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Wednesday, 24 February 2010
Page: 1079


Senator WONG (Minister for Climate Change and Water) (5:29 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—

Appropriation Bill (No. 3) 2009-2010

I rise to introduce Appropriation Bill (No. 3) 2009-2010.

There are two Additional Estimates Bills this year: Appropriation Bill (No. 3) and Appropriation Bill (No. 4). I shall introduce the latter Bill shortly.

The Additional Estimates Bills seek appropriation authority from Parliament for the additional expenditure of money from the Consolidated Revenue Fund, in order to meet requirements that have arisen since the last Budget.  The total additional appropriation being sought through Additional Estimates Bills 3 and 4 this year is a little over $2 billion.

Turning to Appropriation Bill (No. 3), the total appropriation being sought this year is $1.69 billion. This proposed appropriation arises from changes in the estimates of program expenditure, due to variations in the timing of payments and forecast increases in program take-up, reclassifications and from policy decisions taken by the Government since the last Budget.

I now outline the major appropriations proposed in the Bill.

The Government will provide an additional $510.8 million to the Department of the Environment, Water, Heritage and the Arts to meet commitments under the Solar Homes and Communities Plan.  This program was terminated on 9 June 2009, and replaced by the Solar Credits Scheme. The new program provides assistance to households, small businesses and community groups with the upfront costs of eligible small-scale renewable energy systems installed after 9 June 2009 through the expanded Renewable Energy Target.

In addition, the Government will adjust funding for the National Rainwater and Greywater Initiative, to meet lower-than-expected demand, resulting in a saving $13 million in the current financial year. It will also reduce funding for project contingencies under the Water Smart Australia program, saving a further $10 million in 2009-10.

The Government will also provide the Department of the Environment, Water, Heritage and the Arts with $16.1 million for the Tasmanian Forest Package. In addition, an unspent amount of $20.1 million, resulting from project delays, will be carried forward from last financial year for the Living Murray Initiative.

The Government proposes to bring forward $290 million from 2011-12 for the Department of the Environment, Water, Heritage and the Arts to meet an increase in demand for the Home Insulation Program. This amount is in addition to the $695.8 million proposed in the Appropriation (Water Entitlements and Home Insulation) Bill 2009-2010 introduced into Parliament on 18 November 2009, the funding for which is required by December 2009. The $290 million proposed in this Bill is required less urgently and will meet demand for the program in the months following passage of the Additional Estimates appropriation Bills.

The Department of the Environment, Water, Heritage and the Arts will also be provided with $24.8 million for the Climate Change Action Fund, which is matched by a corresponding reduction in the funding for the Department of Climate Change.

The Government is proposing to provide the Department of Health and Ageing with $45.2 million in response to the H1N1 influenza virus pandemic. The funding seeks to manage this pandemic and to enhance preparedness for any future pandemics by supporting activities such as:

  • the storage, compounding and distribution of antivirals and personal protective equipment;
  • the production, processing and distribution of immunisation consent forms; and
  • the conduct of an immunisation awareness campaign.

In addition, the Department of Health and Ageing will be provided with $12.4 million which was unspent last financial year because of project delays for the Zero Real Interest Loans program. The program provides capital funding to build and expand residential aged care and respite facilities in areas of high need.

The Government will streamline arrangements and introduce efficiencies at Centrelink to deliver substantial savings over the next four years. From 1 July 2010, paper forms received by Centrelink will be scanned to reduce the cost of transferring forms between Centrelink sites and to reduce storage of paper documents. This initiative is expected to deliver net savings of $131.3 million over four years. An amount of $12.4 million is proposed in Bill 3 to prepare for the introduction of the streamlined arrangements.

In addition, the Government will streamline the arrangements for job seekers from 1 July 2010 with the fortnightly income reporting requirements being met through electronic lodgement over the Internet, or by telephone utilising interactive voice recognition software. This measure is expected to deliver net savings of $95.2 million over four years. Appropriation Bill 3 includes $14.5 million for Centrelink to implement the initiative.

The Department of Education, Employment and Workplace Relations will be provided with the following additional amounts:

  • $40 million to meet an increase in demand for assistance from the General Employee Entitlements and Redundancy Scheme due to a rise in bankruptcies and insolvencies. This is a basic payment scheme designed to assist employees who have lost their employment as a result of the insolvency of their employer and are owed certain employee entitlements.
  • $20.3 million will be provided to establish environmental and heritage training and work experience placements, lasting 26 weeks, for young people aged 17 to 24.
  • The Government will provide the Defence Materiel Organisation with $43.4 million for personnel and other operating costs associated with delivering additional activities required to be performed on behalf of the Department of Defence. This increase is matched by a reduction in the Department of Defence’s departmental operating expenses.
  • An additional appropriation is proposed for the Department of Immigration and Citizenship as follows:
  • $63 million will be provided to meet the cost of increased irregular maritime arrivals; and
  • A further $11.2 million is proposed to expand Christmas Island’s accommodation capacity in response to increased irregular maritime arrivals.

