Senator NEWMAN (Social Security) (5:19 PM) —I table a revised explanatory memorandum relating to the Comprehensive Nuclear Test-Ban Treaty Bill 1998 and I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard .

Leave granted.

The speeches read as follows—

Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Bill 1998

Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Bill 1998

SOCIAL SECURITY AND VETERANS' AFFAIRS LEGISLATION AMENDMENT (RETIREMENT ASSISTANCE FOR FARMERS) BILL 1998

The purpose of this Scheme is to meet welfare and adjustment objectives by providing a three year "window of opportunity" for low income, age pension age farmers and their partners to gift the farm to the younger generation without affecting their access to the age pension, and to retire from farming with dignity.

Madam President, this measure is targeted at those farm families who are in hardship because their businesses are capable of supporting only one family but are being required to provide a living for two or more families. It will remove a significant barrier to the intergenerational transfer of the family farm in such situations.

Eligible farmers will be able to gift their farm enterprises, with a net value of up to $500,000, to family members of a younger generation who have been actively involved with the farm. This will allow those farmers to retire and have immediate access to the age pension. The family farm will no longer be required to support two or more generations.

The bill provides for the Scheme's commencement from 15 September 1997, although people who transferred their farms in the preceding five years might also be able to benefit from the Scheme. It is intended that the Scheme will operate for three years only, that is, until 14 September 2000.

There are several elements that need to be met for a retiring farmer to qualify for the age pension under the Scheme. I will outline some of them.

The Scheme will be open to farmers of age pension age who owned farming property as at 14 September 1997, and have owned a farm or farms for at least 15 years or have been actively involved in farming for 20 years, subject to the limitations on property value and income.

Madam President, the net value of the family farm can be up to $500,000, not including farm debts. However, where a farmer wishing to retire currently owns a farm in partnership with an eligible descendant, and wishes to transfer his or her share of the farm to that person, only the retiring farmer's share of the equity in the farm will be included when valuing the farm.

The farmer's total income over the 3 financial years prior to the transfer can be up to the applicable age pension rate, depending on marital status. Any losses from the farm can be used to off-set other income including non-farm income. Social Security and Veterans' Affairs income support payments as well as Austudy payments are not treated as income for these purposes.

If a farmer decides to retain a life interest in their home on the farm or excise their home from the remainder of the farm, the value of the home and of any surrounding land of up to two hectares that is used for domestic purposes will also be deducted from the value of the farm being gifted. The farmer can continue to live on the farm.

The member of the younger generation to whom the farm is being gifted is required to have been actively involved in the family farm for the preceding three years. However, the bill also allows a discretion to cover situations where an eligible descendant has been undertaking studies relevant to farm management or has been forced to seek employment off the farm due to exceptional circumstances such as drought.

Madam President, I commend the bill to the Senate.

Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Bill 1998

Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Bill 1998

CUSTOMS TARIFF AMENDMENT BILL (No. 1) 1998

The Customs Tariff Amendment Bill (No. 1) 1998, which is now before the chamber, contains a number of amendments to the Customs Tariff Act 1995. I will briefly outline the amendments of substance.

Schedule two of this bill commenced on the third of July 1997. The customs duty on aviation gaso line (avgas) contains a component to recover the costs of aviation terminal and enroute navigational services provided to the general aviation sector by Airservices Australia. In reviewing the costs of providing these services for 1997-98, Airservices Australia proposed a reduction in the duty of 0.6 cents per litre on avgas, which represents a five per cent decrease in real terms.

This reduction in costs to aircraft operators follows the implementation of an election commitment by this government. This commitment was to freeze the airways component of avgas duty in 1996-97, except for movements in the consumer price index, while working towards the implementation of a fairer system of funding for the general aviation sector's contribution to Airservices Australia.

The component of duty on avgas payable to the civil aviation safety authority for the costs of aviation safety regulation remains unchanged.

Madam President, the amendments contained in schedule three of this bill came into effect on the thirty-first of January 1998. The reduction in duty rates on avgas in schedule two of this bill would have been superseded by the commencement of the Customs Tariff (Fuel Rates Amendments) Act 1997 on that date. By customs tariff notice published in a Commonwealth gazette on the eighteenth of February 1998, the reduced customs rate of duty on avgas was reinstated.

