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Thursday, 3 June 2004
Page: 30120


Mr ROSS CAMERON (Parliamentary Secretary to the Treasurer) (1:39 PM) —in reply—It is my pleasure to sum up the debate on the Tax Laws Amendment (2004 Measures No. 2) Bill 2004 and the Tax Laws Amendment (2004 Measures No. 3) Bill 2004, and to thank all members for their contributions. Tax reform that makes business more competitive represents an investment by the government in securing a successful economy. It is in this setting that jobs and investment and trade opportunities are created for Australia, all of which are fundamental to our continuing economic prosperity. These bills further deliver on the government's commitment to creating an economic environment in which business can prosper for the benefit of all Australians. The government has listened and been responsive to industry calls to remove impediments to business investment and restructuring. The open and constructive engagement of business in the design and implementation of tax reform has been a hallmark of this government's approach. These bills further demonstrate our commitment to consultation and a preparedness to listen and act as a result.

In addition to this range of business tax measures, the first bill also implements a number of other tax measures. The government has introduced a scheme to address the unfunded incurred but not reported liabilities of medical defence organisations, and introduced a contribution scheme which imposes a liability on doctors to fund the scheme. The bill ensures that all individuals who make United Medical Protection support payments will be entitled to an income tax deduction for the amount of their contribution in that income year. The bill also contains the government's response to the recent court decision which found that some public ambulance services were ineligible for the fringe benefits tax exemption of up to $30,000 per employee available to public benevolent institutions. Following this court decision, the government announced that it would make an FBT exemption of up to $17,000 per employee available to public ambulance services consistent with that currently available for public hospitals. In addition, it was announced in the budget that Commonwealth grants will be made to support organisations in the transition to this lower fringe benefits tax concession. In relation to the ambulance measures, the member for Kingston argued that this was an example of the government following Labor's lead. While I say that a government ought not be too proud to pick up a good idea from an opposition, in this instance it is simply not the case.

The Australian people are eager to hear the Labor Party's own position on tax. I see that the member for Kingston—one of the more thoughtful members of the opposition; one of the more literate in financial matters—has been left somewhat high and dry by the Leader of the Opposition in relation to the member for Kingston's own suggestions or hints regarding Labor's tax policy, particularly in respect of his view that the second tranche of tax cuts are non-binding on the Australian Labor Party. That may or may not be the case. The Leader of the Opposition may come to the rescue of the member for Kingston and confirm that Labor regards the second tranche of this budget's tax cuts as non-binding on the ALP, and that that money would be better spent elsewhere and taken back from the taxpayer. However, to date, we are all breathlessly waiting for the arrival of Labor's tax policy. In the lead-up to our budget, the Leader of the Opposition was peppered with questions as to whether he would match the government's tax cuts. He said, `Just wait until budget week.' He said that budget week was the time when the opposition's tax policy might properly be given to the Australian people and a comparison be made, and that he would not be pressured into releasing his tax policy before the government released ours. Budget week is disappearing into the mists of time and yet, still, we have not seen the first glimmer of an ALP tax policy. So, we look forward to that development with bated breath.

In relation to the public benevolent institutions, the government's response is, in fact, a comprehensive response to the relevant federal court decision. Labor's amendment of last year would have left ambulance services—which are public benevolent institutions—hanging without any support in the movement away from the $30,000 capped FBT exemption. The government looked at the issue more carefully and has provided transitional grants to assist these organisations, which would have been entirely absent had we adopted the opposition's more superficial analysis of the needs of ambulance public benevolent institutions. The FBT laws will also be changed to permit the continuity of FBT treatment for non-remote housing benefits where the administration and payment of FBT is devolved by state or territory governments to an agency. This will reduce compliance costs for those governments.

The bill will encourage those who have come from overseas to transfer their foreign pension entitlements to Australia. The change will enable a taxpayer who is transferring their overseas superannuation to an Australian complying superannuation fund to elect to have part of the transfer treated as a taxable contribution in the Australian superannuation fund. By doing so, the fund rather than the individual taxpayer will pay the relevant tax arising from the transfer, and tax will be paid at the concessional superannuation fund rate rather than at the individual's marginal rate. Lastly, Tax Laws Amendment (2004 Measures No. 2) Bill 2004 amends the alienation of personal services income provisions to clarify when the Commissioner of Taxation may make a determination that the alienation provisions do not apply to a taxpayer. Technical anomalies in the current law may give rise to unintended outcomes. The amendments will ensure the law operates according to the original policy intention.

The second bill considered in this debate, Tax Laws Amendment (2004 Measures No. 3) Bill 2004, completes the government's commitment to establish a best practice venture capital investment regime, which was introduced in July 2002. Under the venture capital tax regime, eligible foreign investors are exempt from income tax on profits from the disposal of their investment in eligible Australian venture capital investments. The amendments ensure the venture capital tax concessions operate as intended and expand the range of investments eligible for the venture capital tax concession. Finally, this bill will amend the fringe benefits tax law to extend by one year the transitional arrangements for employer contributions to worker entitlement funds.

I listened with interest to the member for Rankin and his impassioned plea to government to reduce the compliance burden on business. I note that this follows his remarks earlier this week, when he raised with COSBOA, the small business representative group, concerns about the impact of unfair dismissals. I am pleased to see this new-found concern—in effect, the first real flicker of concern in the Australian Labor Party—about the impact of the unfair dismissals laws. It is a welcome development, and we hope that the member for Rankin's desire to alleviate the burden of unfair dismissals laws on small business will continue and that he will become the leader of a crusade within the Australian Labor Party to overturn their resistance in the Senate to amending these harsh and oppressive measures.

This collection of tax laws is of that character. It is designed to make the Australian economy more efficient. It is designed to widen the range of tax concessions available to Australians, who need and deserve them. In particular, it is an acknowledgment of the contribution made by the ambulance services, whom none of us want to see in our driveway but whom we are most grateful for in our moments of most urgent need. It is part of the ongoing commitment of this government to present Australia to the world as one of the most competitive and efficient economies available. I commend the bills to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.