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Monday, 24 June 2002
Page: 2438

Senator ELLISON (Minister for Justice and Customs) (4:12 PM) —I table a revised explanatory memorandum relating to the Taxation Laws Amendment Bill (No. 2) 2002 and 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—


The secret ballot process proposed by this bill will create and protect jobs by preventing unnecessary strikes. It will enhance freedom of choice for workers and strengthen the accountability of unions to their members.

A secret ballot is a fair, effective and simple process for determining whether a group of employees at a workplace want to take industrial action. It will ensure that the right to protected industrial action is not abused by union officials pushing agendas unrelated to the workers at the workplace concerned.

Australia has previously had provisions allowing secret ballots at the federal level, but they have not been a compulsory precondition to industrial action. Since 1994 some industrial action—that associated with genuine workplace bargaining—has been protected.

In view of the protections that the Workplace Relations Act 1996 provides against civil liability for industrial action taken in pursuit of enterprise agreements, it is fair that secret ballots are a precondition for protected industrial action.

Secret ballot arrangements exist in the United Kingdom, Canada, Japan, Germany and Ireland.

Secret ballot provisions have been operating in the UK since 1984. The Blair Government's Employment Relations Act 1999 retained them. Legislative requirements for secret ballots have:

· helped to significantly reduce strike activity—strikes which ultimately cost jobs;

· given union members a direct say in the authorisation of industrial action;

· encouraged greater consultation by unions of their members; and

· had the support of UK trade union leaders.

The Government's previous attempts to implement secret ballots aspects have failed. However, the issue remained a core aspect of our 2001 election policy and this bill fulfils our promise to the Australian community.

Introducing a previous secret ballots bill, the then Minister for Employment, Workplace Relations and Small Business, the Hon Peter Reith MP, welcomed further Senate Committee scrutiny, so long as such a review focussed on achieving a workable scheme, rather than providing a platform for union opposition to fundamental democratic principles.

In this bill, the Government is proposing key changes in response to concerns raised during the Senate Inquiries into the 1999 and 2000 bills. The bill also incorporates measures which ILO officials have indicated would be consistent with ILO standards.

The bill allows applications from a union or an employee who is a negotiating party for ballot orders to be made up to 30 days prior to the nominal expiry date of a current certified agreement (if any), provided a bargaining period is in place. It requires the Industrial Relations Commission, as far as reasonably possible, to determine all applications within 2 working days.

Secret ballots will not impede access to lawful protected action, but will simply provide a mechanism to ensure that protected action is a genuine choice of the employees involved.

The 2000 bill contained a strong preference for postal voting. This bill provides postal ballots as a default, but gives the Commission discretion to approve a proposal for a more effective method in a particular case. In some circumstances, the Commission could order on-site ballots. The 2000 bill required precise details of the nature of the proposed industrial action. This bill eases these requirements.

If a union applies for a ballot, only union members whose employment would be covered by the proposed agreement would be entitled to vote. Where employees seeking a non-union agreement make an application, all employees whose employment would be covered by the proposed agreement would be entitled to vote.

In addition, employees can appoint an agent to advance these processes in order to ensure their anonymity.

Only those union members or employees entitled to vote would be able to take any subsequent authorised protected industrial action.

Following discussion with ILO officials and concerns raised during the Senate review, only 40 per cent of eligible voters need to participate.

The 2000 bill required ballot questions to include the date on which industrial action would commence. Concerns were raised that this locked parties into a pre-determined path that may not reflect progress made during agreement negotiations. This bill allows for industrial action to commence within a 30 day period, beginning from the date the ballot result is declared, or the nominal expiry date of the relevant certified agreement (whichever is the later). The Commission may extend this validity period once, with the agreement of the parties.

The bill makes the Commonwealth liable for 80% of the reasonable ballot cost, which the Commonwealth will pay directly to the ballot agent. This adjustment addresses accessibility concerns by requiring the Commonwealth to bear the majority of the cost, and limiting the impact which upfront costs would otherwise have on applicants.

The bill will allow ballots to be conducted by an applicant. Usually this will be a union. To ensure the ballot is fair and democratic in these situations, the bill will also require the Commission to appoint an authorised independent advisor to oversee the ballot process.

To ensure democratic principles are upheld, challenges to ballot orders and ballots will only be possible in exceptional circumstances, for example, in cases of a substantial contravention, fraud, providing misleading information to the Commission, or an irregularity that affected the outcome of a ballot.