These increases are partially offset by a reduction of $19.3 million resulting from lower than expected activity levels in the Department’s Visa and Migration Services.

The Government proposes an additional $19.95 million for the Department of Families, Housing, Community Services and Indigenous Affairs, for payments under the National Rental Affordability Scheme due to a greater than expected number of charities looking to participate in the Scheme. This change is accompanied by a reduction in the estimated administered Refundable Tax Offsets payments and results in an overall budget neutral rebalancing of estimates between the Department and the Australian Tax Office in 2009-10.

The Australian Tax Office will be provided with $11.3 million, which has been carried forward from last financial year, to fund a public awareness campaign concerning the Small Business and General Business Tax Break, the passage of legislation for which was delayed until May 2009.

The appropriations that I have outlined so far are proposed to meet additional funding requirements that have arisen since the last Budget. There is a further category of requirement for additional appropriation, referred to as a ‘reclassification of appropriation’, that are also proposed in Appropriation Bill (No.3).

These amounts need to be re-appropriated to align the purpose of the proposed spending with the correct appropriation type. The additional appropriations are fully offset by savings against the original appropriations and thus do not lead to additional expenditure.

I now outline the material reclassifications proposed in Bill 3:

The Department of Defence will be provided with $639.2 million in Departmental Outputs appropriation to align its appropriations with its work program. This additional amount will be more than fully offset by reductions in its non-operating appropriations, resulting in a net saving to the Budget overall.

The Department of the Environment, Water, Heritage and the Arts will be provided with $118.7 million as an administered expense appropriation for the Sustainable Rural Water Use and Infrastructure program. This amount represents a reclassification of appropriation from the Administered Assets and Liabilities appropriation provided in the last Budget.

The Department of Education, Employment and Workplace Relations will receive $42.6 million for the Support for Child Care Program. This amount, which was originally appropriated in Appropriation Act (No. 2) as a States, ACT, NT and local government item has been identified as a Commonwealth Own Purpose Expense and so has been reclassified.

The remaining amounts that appear in Appropriation Bill (No. 3) relate to estimates variations, minor reclassifications and other minor measures.

I would like to turn now to a new clause that is included in Bill 3. The new clause gives effect to the Government’s decision to reduce the amounts of unspent or uncommitted depreciation and make-good funding that agencies have accumulated since the introduction of accrual appropriations in 1999-2000. This clause will operate separately and in addition to the current appropriation reduction provisions. The clause will apply to both the Departmental Outputs and Administered Expenses appropriations. A similar clause is provided in Appropriation Bill (No. 4). It is intended that the new clauses will only appear in these Additional Estimates Bills and will not be required in future Bills. The proposed new clause is discussed in the Explanatory Memorandum.


Appropriation Bill (No. 4) 2009-2010

Appropriation Bill (No. 4) 2009-2010 provides additional funding to agencies for:

  • expenses in relation to grants to the States under section 96 of the Constitution, and for payments to the Australian Capital Territory, the Northern Territory and local government authorities; and
  • non-operating purposes such as equity injections and the acquisition of administered assets.

The total additional appropriation being sought in Appropriation Bill (No. 4) 2009-2010 is $310.9 million, the more significant amounts of which I now outline.

The Government proposes an additional appropriation of $167 million for the Department of Infrastructure, Transport, Regional Development and Local Government. This includes funding for:

  • the establishment of a Local Government Reform Fund to help councils manage their infrastructure and to plan for their future needs; and
  • funding under the Regional and Local Community Infrastructure Program to support investment in community infrastructure, such as libraries, community centres, sports grounds and environmental infrastructure.

The total of $167 million includes amounts which have been previously provided as follows:

  • $14.9 million has been reclassified from administered expenses in Appropriation Act (No. 1) to make payments direct to local government for the East Kimberley Development Package;
  • $18.3 million has been reclassified from payments which were to be made under the Federal Financial Relations Act 2009 to payments direct to local government for various Nation Building Roads to Recovery projects; and
  • $10 million, which was unspent last financial year due to delays in the negotiation of funding arrangements, is proposed for the Regional and Local Community Infrastructure Program.

These additional appropriations are fully offset by savings against the original appropriations and estimates and thus will not lead to additional expenditure.

