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Wednesday, 10 September 2003
Page: 19642

Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (10:35 AM) —in reply—On behalf of the government, I would like to thank all those honourable members who have spoken in this very important debate on the Taxation Laws Amendment Bill (No. 8) 2003. This bill contains a variety of measures that demonstrates 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.

Firstly, the bill adds a number of organisations to the tables that provide income tax deductibility for gifts to those organisations under the Income Tax Assessment Act 1997. The period of gift deductibility is being extended for two other organisations. Secondly, the bill amends the capital gains tax provisions in the income tax law to take into account capital gains or losses while shares or rights are in an employee share trust. Broadly speaking, this measure will ensure that a capital gain or loss on subsequent disposal of the shares or rights by the employee is calculated from the time the shares are allocated to the employee in the trust. The counting of the 12-month ownership period for the capital gains tax 50 per cent discount will begin at the same time. Therefore, the treatment of shares or rights acquired under an employee share scheme operating through a trust will be better aligned with the tax treatment of shares or rights acquired under other employee share schemes.

Further, there will be technical amendments to the capital gains tax law and fringe benefits tax law to ensure that they operate as intended in relation to employee share schemes. The bill contains a series of other technical amendments to income tax legislation and other areas of the tax law. The bill will give cooperative companies the option to frank distributions from assessable income of the current year. The measure gives cooperatives the same access to imputation credits as other companies, while maintaining the deduction for unfranked distributions for the cooperatives which prefer the deduction approach.

The bill amends the Petroleum Resource Rent Tax Assessment Act 1987 to recognise expenditures associated with closing down a facility that has ceased to be used for a petroleum project but which continues to be used, under an infrastructure licence, at the time the production licence ceases. This should remove a disincentive to the take-up of infrastructure licences, which extend the lives of such facilities by putting them to use processing petroleum from other projects. Without this change, the claiming of eligible closing down expenditures would be delayed.

The second amendment to the Petroleum Resource Rent Tax Assessment Act will produce more equitable and uniform tax arrangements where the same facility is used for petroleum sourced from two or more petroleum projects. In these cases the tax would be extended to include all the petroleum activities related to that project in the tax calculations of the operator. Finally, the bill will ensure that no tax consequences arise for any person as a result of the corporate conversion of the Australian Gas Light Company from a company of proprietors, established under New South Wales legislation, into a company registered under the Corporations Act 2001.

As is usual in debates of this nature, the member for Kingston—the opposition spokesman—has made a thoughtful, shall we say, and sometimes provocative contribution; he certainly works through the issues. But in this matter the government does not accept much of what the member for Kingston says, which is obviously not a surprise to him. In his speech, he criticised the government for the delay in bringing the bill forward. It was the Labor Party that referred this bill to a Senate committee that looked at the bill for three months before seeking a further extension of time to report. The hypocrisy of the member for Kingston in criticising the government is demonstrated in Labor's repeated obstruction to the positive reforms attempted by this government. I suspect that the member for Kingston, who is a pretty reasonable sort of guy, is at times overruled by his colleagues and he is probably as embarrassed—

Dr Emerson —He is his own man.

Mr SLIPPER —You think he is his own man? So you are blaming him, my friend? I have found the member for Kingston to be fairly reasonable and I suspect that he might share the embarrassment of a number of people over the delays caused by the Labor Party. With around 20 bills currently stalled or about to be stalled in the Senate and double dissolution triggers piling up, it is highly duplicitous of the opposition to now be questioning the government's commitment to timely tax reform.

Mr SLIPPER —The next election will be held at a time of the Prime Minister's choosing. The member for Blair always makes a positive contribution. He pointed out that the PRRT will encourage environmental clean-up. He has keenly observed the situation—namely, that this measure will further encourage the petroleum industry to commit the resources of the community to environmental restoration. It is a great pity that the member for Kingston, or at least his colleagues, has not considered that particular point. The member for Mitchell referred to the fact that cooperatives will be allowed to frank distributions. I want to express to the member for Mitchell the government's appreciation for his contribution to this debate. He understands rural and regional Australia very well and he stressed the importance of cooperatives in those parts of this great country. I am proud to be presenting this bill, which will support the activities of cooperatives by offering a more flexible tax regime to cooperatives and their members.

The member for Hunter, in his speech, gave us a bit of a history lesson. He outlined the history of the PRRT and pointed out that an ALP government introduced it. I thank the member for Hunter for sharing this trip down memory lane. He was quite sentimental. He spoke of the strengths of the scheme, and I can only heartily agree that it has served the industry well in the past. However, unlike the Labor Party, this government is not frozen in a policy vacuum, and this bill will ensure that valuable petroleum infrastructure is fully utilised and that petroleum exploration is encouraged not penalised. I commend the bill to the House.

Question agreed to.

Bill read a second time.