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Thursday, 12 August 2004
Page: 2872


Mr BROUGH (Minister for Revenue and Assistant Treasurer) (9:11 AM) —I move:

That this bill be now read a second time.

This bill makes amendments to the income tax law and other laws to give effect to several unrelated taxation measures.

Firstly, this bill amends the lists of specifically listed deductible gift recipients in the Income Tax Assessment Act 1997 and creates a new general category of deductible gift recipient for government schools that provide special education for students with a permanent disability. Deductible gift recipient status will assist organisations to attract public support for their activities.

Schedule 2 provides irrigation water providers and rural land irrigation water providers access to the water facilities and land care tax concessions. This measure will improve equity by aligning the deductions available to primary producers and businesses using rural land, with deductions available to irrigators which supply those primary producers and businesses with water. It also assists irrigators to renew water supply infrastructure which will enhance the efficiency of water delivery to users of this water.

Schedule 3 broadens the fringe benefits tax exemption in relation to the costs associated with the purchase of a dwelling by an employee relocating for work purposes. These amendments will ensure that, when an employee purchases a dwelling in a new locality without having already sold their dwelling at the old locality, the employer is still able to access the fringe benefits tax exemption for costs incidental to the purchase of the new dwelling. This is, of course, still dependent upon the employee selling their dwelling at the old locality within two years of commencing their new employment position. These amendments apply to benefits provided from 1 April 2004.

Schedule 4 to this bill amends the capital gains tax law so that an administrator of a company, as well as a liquidator, can declare shares and other equity interests in a company to be worthless for capital gains tax purposes. The declaration permits taxpayers who hold those shares or other equity interests to choose to make a capital loss.

The next measure demonstrates this government's commitment to reducing compliance costs for employers. As announced in the Prime Minister's statement titled Committed to Small Business on 6 July this year, we are removing the superannuation guarantee reporting requirement from the superannuation guarantee arrangements from 1 January 2005. Employees will still be provided with information on at least an annual basis from their superannuation fund and many will receive information more frequently on pay slips as required by various Australian workplace legislation and awards.

After listening to the concerns of business, the government, in schedule 6, is implementing further refinements to the consolidation regime. The refinements provide greater flexibility and certainty to certain aspects of the consolidation regime. This bill clarifies the consolidation cost setting rules with respect to the source of profit distributions, undistributed profits and deferred tax liabilities. The refinements also ensure that the head company of a consolidated group will receive a credit in circumstances where amounts are withheld because no Australian business number or tax file number has been quoted. Generally, these amendments take effect from 1 July 2002, which is the commencement date of the consolidation regime.

Schedule 7 amends the application of the first child tax offset, or the baby bonus, in relation to adoptive parents, to ensure that, in line with the government's original intention, adoptive parents are not disadvantaged with respect to their entitlement to the baby bonus. These amendments will allow adoptive parents, once they are legally responsible for an eligible child, to retrospectively lodge a claim for the baby bonus for the period between the date they commenced care of the child and the date they were granted legal responsibility for the child. These amendments will apply from 1 July 2001.

Lastly, this bill makes a technical correction in the commencement provision applying to the franking deficit tax offset provisions for life insurance companies in schedule 7 of the Taxation Laws Amendment Act (No. 8) 2003.

Full details of the measures in this bill are contained in the explanatory memorandum.

I commend this bill and present the explanatory memorandum.

Debate (on motion by Mr Edwards) adjourned.