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
Thursday, 17 October 2002
Page: 5356


Senator IAN CAMPBELL (Parliamentary Secretary to the Treasurer) (9:49 AM) —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—

ABORIGINAL LAND RIGHTS (NORTHERN TERRITORY) AMENDMENT BILL 2002

This bill reflects the continuing commitment of this Government to securing legitimate title to traditional lands on behalf of the Aboriginal people of the Northern Territory.

The Aboriginal Land Rights (Northern Territory) Act 1976 (which I will refer to as the Land Rights Act) provides a mechanism whereby traditional Aboriginal land in the Northern Territory, referred to in Schedule 1 of that Act, may be granted to Aboriginal Land Trusts to hold title on behalf of Aboriginal people with the agreement of this Parliament. Since the Land Rights Act came into operation in 1977 a total of 64 separate parcels of land have been scheduled under the Act. This amendment will bring the total to 69.

The effect of this bill would first of all be to bring within Schedule 1 of the Land Rights Act four areas of land that were the subject of the Upper Daly (Repeat) Land Claim. The land, situated about 250 kilometres to the south-west of Darwin, not far from the township of Pine Creek was the subject of an agreement between the Northern Territory Government, the Northern Land Council and the claimants. The agreement was entered into on 15 November 1999 and finalised in February 2002 after discussions relating to native title, the granting of other titles to the Northern Territory government and the making of a lease-back agreement in respect of the Umbrawarra Gorge Nature Park Reserve. The area to be scheduled comprises nearly 110,000 hectares.

The bill will also be to bring within Schedule 1 of the Land Rights Act a single block of land, situated some 40 kilometres to the north of Alice Springs, near the Stuart Highway. This scheduling proposal arises from the Government's decision to provide funding to enable the construction of one of the greatest infrastructure projects in Australian history to proceed, being the Darwin to Alice Springs railway.

Title to this block of land will be granted to the Harry Creek East community. The community's current land is situated on the old North-South Stock Route and has been rendered unfit for community purposes by its proximity to the Darwin-Alice Springs Railway corridor. Hence the former Government of the Northern Territory agreed to grant the community another parcel of land, located only a few kilometres to the south-east of their current land.

With construction of the Darwin to Alice Springs Railway having now commenced in the area concerned, the Central Land Council, which has jurisdiction over the area, requested that this land (some 450 hectares of vacant Northern Territory Crown land) be granted to the Arnapipe Aboriginal Land Trust, on behalf of the members of the Harry Creek East community. The Northern Territory government has agreed to this scheduling proposal.

As a result of the scheduling of these parcels of land, the Aboriginal people concerned will be able to have the full rights of enjoyment of their traditional lands in fee simple, in other words, as freehold title.

This bill is further evidence of this Government's commitment to land rights and its acknowledgment of the cultural and spiritual importance of land to indigenous Australians. However, while supporting the return of traditional land to its Aboriginal owners, the Government considers that the Land Rights Act is in urgent need of repair because it has not assisted, as it should have, in improving the social and economic position of Aboriginal land owners. The provisions relating to exploration and mining on Aboriginal land are a case in point. There has only been one new mine on Aboriginal land in 25 years. There have been over 1000 applications to explore on Aboriginal land but more than half of those applications remain outstanding.

The Government believes that many traditional owners are interested in the development of their lands but the cumbersome provisions in the Land Rights Act are preventing that occurring. With no circuit breaker in the Act, there are endless negotiations.

The Land Rights Act maintains paternalistic aspects, particularly in relation to Aboriginal people needing to go through a distant land council bureaucracy to manage their own land. Regionalisation of decision making in relation to the Northern and Central Land Councils, and even establishing new Land Councils where people want it, would assist in quicker land use decisions and greater local control.

The Land Rights Act is over 25 years old and has not been substantively amended since 1987. There are continuing calls for changes to the Act, particularly from the Land Councils, ATSIC and Aboriginal communities across the Northern Territory. The Government is currently waiting for the views of the Northern Territory Government and the Central and Northern Land Councils on a paper canvassing options for reform, which the government circulated to interested parties earlier this year. I am hopeful that I will receive these views in the near future so that reform of the Land Rights Act can be progressed.

As I have said amendments to the Act are long overdue. However, this bill demonstrates that the government is prepared to continue to work with the existing legislation. This is an act of good faith and I ask the other stakeholders and particularly the two major Land Councils and the Northern Territory government to join this government in good faith to reform the Act.

I ask the Opposition to give the matter of amendments to the Land Rights Act priority and to support changes, which will contribute to improving the lives of traditional owners.

There are no financial implications arising from this bill.

I commend the bill to the Senate.

—————

EXCISE LAWS AMENDMENT BILL (No 1) 2002

The Excise Laws Amendment Bill (No 1) 2002 contains amendments to the Excise Act 1901, as well as consequential amendments to the Spirits Act 1906 and the Distillation Act 1901.