A reallocation of appropriation is proposed for the Department of the Environment, Water, Heritage and the Arts for the National Solar Schools program. The Department will receive funding of $19.8 million as a State, ACT, NT and local government item, matched by reductions in Appropriation Act (No. 1) administered expense funding, to facilitate that component of the program which is delivered through the States for non-government schools. In addition, funding of $15.8 million has been brought forward from 2012-13 for the National Solar Schools Program to meet demand in the current financial year for non-government schools.

The Government will provide the Department of Health and Ageing with $26 million capital funding in response to the H1N1 influenza virus pandemic to purchase H1N1 influenza vaccine and fund the associated clinical trials.

An amount of $34.1 million is proposed for the Department of Immigration and Citizenship to expand the accommodation capacity at Christmas Island in response to increased irregular maritime arrivals.

The remaining amounts that appear in Bill 4 relate to estimates variations, minor reclassifications and other minor measures.

I would like to turn now to the general drawing right limits for the Nation-building Funds, which specify the maximum limit on payments from the Funds in a financial year. The Education Investment Fund and Health and Hospitals Fund general drawing rights limits proposed in this Bill will replace the limits declared in Appropriation Act (No. 2) 2009-2010, reflecting recently announced funding for the Giant Magellan Telescope and minor adjustments in the timing of payments from the Funds.

Bill 4 also includes a new clause that provides that where a GST qualifying amount arises for payments made in reliance on a general drawing right limit, the limit will increase by the amount of the GST qualifying amount. This makes clear that the general drawing rights limits are the sum of the amounts stated plus any GST qualifying amounts. This clause also covers payments made in 2008-09.

Appropriation Bill 4 also includes a new clause to give effect to the Government’s decision to reduce the amounts of unspent or uncommitted depreciation and make-good funding that the Parliamentary Departments have accumulated since the introduction of accrual appropriations in 1999-2000. This clause will operate separately and in addition to the current appropriation reduction provisions that are contained within the Parliamentary Departments appropriation Acts.

It has been necessary to include this clause in Bill 4 because there is no Additional Estimates appropriation Bill proposed for the Parliamentary Departments this financial year. The clause will apply to the Departmental Outputs and Administered Expenses appropriations for the three Parliamentary Departments. It is intended that the new clause will only appear in Bill 4 and will not be required in future Bills. The proposed new clause is discussed in the Explanatory Memorandum.


Crimes Legislation Amendment (Torture Prohibition and Death Penalty Abolition) Bill 2009

I am pleased to introduce the Crimes Legislation Amendment (Torture Prohibition and Death Penalty Abolition) Bill 2009.

The Bill contains two key measures.

First, it enacts a specific Commonwealth torture offence in the Commonwealth Criminal Code, to operate concurrently with existing offences in State and Territory criminal laws.

Second, it amends the Commonwealth Death Penalty Abolition Act 1973 to extend the application of the current prohibition on the death penalty to State laws, to ensure the death penalty cannot be introduced anywhere in Australia.

The overarching purpose behind these amendments is, in the spirit of engagement with international human rights mechanisms, to ensure that Australia complies fully with its international obligations to combat torture and to demonstrate our commitment to the worldwide abolitionist movement.

Prohibition of torture

Since 1989, Australia has been a party to the United Nations Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment. Among other obligations, the Convention requires Australia to ensure that all acts of torture are offences under domestic criminal law. Torture is defined in the Convention as any act by which severe pain or suffering is intentionally inflicted upon a person by a public official for certain specified purposes—such as obtaining information or a confession from a person.

In previous periodic reports to the UN Committee Against Torture, Australia has stated that it meets its obligations on the basis that acts falling within the Convention’s definition of torture are offences under State and Territory criminal laws. These acts include the infliction of bodily harm, murder, manslaughter, assault and other offences against the person.

The Crimes (Torture) Act 1988 (Cth) currently criminalises acts of torture committed outside Australia, only when committed by Australian citizens or other persons who are subsequently present in Australia. Acts of torture that are committed anywhere in the world during the course of an armed conflict or as a crime against humanity are currently criminalised under the Criminal Code Act 1995 (Cth).

In recent years, the UN Committee Against Torture has been critical of nations that have not enacted torture as a specific criminal offence, and has called on nations to do so. In its Concluding Observations on Australia, issued in May 2008, the Committee recommended that Australia enact a specific offence of torture at the federal level.

Mindful of the Committee’s recommendation, and determined to demonstrate the Government’s condemnation of torture in all circumstances, the Government is enacting a new offence of torture in the Criminal Code, which will criminalise acts of torture committed both within and outside Australia.

As the new offence will result in the redundancy of the Crimes (Torture) Act, that Act will be repealed. Giving the offence extraterritorial application is intended to reflect a key aim of the Convention, which is to end impunity for torture globally. The new offence is intended to fulfil more clearly Australia’s obligations under the Convention Against Torture.

