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Thursday, 14 February 2013
Page: 1429

Ms OWENS (Parramatta) (12:19): I am very pleased to speak on the Tax Laws Amendment (2012 Measures No. 6) Bill 2012. I quite often speak on tax law bills and have done so since I was first elected nine years ago. I have said in the other place, where they are usually debated because they are usually non-controversial, that I find the TLAB bills, as they are known, really quite interesting. In many cases they incorporate policy decisions made elsewhere and you can see the work of the government in practice as they implement what are sometimes quite small changes. They are usually non-controversial, because usually they deal with a range of largely administrative matters.

This bill deals with a number of matters, seven in fact. Some of them are largely administrative and some are applying decisions that reflect requests from the community. But they are always interesting and they are always worth speaking on. This one has seven schedules. The member for Fraser has already spoken on schedule 2. I am going to skip over schedule 1 because it is the one I find quite fascinating. It is concerned with native title and I am going to come back to that one. I am going to run quickly through the others.

Schedule 2 updates the list of deductible gift recipients; TLABs often do that. These are lists of important organisations that are entitled to tax deductible gift recipient status. This TLAB adds AE1 Incorporated, which seeks to relocate and honour of the crew of Australia's first submarine; Teach For Australia, which seeks to attract top graduates to teach in disadvantaged communities—and we heard the member for Fraser speak very highly of that program; and Australia for the UNHCR, which raises funds to support the humanitarian programs of the United Nations High Commissioner for Refugees. Again, it is a very small schedule that adds three organisations to the list. But if you look at the history of all the TLABs, they reflect the importance these extraordinary community organisations that do such good work.

Schedule 3, which I am very surprised to hear the opposition is not going to support, extends the immediate deductibility of exploration expenditure already provided to mining and petroleum explorers—which they already get, but this schedule extends it to geothermal energy explorers. The intention of this schedule is to restore competitive neutrality in the sector, and to support a clean energy source.

Earlier, I heard the shadow Treasurer state in this debate that the opposition was going vote against it because somehow it was raised in the development of the minerals resource rent tax. They do not like that, so they do not like anything that was mentioned in the same sentence as it was. But this issue is not associated with the minerals resource rent tax. It was raised by the Policy Transition Group—that is certainly true—but that was completely outside the terms of reference for them. They raised it as an anomaly when they had the chance during the inquiries, and they provided advice to the government that the tax law should be amended to take out that anomaly and restore competitive neutrality. This is something that the industry wants, it is something that other sectors of the industry already have and it is a perfectly logical extension which takes out an anomaly and restores competitive neutrality. It is going to be very difficult for the opposition to explain why they would vote against this, if their only reason is that it was once mentioned in the same room as people discussing the minerals resource rent tax. That is what we heard from the shadow Treasurer earlier.

Schedule 4 extends the interim streaming provisions for managed investment trusts from 2012 to 2014. The government had already made the announcement that they would defer until 2014 the commencement of the new overall regime for managed investment trusts and the new general trust income rules. The purpose was that by providing a coordinated commencement of all the different systems, compliance costs would be reduced for taxpayers. It was an announcement already made and which is now incorporated in the system through this TLAB No. 6.

There was also schedule 5, which applies an income-based means test to the rebate for medical expenses. There has been some argument, particularly from the AMA, that it should not apply to the Medicare safety net. However, it does result in a far better targeting of health expenditure and a more sustainable health system as part of a range of improvements by this government to achieve just that—to ensure that we spend health dollars in the best possible places for the community.

Schedule 6 amends the definition of limited recourse debt. Again, this is quite an interesting one. Following the High Court case in 2011, where BHP Billiton secured double deductions for its iron briquette plant in Western Australia, it appeared that the High Court had interpreted the law in a way that industry and the tax office had—well, put it this way: the tax office and industry seem to have accepted the ATO interpretation for many years, but this High Court ruling essentially affected that interpretation and it made it possible for companies to double dip. This schedule 6 essentially reinstates the ATO's interpretation and, again, it is simply putting back in place what was thought to be the case before that High Court case in 2011.

Schedule 7 removes the concessional fringe benefits tax treatment for in-house fringe benefits which are accessed through salary sacrificing. Again, that is an equity issue that puts employees on a level playing field.

Schedule 1 is the one I want to talk about for the remainder of my time, because it is a very interesting one and a really, really important one. It concerns native title, which is something that should be of concern to us all. It is very much a part of our land and it is very much a part of who we are as a people.

