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Thursday, 13 May 2010
Page: 3635


Mr NEUMANN (11:47 AM) —I speak in support of this legislation. I think the Tax Laws Amendment (2010 GST Administration Measures No. 2) Bill 2010 makes an important difference to assist small and large businesses. Schedule 1, in particular, makes a big difference in ensuring more principled and flexible rules are available to GST groups. Companies can combine in joint venture arrangements to ensure that they improve their cash flow and their compliance costs. To do this, they need the approval of the Commissioner of Taxation, which can take a considerable period of time, as anyone in business knows—anyone who has worked in commercial law or corporate law will understand that that is the case. Currently there are restrictions on the dissolution of a group and amendments of a group, and there is uncertainty about liability issues where they are joint and several, so these amendments are an important improvement in business arrangements for corporate Australia. They will reduce compliance costs and increase certainty by improving the methods by which the Commissioner of Taxation can approve these arrangements.

The amendments also make a difference in relation to business arrangements. It is enormously frustrating for businesses, which have to deal constantly with the obstacles, irregularities and inefficiencies in our tax system. The improvements here, which allow self-assessment on eligibility rather than requiring the Commissioner of Taxation’s approval, will make a big difference. I think they are a good and more flexible arrangement for business in this economy. So schedule 1 makes a significant difference to business arrangements for corporate Australia, and I support this schedule in particular.

Schedule 2 deals with the adoption of rules in relation to indirect taxes and excise. Tax rulings are extremely important for business. I can tell you that, when a client comes to speak to an accountant or a lawyer about a tax problem, it is fantastic when that lawyer or accountant can say: ‘There’s a tax ruling on that. I can just point it out.’ It is a formal mechanism that the Australian Taxation Office can use to interpret the law. We know that happens every day for corporate Australia. We also know that the interpretation of those laws by the Commissioner of Taxation is important to clarify certain inconsistencies in business arrangements. The commissioner does not always get it right, and we have seen that in terms of litigation. However, we want to make sure that taxpayers can be certain, confident and reassured that their tax liabilities are consistent with the commissioner’s interpretation of the law.

Currently, there is no framework for GST rulings, and there have been submissions made to the Board of Taxation about that. The amendments before us include indirect tax rulings, excise advice and the general rulings regime. This is a sensible, moderate and reasonable approach and an important reform for corporate Australia, and it will go a significant way towards ensuring that GST, excise and indirect tax rulings make a big difference to the lives of companies and individuals involved in business arrangements.

The third schedule is probably the one that makes the most difference to the average individual taxpayer and small business across the country. We know that you can only claim an input tax credit if there is a tax invoice. We also know that there are particular requirements to ensure that tax invoices comply with a defined set of requirements. Not everyone who sets up a business will have had prior business experience. Not everyone who opens a newsagency, a fish and chip shop or a flower shop or who leaves a building company to work for themselves as a tradesman will have had prior business experience. Hence, they will not get it right every time they deal with tax laws. The invoices they present will not always comply with the particular prescriptive requirements of the tax legislation; therefore, any flexibility in the legislation makes sense with respect to small business particularly.

When suppliers claim an input credit, the schedule allows for a more reasonable approach to be taken where the tax document contains some minor errors. This seems to be prudent and sensible. If there are fundamental mistakes in a person’s documentation—let us say, it does not even look, smell, feel or taste like a tax invoice—then of course it is not a tax invoice. But we want to make sure that, if there are minor errors, people can claim their input tax credit and not worry that there might be problems. Sometimes this can mean thousands of dollars for small and medium sized businesses. This amendment will make a difference. Minor errors can of course frustrate compliance costs for small business, so the changes here will make a difference. They operate from the middle of this year.

We think these are important changes. We think they will improve the flexibility of our economy, assist more businesses, allow recipients to treat documents as tax invoices where there are minor changes. That will make a big difference, particularly for small business in my area. We do not have many large businesses in the Ipswich and West Moreton area; however, our many small business operators are the backbone of the economy. This is also the situation for many small country towns and rural communities as well as metropolitan Ipswich. So we think this legislation will make a difference.

I am happy to support the legislation because it helps corporate Australia—large businesses in Sydney, Melbourne and Brisbane—as well as small businesses in places like Boonah, Laidley, Kalbar, Beaudesert and other places up in the Somerset region which I know need certainty with respect to these matters.