At the completion of the ballot, both the authorised ballot agent and the authorised independent advisor, if any, will provide the Industrial Registrar with a written report about the conduct of the ballot.

These reports will set out details of any complaints received or irregularities identified in the conduct of the ballot. These matters will not impact directly on the validity of the ballot unless they would have had a significant impact on the integrity or outcome of the ballot. However, the Commission will be able to take these reports into account in deciding whether the ballot agent is a fit and proper person to conduct future ballots.

It should be clear to the Parliament and to the Australian community that the Government has addressed the reasonable concerns raised about previous bills.



This bill makes amendments to the income tax law and other laws to give effect to the following measures.

The imputation rules in the Income Tax Assessment Act 1936 will be amended to take account of the reduction of the company tax rate from 34% to 30%. The measures preserve the value of franking credits accumulated prior to the rate change whilst minimising compliance costs for corporate taxpayers. These amendments will apply from 1 July 2001.

As a consequence of the deferral in the Review of Business Taxation life insurance policyholder proposals until 1 July 2002, the commencement date of the proposals to tax friendly societies on investment income received that is attributable to funeral policies, scholarship plans and income bonds sold after 30 November 1999 will also be deferred. Friendly societies will remain exempt from tax on that investment income until 30 June 2002. In addition, the change in methodology for working out the capital component of ordinary life insurance investment policies will also be deferred until 1 July 2002.

This bill further amends the Income Tax Assessment Act 1936 so that neither the intercorporate dividend rebate nor a related deduction are allowed in respect of any unfranked dividends paid to or by a dual resident company.

The Income Tax Assessment Act 1997 will be amended to remove scope for double refunds of excess imputation credits to both a trustee and a beneficiary and a consequential amendment will be made to the Income Tax Assessment Act 1936.

Amendments to the Income Tax Assessment Act 1997 are also required to deny refunds of excess imputation credits to non-complying superannuation funds and non-complying approved deposit funds. It has become apparent that, if their access to excess imputation credits is not prevented, these entities could be used as a vehicle to access tax benefits inappropriately through artificial schemes to produce surplus imputation credits in respect of which they would be entitled to refunds.

The technical amendments are required to the Income Tax Assessment Act 1936 to enable the franking rebate provisions to clarify that registered charities and gift-deductible organisations which are trusts, are eligible for refunds of imputation credits in respect of distributions received indirectly through another trust.

The amendment to the Income Tax Assessment Act 1936 will broaden the class of taxpayers eligible to claim the Senior Australians Tax Offset. The following taxpayers will also be eligible to claim the Senior Australians Tax Offset:

· Veterans who were eligible to receive a pension, allowance or benefit under the Veterans' Entitlements Act 1986 but did not receive one; and

· persons who were eligible to receive an age pension on alternative grounds to the residency test.

The amendment to the Medicare Levy Act 1986 will make a minor technical correction.

This bill further amends the Income Tax Assessment Act 1997 to ensure that taxpayers who received shares in Tower Limited as a consequence of the demutualisation of Tower Corporation (a former New Zealand resident mutual company) in October 1999 are not subject to capital gains tax at the time their membership rights ceased to exist. The amendments also specify the cost base for shares received in Tower Limited as a consequence of giving up those membership rights.

The bill also contains amendments to the gift provisions of the income tax law to give effect to announcements the Government has made over the past several months that gifts of $2 or more to certain organisations are to be tax deductible. These organisations include those engaged in health and education, and those that recognise the contribution our war veterans have made to Australia.

The bill amends the income tax law to recognise a new demutualisation method for non-insurance mutual entities. Members of non-insurance mutual entities that demutualise using the new method will qualify for the concessions currently available to members of such entities that demutualise using one of the existing demutualisation methods.

The bill will amend the Income Tax Assessment Act 1997 to insert a capital gain tax roll-over for a policyholder/member of a mutual insurance company who becomes absolutely entitled to certain shares held on trust as part of a demutualisation. The amendments will apply from 10 December 1999.

Lastly, this bill makes a number of technical corrections to the Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997 and other tax related legislation.

Full details of the measures in this bill are contained in the explanatory memorandum.

I commend this bill.

Debate (on motion by Senator Crossin) adjourned.

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