The other amendment contained in this schedule is of an administrative nature and results again from amendments contained in the Customs Tariff (Fuel Rates Amendments) Act 1997. Section nineteen to the Customs Tariff Act 1995 contains a table of paired customs subheadings and excise items. This section provides the duty nexus between customable and excisable revenue goods by allowing customs rates of duty to be adjusted in line with movements in the excise rate of duty.

The amendment amalgamates the table existing prior to the thirty-first of January 1998 with the new aspects introduced by the customs fuel rates legislation.

Schedule four is operative from the first of March 1998 and creates a new item sixty-four in Schedule four to the Customs Tariff Act 1995.

At its meeting on the twenty-seventh of August 1997, the ministerial committee on the Sydney 2000 Olympic Games agreed to introduce certain import concessions for the 2000 Olympic and paralympic games and associated test events. As a result, amendments to the temporary imports provisions have been finalised and a new passenger concession by-law for unaccompanied baggage for Olympic family members has been implemented by the Australian Customs Service.

This amendment creates a new item in schedule four to allow non-personal and non-commercial goods to be imported into Australia duty free by Olympic Games family members.

The reality of the Olympics and associated events is that members of the Olympic family will bring with them a variety of goods which are to be used in a non-commercial manner. These will include give-aways, hospitality samples and other consumables that will be used for team promotion and for cultural and hospitality activities.

It is intended that the concession will not apply to tobacco and alcoholic products or extend to any importations of a commercial nature.

Similar concessions were offered at the Nagano winter Olympics and by host countries at previous summer and winter Olympic and Paralympic games.

The amendments contained in the other schedules of this bill are of an administrative or technical nature and will have no financial impact on the importing public.

I commend the bill.

Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Bill 1998

Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Bill 1998

TAXATION LAWS AMENDMENT BILL (No. 4) 1998

The Bill gives effect to some of the measures announced in the 1997-98 Budget and in other Government statements. The Bill also contains other amendments to the Income Tax Assessment Act and the rewritten income tax law.

Fringe benefits tax

The Bill will implement changes to the FBT law relating to record keeping exemption arrangements and provide an exemption from fringe benefits tax for benefits arising from an employer's participation in certain student exchange programs.

The record keeping exemption completes the FBT measures proposed by the Government in response to the recommendations made by the Small Business Deregulation Task Force. Legislation has already been introduced to deal with taxi travel, car parking and the arranger provisions. All these measures will reduce compliance costs for most employers and, in particular, for small businesses.

The record keeping measure introduced in this Bill is specifically targeted at those employers whose fringe benefits in a base year do not exceed an indexed threshold amount and who do not significantly alter the fringe benefits provided in later years. The benefit threshold will commence at $5,000 for the 1996-97 FBT year.

Having established a base year, employers will not be required to keep FBT records and will have their FBT liability in future years determined from the base year taxable benefits. This measure will apply to benefits provided from the date of Royal Assent and to FBT liabilities from the 1998-99 year.

The FBT exemption for benefits arising from an employer' s participation in an approved student exchange program will apply from the FBT year commencing 1 April 1996. This exemption demonstrates the Government's commitment to reducing compliance costs.

Depreciation of plant previously owned by exempt entities

The Income Tax Assessment Act 1997 is being amended to set a common base for the depreciation deductions for plant that can be claimed by exempt entities which first become taxable on or after 4 August 1997 in relation to plant they already own, and by taxable entities which purchase plant from an exempt entity in connection with the acquisition of a business on or after 4 August 1997.

The depreciation deductions available to such entities will be limited to a choice between the notional written down value of the plant at the time it enters the tax net and its undeducted pre-existing audited book value at that time.

Arrangements treated as a sale and loan and limited recourse debt

The Bill will implement a measure announced in the 1997-98 Budget to prevent taxpayers obtaining deductions for capital expenditures in excess of their actual outlays. The measure will apply where the expenditure has been financed by hire purchase or limited recourse finance and the debtor does not fully pay out the capital amounts owing.

In those circumstances, an amount will be included in the debtor's assessable income to compensate for any excessive deductions that were allowed to the taxpayer. The adjustment to taxable income will reflect amounts that remain unpaid when the hire purchase or limited recourse debt arrangement is terminated.

This amendment applies to debts that are terminated after 27 February 1998.