The proposed alterations contained in the bill were announced in the Budget and will take effect retrospectively from 7.30pm on 14 May 2002, by legal time in the Australian Capital Territory.

This bill amends the Excise Act 1901 to provide that excise duty on excisable alcoholic beverages is payable on the higher of the labelled alcohol content or the actual alcohol content.

Currently, excise duty is imposed on the actual alcohol content, not the labelled content, of excisable alcoholic beverages.

The Australian New Zealand Food Standards Code allows for a discrepancy between labelled strength and actual strength for alcoholic beverages consumed in Australia. This bill arises from the Government's concern that certain manufacturers were gaining a competitive advantage by deliberately labelling their products at a higher alcohol content than the actual alcohol content while paying excise duty on the actual content.

Amendments to the Excise Act 1901 will also allow the CEO (Commissioner of Taxation) to determine, by instrument in writing, rules for working out the percentage by volume of alcohol in the beverage. These rules will be able to take into account that in some classes of alcoholic beverage, there may be natural variations in the alcoholic strength of batches of product, which are beyond the control of the manufacturer.

Amendments to the Spirits Act 1906 and the Distillation Act 1901 are consequential to changes to the Excise Act 1901. The amendments remove a previous reference to how the volume of alcohol should be physically measured and substitutes references to the new sections in the Excise Act 1901. The new references provide that excise duty on excisable alcoholic beverages is payable on the higher of the labelled alcohol content or the actual alcohol content, or ascertained in accordance with the rules (if any) for working out the percentage by volume of alcohol in the beverage. These rules may be determined by the CEO, by instrument in writing.

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

I commend the bill.

—————

EXCISE TARIFF AMENDMENT BILL (No 2) 2002

Excise Tariff Amendment Bill (No 2) 2002 contains amendments to the Excise Tariff Act 1921 that are consequential to the amendments to the Excise Act 1901 contained in Excise Laws Amendment Bill (No 1) 2002.

The amendments remove a previous reference to how the volume of alcohol should be physically measured and substitutes references to the new sections in the Excise Act 1901. The new references provide that excise duty on excisable alcoholic beverages is payable on the higher of the labelled alcohol content or the actual alcohol content, or ascertained in accordance with the rules (if any) for working out the percentage by volume of alcohol in the beverage. These rules may be determined by the CEO (Commissioner of Taxation), by instrument in writing.

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

I commend the bill.

—————

NEW BUSINESS TAX SYSTEM (CONSOLIDATION AND OTHER MEASURES) BILL (No. 1) 2002

This bill reflects the ongoing implementation of the Government's initiatives to the reform of business taxation by amending the income tax law and other laws to give effect to the following measures.

Consolidation Regime

The Consolidation measure is an important business tax reform initiative that allows wholly- owned corporate groups to be treated as single entities for income tax purposes. The Consolidation regime will promote business efficiency, improve the integrity of the Australian tax system and reduce ongoing income tax compliance costs for those wholly-owned groups that choose to consolidate.

The majority of the rules for the Consolidation regime were contained in two earlier tranches of legislation. The first, contained in the New Business Tax System (Consolidation) Act (No. 1) 2002, received Royal Assent on 22 August 2002. The second, contained in the New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Bill 2002 was introduced on 27 June 2002. I will refer to these as the May Act and the June Bill, respectively.

The measures contained in this bill deal with outstanding matters necessary for the implementation of the Consolidation regime, which commences on 1 July 2002. For most corporate groups the measures contained in this bill will complete the legislative package required for them to enter the consolidation regime. Further legislation scheduled to be introduced later this year relates to remaining discrete and specialist areas of the consolidation regime such as the special rules for the life insurance industry.

The Consolidation cost setting rules align the cost of membership interests in an entity joining a consolidated group with the cost of the net assets of that entity. This then allows assets to be transferred within the consolidated group without income tax consequences, and for the group to be treated as a single entity for income tax purposes.

This bill adds to the cost setting rules contained in the May Act and the June Bill by introducing the cost setting rules for the further scenarios where one consolidated group joins another consolidated group and where multiple related entities simultaneously join an existing consolidated group.

The bill also contains modifications to the cost setting rules that remove unintended tax benefits to groups during transition to consolidation as foreshadowed by the Government on introduction of the June Bill. It also contains measures that ensure the cost setting rules in the May Act and June Bill apply appropriately to trusts within consolidated groups and Multiple Entry Consolidated (MEC) groups.

MEC groups are consolidated groups that, instead of being headed by a single resident head company, are headed by a non-resident company. Although the Consolidation regime will apply to MEC groups in the same way as other consolidated groups, this bill contains a number of measures that recognise the special structure of a MEC group.

The bill provides that, in certain circumstances, the head company of a consolidated or MEC group may be replaced without the group's overall tax position being affected. This amendment supports the regime's underlying policy rationale that an election to consolidate is irrevocable.

