be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Question agreed to.

Original question agreed to.

Bill read a second time.