An associated amendment will treat taxpayers who finance assets by hire purchase as the owners of those assets for purposes of applying the various capital allowance deductions. Hire purchase and instalment sales transactions will be treated as the equivalent of sale, loan and debt transactions in assessing the taxation liability of the financier and the hire purchaser respectively.

This amendment applies to arrangements entered into after 27 February 1998.

Franking credit and dividend streaming

The Bill will implement one of the measures announced by the Government in the 1997-98 Budget to prevent franking credit trading and dividend streaming, namely, the introduction of a rule to limit the source of franking credits available for trading.

Subject to transitional measures explained in the Bill, these amendments apply from 7.30 pm AEST, 13 May 1997.

Sales Tax (Exemption and Classification) Act 1992

The Bill amends the sales tax law to correct a deficiency in the sales tax law to the exemption for goods incorporated into property owned by, or leased to, always exempt persons or the government of a foreign country.

Access to the exemption will now be available only where the property is occupied principally by an always exempt person or the government of a foreign country or where the property is used principally for the provision of services to an always exempt person or government of a foreign country.

Commercial debt forgiveness

This Bill contains consequential amendments arising from changes to the capital loss rules in Taxation Laws Amendment Act (No. 2) of 1997. The technical amendments will not affect the practical effect of the debt forgiveness provisions. These amendments apply to debts forgiven after the date of introduction of this Bill.

New South Wales Police Integrity Commission

The Bill amends the Taxation Administration Act 1953 to enable the Commissioner to disclose information acquired under a taxation law to the New South Wales Police Integrity Commission.

Deductions for gifts

On 10 October 1996 the Treasurer announced, in Press Release No. 102, the introduction of a tax deduction nor gifts of $2 or more to the Menzies Research Centre Public Fund. As announced at the time, this is consistent with the arrangements as apply to the Evatt Foundation, which has had tax deductibility status since 1981.

The Bill will give effect to the Treasurer's announcement and amend the Income Tax Assessment Act 1997 to allow income tax deductions for gifts of $2 or more to the public fund. Income tax deductions will be available for donations made to the fund from 2 April 1998

Technical amendments

Schedules 6, 7 and 8 contain a range of technical amendments to the rewritten income tax law to correct minor errors in translating the fine detail of the 1936 Act.

Schedule 9 includes in the 1997 Act, the rewritten education and training payments provisions of the 1936 Act as amended by Taxation Laws Amendment Act (No. 1) 1997 and proposed amendments contained in the Social Security (Youth Allowance Consequential and Related Measures) Bill 1998. It also closes off the 1936 Act provisions.

Full details of the measures in the Bill are contained in the explanatory memorandum circulated to honourable senators.

I commend the Bill to the Senate.

Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Bill 1998

COMPREHENSIVE NUCLEAR TEST-BAN TREATY BILL 1998

The Comprehensive Nuclear Test-Ban Treaty Bill 1998 will give effect to Australia's obligations as a party to the Comprehensive Nuclear Test-Ban Treaty (CTBT), and will provide a legislative basis for its national implementation.

I would like to say how pleased I was to see such strong bipartisan support for the CTBT Bill in the House of Representatives. It is a reflection of the strength of feeling held by both the Australian parliament and the Australian community that we should take a determined stand in our foreign policy in support of nuclear non-proliferation. I hope that we will see the same level of support for the CTBT Bill here in the Senate. Australia is strongly committed to the global nuclear non-proliferation regime as a key element of our national security and we should continue to maintain the very significant reputation that we have built up over the past 30-odd years as a constructive player in the establishment of that regime.

The CTBT bans all nuclear weapons test explosions and all other nuclear explosions for all time. It marks a watershed in international efforts to address the global threat posed by the proliferation of nuclear weapons, and is an indispensable component of the international nuclear arms control regime. Over the past 30 years, this regime has succeeded beyond all expectations in constraining the non-proliferation of nuclear weapons. Almost every country in the world is committed never to acquire nuclear weapons, and never again to engage in the type of spiralling nuclear arms race which occurred during the years of the Cold War. 186 countries, including the five nuclear weapon states—China, France, Russia, the United Kingdom and the United States—have signed the Nuclear Non-Proliferation Treaty (NPT). 149 states have already signed the CTBT. Fourteen states, including two nuclear weapon states—France and the United Kingdom—have ratified, while many others are preparing to do so.