Native title, in the sense of traditional ownership of the land, has been in existence in Australia for tens of thousands of years. Not all of us, including me, understand exactly what that means—I am not sure I ever will—but I have a great respect for the Indigenous owners of this land and a trust in them about the importance and the value of this ancient cultural tradition. We as a nation benefit from the stories, the philosophies and the approach to land management that our Indigenous people bring to the table.

The legal concept of native title is one that was created back in the early nineties to recognise in western law this communal ownership and this ancient cultural tradition—not a perfect fit between western law and traditional Indigenous cultural beliefs, but it was the best we did at the time.

Traditional ownership is communal, of course, and most western law concerning ownership is individual. It is actually quite a complex area, yet there was some very good work done in the early nineties with the Native Title Act 1993 and amendments to that in 1998 which first introduced issues of tax into native title. The first Native Act 1993 was silent on the tax treatment of native title. So, we have come a long way there.

Essentially, this schedule puts into law what the Australian Tax Office has been doing for quite some time on native title. I will outline briefly what it does. It has a very narrow purpose: it simply seeks to clarify that payments and other benefits made under native title agreements are not subject to income tax, and that certain transfers of native titles to trusts do not attract capital gains tax. It sounds very simple, but up until now every transfer of services or cash as compensation for either extinguishment of native title or impairment of native title was handled by the tax office on a one-on-one basis and people had to seek a private binding ruling for every single decision.

What this schedule does is really quite simple: it takes the range of decisions that the tax office has been making, and is continuing to make, and puts them into a form in tax law. So for people who are approaching their compensation payments within that framework it creates a lot of certainty, because that framework is now set in law. It reduces a hell of a compliance burden on a whole range of people who will now know exactly what the law is. People who are slightly outside the range of transactions included in this schedule will still apply for private binding rulings. But there is always a group of people just outside the law, no matter where you put the law, who will apply for binding rulings.

We did have a number of contributions to the Economics Committee which expressed concern that, by formulating it and putting it into law, you might encourage people to move to within the bit that is now covered by the law and away from other options. That is true for any law. But the creation of certainty for a broad range of stakeholders in this matter is something of extraordinary value. I will say it again: no matter where you put the line of the law, you will have movement across that line, with private binding rulings on one side and certainty on the other—that is true for all laws.

The really interesting bit about this schedule is the things that it does not do. The vast majority of people who have commented officially on this schedule have raised issues that extend beyond the range of this schedule—and that, in many ways, is the part that is most interesting. Native title, as a legal concept, is around 20 years old. The previous Liberal government, in 1998, committed to further work on the tax treatment of native title. That stalled, and it essentially stayed stalled until we started receiving, in 2007, a growing number of papers on the intersection between native title and taxation law. That is probably what you would expect because, as a legal concept, it has been around for 20 years and for much of that 20 years Indigenous people have been arguing about whether or not they can get native title—they have actually being fighting for it for 20 years.

When you go to the Northern Territory, as my committee was lucky enough to do when we did the inquiry into Wild Rivers, and you talk to the incredible diversity of Indigenous groups up there, you see that the actual return to country and the confirmation of native title and what that means in a Western legal system is still quite new. So what we are seeing now is some really interesting exploration by some growing and increasingly independent groups—some quite small. The situation in the older days, when we had larger land councils and some of the governing and decision making bodies were city based, is exploding in many ways into a situation whereby we have myriad smaller organisations and powerful local voices. So we are seeing a growth in the range of options that Indigenous people have for converting what is a traditional cultural ownership into an economic asset and benefit for future generations. It is a really interesting time for our Indigenous community and it is a really interesting time for our nation. We are going to see over the next decade, I suspect, a growing range of ways for Indigenous communities to benefit from something they have always owned and of which they can now enjoy the benefits of ownership within Western law.

So I will restate the conclusion that the Economics Committee made by saying that I personally look forward to the next few years, as I hope governments both now and in the future will open up that dialogue with Indigenous communities while they work out exactly the best way to convert that traditional ownership into an economic benefit, and governments work very seriously with them in working out how our tax laws and our definitions of ownership et cetera can be amended to reflect their vision for the future ownership of their very important assets. For our nation this is probably one of the most important things we will do for our soul in the next 10 years. If we have not woken up yet to how valuable these traditions are to us all, and how they do and should impact on the way we think of our own land and the way we walk in it, then we are missing out on something very special that lies within us.

I commend the Assistant Treasurer for this bill. It has seven rather important schedules. I commend him also for simplifying and confirming the treatment of native title as it is currently treated by the ATO in law, to bring certainty to a very important range of stakeholders. I commend the bill to the House.

Debate adjourned.