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Wednesday, 10 February 2010
Page: 1047


Mr PERRETT (6:14 PM) —I commend the member for Blair for his contribution. I am pleased to speak in support of the International Tax Agreements Amendment Bill (No. 2) 2009. Mr Deputy Speaker, I assure you it will be an uneventful presentation. Increasingly, trade and investment are happening on a global scale as the ease of travel and modern communications make our planet much smaller. Who would have thought that a four-wheel drive in Brisbane could affect the rice farmers of Bangladesh, or that a power station in Biloela could affect the lives of maize farmers in Burundi? To quote from a song—and I know it is one of the favourite songs of the member for Bruce, who is at the table—‘It’s a small world after all.’

Tax treaties help enable Australian businesses and our economy to enjoy the benefits of global trade and investment. In fact, Australia has tax treaties with more than 40 countries. This bill amends the International Tax Agreements Act 1953 to put into law three agreements signed in June 2009—namely, the Australia-New Zealand tax treaty, the second protocol to the Australia-Belgium tax treaty and the Australia-Jersey agreement on the allocation of taxing rights over certain income.

I will discuss the New Zealand treaty first. This treaty will modernise the taxation agreement across the Tasman. It will give greater certainty to Australian businesses looking to venture into New Zealand markets and also promote greater economic cooperation between our two countries, thus building on our long history of sporting, cultural, artistic and family links with New Zealand. I will not dwell on the underarm ball by Trevor Chappell or even the responding incident at Ballymore on 19 July 1992, when I saw Richard Loe break Paul Carozza’s nose at the end of the first half of the Bledisloe Cup match—although Paul Carozza did score a second try after that. I will not dwell on those incidents. Obviously we have many close connections with New Zealand, going back to talk of even being one nation and obviously our fighting together in World War I, World War II and beyond.

One of the main aims of the treaty is to reduce the barriers caused by the double taxation of residents of the two countries. Other elements of the treaty include: reduced withholding tax rate limits on certain dividends, interest and royalties; profits from the provision of services performed in a country are to be taxed by that country in certain circumstances; income from real property, including natural resource royalties and profits from agriculture, forestry and fishing, may be taxed in full by the country in which the property is situated; pensions will not be subject to tax in the residence country when they are exempt from tax in the country in which they are sourced; and a short-term secondment provision which will exempt individuals from being taxed by a country when they are seconded for less than 90 days. The treaty also requires Australia and New Zealand to consult at least every five years to ensure the proposed tax treaty continues to operate effectively. This bill also amends the definition of ‘dual listed company arrangement’ in the Income Tax Assessment Act 1997 to ensure it aligns with the definition in the Australia-New Zealand tax treaty.

The next treaty, the second protocol to the Australia-Belgium tax treaty, will improve the exchange of information between the two countries. Under the agreement, Australia and Belgium will be able to request taxpayer information with regard to all federal taxes. This bill requires tax administrators in Australia and Belgium to provide the information to their counterparts when requested. They will no longer be able to deny access to taxpayer information simply because it is of no interest to them or because it is held by a bank. These new measures send a strong signal to those seeking to hide information from the Australian tax office and they will greatly improve our ability to detect tax evaders.

This bill also implements the Australia-Jersey additional benefits agreement to help eliminate double taxation of certain cross-border income of individuals who are residents of Jersey or Australia. Australia has agreed not to tax government employees of Jersey working for non-commercial purposes in Australia as well as students and business apprentices. Jersey has agreed to a reciprocal arrangement for Australian government employees, students and business apprentices working or studying in Jersey. In other words, they have agreed not to milk them twice.

These three tax agreements will come into force once the countries involved have put them into law. Through our negotiations with other countries, this government is working to ensure that Australians get a fair go, even when they are working or studying overseas. This bill ensures that these Australians will get fairer tax treatment. I commend the legislation to the House.