The recent nuclear tests by India and Pakistan highlight the importance of the CTBT. The Treaty provides the firmest international and political basis on which to condemn India's and Pakistan's actions. The Government's response to Indian and Pakistani testing has been unequivocally strong. India and Pakistan have been similarly castigated by many countries individually and in international fora, including at a Special Session of the Conference on Disarmament (CD) in Geneva and the United Nations Security Council. The Government will be unremitting in our efforts to bring India and Pakistan into the global non-proliferation regime. We call again on both India and Pakistan to sign and ratify the CTBT without condition, to accede to the NPT and to support the commencement and early conclusion of a Fissile Material Cut-Off Treaty.

The Minister for Foreign Affairs, Mr Downer, signed the CTBT on behalf of Australia when it was opened for signature in New York on 24 September 1996. Early ratification by Australia is critical. We are one of the forty-four states whose ratification is required in order for the Treaty to enter into force.

Australia is universally recognised as a key player in the adoption of the CTBT and we can be justifiably proud of the part we played in achieving this outcome. We were instrumental in accelerating the negotiations in the Conference on Disarmament (CD) in Geneva. Following the failure to achieve final consensus in the CD on a draft Treaty text which was all but agreed, the Government initiated action to take the unprecedented and courageous step of submitting the Treaty to the United Nations General Assembly for adoption in September 1996. Following intensive work by members of the Government and Australia's diplomatic missions, the Australian-sponsored resolution attracted the co-sponsorship of 127 countries, and was adopted with the support of an overwhelming majority of the international community from countries in all regions of the world. This was a truly great achievement by the Australian Government.

On presenting this bill, I would like to remind the Senate of Australia's long-standing and well-deserved reputation as a leading international player on arms control issues. That reputation has been enhanced by this Government's imaginative and successful efforts in taking the arms control agenda forward.

This Government's commitment to the cause of disarmament is evident in our substantial contribution to the international movement in favour of the total elimination of anti-personnel landmines (APL) as a weapon of war. In December 1997, Australia joined over 120 countries in signing the Ottawa Treaty banning landmines. The next step is to get negotiations under way in the Conference on Disarmament as soon as possible as a way of complementing the Ottawa Treaty and tightening the clamps on the global supply of landmines. I was pleased to see the reappointment of Australia's Ambassador for Disarmament, John Campbell, to the position of Special Coordinator for anti-personnel landmines in the Conference on Disarmament, and we are working hard in Geneva to develop an ad hoc committee mandate for negotiations to ban exports, imports and transfers of APL.

On 3 February 1998, in his second address to the Conference on Disarmament since becoming Minister for Foreign Affairs, Mr Downer urged the CD to begin immediate negotiations, not only on a ban on landmines transfers, but also on a Fissile Material Cut-Off Treaty. Mr Downer has instructed that Australia be active in Geneva and elsewhere in promoting this so-called "Cut-off" Treaty as a priority arms control objective for 1998 and beyond.

In another area of the arms control agenda, Mr Downer recently announced a new initiative to strengthen the Biological Weapons Convention (BWC). The Government's initiative is aimed at fast-tracking the negotiations on a verification system for the BWC, and highlights our serious commitment to preventing the spread of weapons of mass destruction.

By signing the CTBT, Australia has aligned itself with the basic obligation not to carry out any nuclear weapon test explosion or any other nuclear explosion. Part 2 of this bill makes it an offence to engage in activities prohibited under the Treaty and provides appropriately severe penalties of up to life imprisonment for offences committed under clause 6 relating to the Treaty prohibitions.

The CTBT will establish an intrusive verification regime. The International Monitoring System (IMS), which is the principal arm of this regime, will be a worldwide network of over 300 monitoring stations and laboratories. Australia will host 21 monitoring stations and laboratories. Part 4 of the bill provides for the establishment and the operation of monitoring facilities on Australian territory, including authorisation to gain access to these facilities.

Part 3 of the bill covers the arrangements which would apply should an on-site inspection be called on Australian territory. Part 5 of the bill provides for the establishment of a National Authority to manage Treaty implementation in Australia.

I commend the bill to the Senate and present the explanatory memorandum to this bill.

Debate (on motion by Senator Denman) adjourned.

Ordered that the bills listed on the Notice Paper as separate orders of the day.