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Tuesday, 21 August 2012
Page: 9401


Mr NEUMANN (Blair) (17:36): I rise to speak in support of the Tax Laws Amendment (2012 Measures No.4) Bill 2012. Like the member for Casey, I intend to deal with the second schedule and the third schedule and then come back to the first. The second schedule deals with incapacitated entities—that is, companies in liquidation. It inserts a tie-breaker provision ensuring that where a representative of an incapacitated entity is in possession or control of the property of a corporation, the GST rules apply to creditors and debtors instead of supplies of property that the representative makes in the satisfaction of a debt that the incapacitated entity owes to the representative. This provides some certainty in the law, particularly for taxpayers who are operating in the mortgage lending sector, which are usually banks or credit unions. It is supported by the industry and is a sensible provision.

The third schedule deals with the consolidation regime announced by the then Assistant Treasurer and Minister for Financial Services and Superannuation back in November 2011. It implements an outstanding element of that announcement, namely, that no interest or penalties are payable on overpayments or underpayments of tax because of a claim for a deduction which is allowed or disallowed as a result of those changes to the consolidation regime by the Tax Laws Amendment (2012 measures No.2) Bill 2012.

The first schedule is what I really want to talk about. It comes about by an old standing law which operated from the days of World War II, back in 1945—that is, amendments to the living-away-from-home allowance. This is not something that applies to fly-in fly-out workers. I have about 3,500 of those workers in my electorate travelling to Central Queensland and Western Australia for work. Many of them have a history of working in the coal mining industry and in other mining in and around Ipswich. They are not actually affected by this particular legislation.

There are a number of deficiencies in the current legislation. The living-away-from-home allowance has had many guises and many amendments made to it over the years. But there are mistakes or problems in this area and there are probably three that we can identify. The first is the problem of somebody not actually maintaining a home in that particular location—that is, they do not have their old home or are renting it out and so they are still living away from home. It is not technically their home so they are still able to claim the concession. That is a problem because it allows them to claim a concession that other taxpayers would not be able to claim in the circumstances.

The second problem was if they claim, for example, in excess of their actual expenditure on accommodation and food then they are still able to claim that tax concession in that particular matter. (Quorum formed)I always thought that the Liberals were interested in tax laws but obviously not. I was going through explaining why this particular tax law was being exploited and abused and obviously they are not interested in good tax law reform. I am glad that my colleagues are so willing to come here and listen but, sadly, they have gone—although I have got the former Speaker here.

The third problem in this legislation was that it could go on for years so it was not a temporary measure. It allowed a small number of people with high incomes to gain concessions which in no way reflected their true income. It simply was not fair or reasonable to ordinary taxpayers who could not get this kind of tax perk. The fact that by closing this down, according to the figures received, it would provide about $1.9 billion over the forward estimates to the taxpayer is a demonstration that this particular method by which people were being paid was being abused. Sadly, it went on for a while and has been a problem.

If you were to give me $1.9 billion, there would be a lot of things I could do in my electorate. If you were to divide $1.9 billion among the 150 members of this House, I am sure a lot of people would spend that money more wisely than by allowing lurks and perks for people who are simply getting taxpayer-funded tax breaks. I think this is good law and this is a sensible provision.

There was extensive consultation on the provision, as the minister said in his second reading speech. The matter was referred to the House of Representatives Standing Committee on Economics, and I thank them for their assistance. I want to make it clear that, with the tax concessions for fly-in fly-out arrangements, employees will not be subject to the 12-month limit. We are also saying that a home in Australia has to be maintained while they are living away from home for work purposes. I think that is reasonable. If they are saying they are living away from home, they should retain a home to get the living-away-from-home-allowance tax concession. The 12-month limit for accessing this tax concession is reasonable in the circumstances.

The matter was referred to House's economics committee. The member for Casey made out that this was some sort of aberration and a failure of the government. It is quite common for parliament to refer bills to parliamentary committees for consideration. I am sure all the people in this place have considered bills in their various committees—for example, on the Standing Committee on Social Policy and Legal Affairs or the economics committee or any of the committees that consider bills in this place. The economics committee called for and received submissions in relation to this. The government has responded to the recommendations of the House economics committee. There is nothing untoward or unusual about that. Governments respond to committees' recommendations all the time. Indeed, under this parliamentary arrangement they are duty bound to do so and within a time limit.

The amendments make it clear that we are dealing with what have been described in the past as 'unintended consequences' for this legislation. A number of things are being done, and I understand that the Assistant Treasurer will deal with this matter further in the chamber shortly. As the member for Casey touched on, the recommendations include returning the tax treatment of all living-away-from-home allowances and benefits to a fringe benefit tax system. I agree with the House economics committee. It seems to be a sensible recommendation that has been taken up by the government. Broadening the concession provided to fly-in fly-out and drive-in drive-out workers to cover those workers who provide their own transport and those whose transport is provided by their employer is another sensible suggestion by the committee. Clarifying the circumstances in which the 12-month time limit may be paused—giving the employer an option to pause, with the effect that no concession can be obtained during a pause—is another sensible suggestion.

I thank the committee, chaired by the member for Parramatta, and I thank all those who participated in the inquiry for coming up with some very good suggestions. There are others as well, but I will not take up the time of the chamber by mentioning those. I thank those who made submissions. It is a prudent way for the public to have their say. I thank the Assistant Treasurer for his commitment. That $1.9 billion can be better spent on roads, hospitals and schools than by being given out in lurks and perks for those who are not the average taxpayer who might work in a shop or an accounting practice and go every day to and from work by car, bus or train and not enjoy the concessions available to a few, who, sadly in many cases have exploited the circumstances of the living-away-from-home allowance.