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Wednesday, 12 September 2007
Page: 108


Senator JOHNSTON (Minister for Justice and Customs) (5:24 PM) —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—

INTERNATIONAL TAX AGREEMENTS AMENDMENT BILL (No. 2) 2007

This Bill will give the force of law to the renegotiated double tax Agreement between Australia and Finland, which was signed on 20 November 2006.  The Bill will insert the text of the Agreement with Finland into the International Tax Agreements Act 1953. This is a prerequisite to the new tax treaty’s entry into force.

The Bill repeals the schedules to the International Tax Agreements Act 1953 that give the force of law to the existing tax treaty with Finland.

The Agreement will broadly update the taxation arrangements between Australia and Finland. 

The Agreement will substantially reduce withholding taxes on certain dividend, interest and royalty payments in line with those provided in our tax treaty arrangements with the United Kingdom and the United States, and more recently with France and Norway.  This will provide long-term benefits for business, reducing the cost for Australian-based business to obtain intellectual property, equity and finance for expansion.

The Agreement will assist trade and investment flows between Australia and Finland, and further demonstrates the Government’s commitment to update Australia’s tax treaty network as recommended by the Review of Business Taxation and the Review of International Tax Arrangements.  The treaty will strengthen our economic relations with Finland. Further, it will provide a positive economic environment for Australia and contribute to a larger and faster-growing Australian economy.

The new Agreement achieves a balance of outcomes that will provide Australia with a competitive tax framework for international trade and investment, while ensuring the Australian revenue base is sustainable and suitably protected.

The Agreement includes rules to prevent tax discrimination against nationals and Australian businesses operating in Finland and vice versa.

The Agreement serves as another step in facilitating a competitive and modern tax treaty network for companies located in Australia.  The Agreement will also satisfy Australia’s most favoured nation obligations under the existing treaty with Finland.

Finally, I note the Agreement will facilitate improved integrity aspects of administering and collecting tax from those with tax obligations in either or both countries.  The Agreement reflects the Government’s decision to incorporate enhanced information exchange provisions which meet modern OECD standards and to provide for reciprocal assistance in collection in future tax treaties where appropriate.

The Government believes that the conclusion of the Agreement will strengthen the integrity of Australia’s tax treaty network through bi-lateral cooperation between countries to help ensure taxpayers pay their fair share of tax.

The Agreement will enter into force after completion of the necessary processes in both countries and will have effect in accordance with its terms.

In accordance with those processes, the treaty was tabled in this place and referred to the Joint Standing Committee on Treaties.  The Committee has recommend that binding action be taken.

The enactment of this Bill, and the satisfaction of the other procedures relating to proposed treaty actions, will complete the processes followed in Australia to bring the treaty into force.

Full details of the amendments are contained in the explanatory memorandum.


BUILDING AND CONSTRUCTION INDUSTRY IMPROVEMENT AMENDMENT (OHS) BILL 2007

This Bill reinforces the Government’s commitment to improving the occupational health and safety (OHS) performance of the building and construction industry.

In 2002-03, when Commissioner Cole reported on the Royal Commission into the building and construction industry, the industry was one of the most dangerous to work in. There were 37 compensated fatalities in the industry, which comprised almost one fifth (18 per cent) of all compensated workplace fatalities for the year. The industry also had the third highest incidence of workplace injuries with more than 12 500 compensated injuries, or 34 injuries per day.

Commissioner Cole concluded that improvements in OHS performance must be brought about through cultural and behavioural change. As a major client and provider of capital to the construction industry, the Australian Government is well positioned to drive such change.

The Government has wholly committed itself to this role through the enactment of the Building and Construction Industry Improvement Act 2005 (the Act) and by establishing the Federal Safety Commissioner. Through the Commissioner’s work, this Government is fostering a culture where work must be performed safely as well as on budget and on time.

Under the Act the Federal Safety Commissioner is tasked with promoting improved OHS in the construction industry and administering the Australian Government Building and Construction OHS Accreditation Scheme (the Scheme).

The Scheme has proven to be a major development in OHS for the construction industry. The Scheme ensures that only head contractors who have effective OHS management policies and systems in place can contract to undertake building work for the Australian Government. This Government does not want to do business with builders who do not take health and safety seriously.

Since the Scheme commenced on 1 March 2006, 64 builders have achieved Scheme accreditation and more than 170 safety audits have been conducted. Additionally, 23 new Government construction projects, worth $1.44 billion, are covered by the Scheme.

In his recommendations Commissioner Cole also noted that the Government has an opportunity to further improve OHS in the industry by utilising its influence as a provider of funding to state and territory governments and private industry. The Government agreed to take full advantage of this opportunity by implementing a second stage of the Scheme in 2007. This Bill will fulfil the Governments commitment to this approach by facilitating the application of the Scheme to builders contracting to undertaking building work on projects where the Government has contributed significant funding.

In keeping with the intent of the Scheme to only apply to builders who actually perform building work, this Bill will enable the exclusion of contractors on construction projects who do not perform building work. This includes contractors who provide support and pre-construction services such as project management and environmental assessments.

The Bill will also clarify the intent of the Scheme that accredited builders remain accredited while undertaking building work covered by the Scheme.

To assist the Federal Safety Commissioner in effectively administering the Scheme the Bill will also simplify the process for engaging Federal Safety Officers, who undertake audits of builders to assess their initial and ongoing eligibility for accreditation.

To further assist the Federal Safety Commissioner to promote health and safety in the construction industry the Bill will allow the Commissioner, and persons working in the Commissioner’s Office, to disclose information under certain circumstances on the OHS performance of accredited contractors to me.

Occupational health and safety is a significant issue for all of us. It affects us, our families and our friends. The construction industry has traditionally been a poor performer in the area of health and safety. This Government has taken the opportunity provided it to change this.

Debate (on motion by Senator Johnston) adjourned.

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