Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Tuesday, 30 October 2012
Page: 12517


Mr BRADBURY (LindsayAssistant Treasurer and Minister Assisting for Deregulation) (12:45): Firstly I would like to thank those members who have contributed to this debate. The Tax Laws Amendment (Clean Building Managed Investment Trust) Bill 2012 provides for a final withholding tax rate of 10 per cent on fund payments from eligible clean-building managed investment trusts made to foreign residents in countries with effective information-exchange agreements. I understand that some members would prefer the 10 per cent withholding tax rate to be more widely available than this legislation provides. I note that broadening the scope of this concession would have fiscal costs. I also note that fund payments from managed investment trusts that are not eligible for this measure can be subject to a still concessional 15 per cent final withholding tax rate. This rate is half the 30 per cent non-final withholding rate from when we came to office, and half the 30 per cent that applies to company tax.

For these amendments to apply the managed investment trust must invest in new energy-efficient office, hotel and retail buildings that commenced construction on or after 1 July 2012. A proposed amendment to the bill, tabled today, will ensure that any works preparing the site for construction, and works undertaken below the lowest level of the proposed building, do not represent the commencement of construction for the purposes of the measure. This will make it clear that, in determining if the bill qualifies as having been commenced on or after 1 July 2012, the time of the commencement of the construction of the building is only determined by the time the works on the lowest level of the building, including any basement level, commenced.

This is consistent with the recommendation from the Parliamentary Joint Committee on Corporations and Financial Services, and can I acknowledge Madam Deputy Speaker O'Neill your role as the chair of that committee. I thank you for your work and for the work of your committee in preparing your very constructive report, which was reported on yesterday and recommended that the bill be passed, with this additional clarification.

I will address some of the comments made in the context of this debate by making the point that the 7.5 per cent rate that existed in relation to managed investment trusts prior to the budget measure that lifted the rate to 15 per cent was very low. If you compare it to the rates in comparable countries, competitor countries, then the government took the view that it was appropriate to ensure that we secure an adequate and a fair return on investments that do occur in this country. I also draw the attention of members in the House to the remarks contained throughout the Henry review that particularly make the point that location-specific rents are one area that government policy should be directed towards addressing in a way that will secure an appropriate return for the Australian people. That is what the budget measures did.

I also acknowledge the very cooperative way in which some other parties have engaged in discussions around this particular measure. We heard from the member for Melbourne, and from others in the other place, of the importance of ensuring that we continue to provide an adequate incentive for international capital to be invested in clean buildings in this country. The way in which that incentive will be built into our tax system is by providing a concessional 10 per cent rate in relation to distributions from managed investment trusts whose funds are directed towards investment in these clean building activities.

We believe that we have secured an appropriate and balanced outcome, one that makes sure that we continue to have very competitive rates in relation to our managed investment trust withholding rates. And notwithstanding that we also believe that we have struck the balance to ensure that the Australian people have secured and will secure an adequate return on investment and economic activity that occurs in this country, and it is important that we do secure the benefit of that for the Australian people. I commend the bill to the House.

Question agreed to.

Bill read a second time.