The Consolidation regime, by ignoring intra-group transactions, structurally removes the need for grouping rules in the current income tax law.. The bill contains amendments to remove the grouping rules for foreign tax credits, thin capitalisation, the inter-corporate dividend rebate and capital gains and losses. Foreign bank branches will be able to continue to group with related companies as they are not able to become members of a consolidated group.

The bill also contains additional rules and amendments of a consequential or technical nature.

Other measures

Simplified Imputation System

This bill will also make a number of amendments to the new Simplified Imputation System that commenced on 1 July 2002. As such, the amendments will generally apply to dividends paid on or after 1 July 2002.

The bill will amend the Income Tax Assessment Act 1997 to extend exemptions from the benchmark rule for public listed companies. The benchmark rule requires that all dividends paid by a company in the same period be franked to the same extent. These changes will recognise additional situations where dividend streaming is not possible

This Bill amends the Income Tax Assessment Act 1997 to replicate provisions in former Part IIIAA of the Income Tax Assessment Act 1936 relating to distributions on non-share equity interests that are still relevant to the new regime.

The bill will also amend the Income Tax Assessment Act 1936 to remove the inter-corporate dividend rebate for franked dividends paid after 30 June 2002. The rebate has been replaced by the imputation tax offset.

Finally, the bill amends the Income Tax (Transitional Provisions) Act 1997 to provide transitional rules for the new simplified imputation system in relation to early and late balancing companies .

I commend this bill.

—————

NEW BUSINESS TAX SYSTEM (FRANKING DEFICIT TAX) AMENDMENT BILL 2002

The New Business Tax System (Franking Deficit Tax) Amendment Bill 2002 makes consequential amendments to the New Business Tax System (Franking Deficit Tax) Act 2002 that are required following the commencement of the new simplified imputation system on 1 July 2002. These amendments facilitate the transitional determination of franking deficit tax liability for late balancing companies.

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

I commend this bill.

—————

INSPECTOR-GENERAL OF TAXATION BILL 2002

This bill will establish an independent statutory office of Inspector-General of Taxation. The role of the Inspector-General will be to review tax administration systems and advise the Government on improving tax administration for the benefit of Australian taxpayers.

Establishing the Inspector-General will fulfil the Government's commitment in the 2001 economic statement, Securing Australia's Prosperity, to strengthen the advice given to government on tax administration and to promote the advocacy of taxpayer concerns.

The bill provides for the appointment of an Inspector-General of Taxation by the Governor-General for a fixed term of up to five years. The terms of appointment and strict prerequisites for dismissal will ensure that the Inspector-General enjoys a high degree of independence.

The Inspector-General will be able to conduct reviews of tax administration and invite submissions from the public on a matter that is under review. The Inspector-General may initiate a review on his or her own initiative and the Treasury Ministers will be able to direct the Inspector-General to conduct a review.

The bill provides for the Inspector-General to have strong powers to compel production of documents by tax officials and to take evidence from tax officials where this proves necessary. This will ensure that systemic tax administration issues can be rigorously pursued and resolved.

However, the bill will not compromise the absolute independence of the Commissioner of Taxation in the administration of the tax laws. The Inspector-General will not be able to direct the Commissioner other than to require the disclosure of information for a review.

The bill will not affect the powers or functions of other taxation review agencies, including the Ombudsman. The Inspector-General is required to consult with the Ombudsman and the Auditor-General at least once a year. The consultation process is intended to avoid duplication of effort in reviews of tax administration but will not compromise the Inspector-General's discretion to determine his or her work program.

This bill will not impose any additional obligations on taxpayers nor increase their compliance costs. The compulsive investigative powers of the Inspector-General will not extend to taxpayers, since the Inspector-General will be reviewing systemic tax administration issues and not the tax affairs of individuals or businesses. The bill prevents taxpayers from being identified in reports by the Inspector-General.

Finally, I would like to acknowledge the advice and recommendations the Government received from the Board of Taxation. I would also like to thank those who participated in the public consultation process convened by the Board of Taxation—taxpayer representative groups, the tax advising professions, businesses and individuals. The Government has taken account of community views in the development of the bill and the bill has been heavily influenced by the Board's recommendations. The bill is, in my view, a better and more robust proposal as a result of the significant input by Board members and the people with whom the Board consulted.

Ordered that further consideration of the second reading of these bills be adjourned to the first day of the next period of sittings, in accordance with standing order 111.

Ordered that the Excise Laws Amendment Bill (No. 1) 2002 and the Excise Tariff Amendment Bill (No. 2) 2002, and the New Business Tax System (Consolidation and Other Measures) Bill (No. 1) 2002 and the New Business Tax System (Franking Deficit Tax) Amendment Bill 2002 be listed on the Notice Paper as two orders of the day, and the remaining bills be listed as separate orders of the day.