The offence is intended to operate concurrently with existing State and Territory offences. The Bill makes it clear that the enactment of the new offence is not intended to exclude or limit the concurrent operation of any other law of the Commonwealth or any law of a State or Territory.

Abolition of the Death Penalty

Australia has a long-standing policy of opposition to the death penalty. Australia is a party to both the International Covenant on Civil and Political Rights and the Second Optional Protocol to the Covenant Aiming at the Abolition of the Death Penalty.

The ICCPR only permits the death penalty for the ‘most serious crimes’. The Second Optional Protocol goes further and requires Australia to take all necessary measures to abolish the death penalty within its jurisdiction and to ensure that no one within its jurisdiction is subject to the death penalty.

The death penalty has been formally abolished in all jurisdictions in Australia.

It was first abolished for Commonwealth and Territory offences in 1973, by the Commonwealth Death Penalty Abolition Act. Each State has independently and separately abolished the death penalty, and there are no proposals by any State Government to reinstate the death penalty.

The purpose of the legislation is to extend the application of the current prohibition on the death penalty to State laws. This will ensure that the death penalty cannot be reintroduced anywhere in Australia into the future.

The amendments emphasise Australia’s commitment to our obligations under the Second Optional Protocol to the International Covenant on Civil and Political Rights, and ensure that Australia continues to comply with those obligations.

Such a comprehensive rejection of capital punishment will also demonstrate Australia’s commitment to the worldwide abolitionist movement, and complement Australia’s international lobbying efforts against the death penalty.

In summary, this Bill contains important measures which again demonstrate this Government’s ongoing commitment to better recognise Australia’s international human rights obligations.

I therefore commend the Bill.


Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (2009 Measures) Bill 2009

This Bill will amend various Acts in the Families, Housing, Community Services and Indigenous Affairs portfolio to provide for several non-Budget measures.

The first group of amendments is to schedule three further parcels of land in the Northern Territory so they can be granted as Aboriginal Land. These three parcels of land are Alice Valley Extension (East), Loves Creek and Patta (near Tennant Creek).

The Loves Creek parcel of land is subject to a partially-heard land claim. Scheduling this land under the Aboriginal Land Rights (Northern Territory) Act 1976 follows agreement between the Central Land Council and the Northern Territory Government. The scheduling will resolve the claim and allow the land to be granted to the appropriate Aboriginal Land Trust.

Patta (near Tennant Creek) is also the subject of an agreement between the Central Land Council and the Northern Territory Government. Granting this land will form part of an agreement for settling broader native title claims.

The Alice Valley Extension (East) parcel of land will be leased by the Land Trust to the Northern Territory as an extension of the West MacDonnell National Park.

The bill makes some amendments to the income management provisions in the social security law to improve their operation in minor respects.

Firstly, the bill will allow people in the Cape York welfare reform areas who are receiving age pension or carer payment to have their payments income managed. As with other payments that are income managed for people in Cape York, the new provisions will rely on the local Family Responsibilities Commission issuing a notice and relevant conditions being met. This change has been requested by the Families Responsibilities Commission.

Secondly, amendments are made relating to the use of residual funds in an income management account when a person returns to income management. The amendments will ensure that any residual amounts being dispersed are retained in the person’s income management account at the time when they return to income management.

Thirdly, changes are being made to how residual amounts left in an income management account are dealt with when a customer dies.

Depending on how much is left in the account, these residual amounts may currently be paid to the deceased customer’s legal personal representative, or to a person carrying out certain activities in relation to the estate or affairs of the deceased person. However, if the customer has no legal personal representative, or if there is more than one person carrying out the relevant activities, it can be hard to determine who to pay the residual amounts to. These amendments will provide further options to disburse the residual amounts in these cases.

The bill makes amendments to improve the operation of the Social Security Appeals Tribunal across its social security, family assistance and child support jurisdictions.

For example, the bill makes changes to titles for Tribunal members, such as renaming the Executive Director to Principal Member. The bill removes the requirement for the Principal Member to chair panels on which he or she sits by enabling the Principal Member to determine who will be the presiding member. The bill allows the SSAT to convene a pre-hearing conference for social security and family assistance law appeals. If parties reach agreement at the pre-hearing conference, the SSAT is empowered to make a decision in accordance with the agreement.

In the first of two measures about the income support means test, an amendment will clarify that a gift that has been returned does not have to be assessed as a deprived asset under the social security disposal of assets provisions. This removes a potentially harsh outcome under the current provisions for a person who disposes of an asset in certain circumstances, has it counted as an asset on that basis, and then has it counted again as a returned asset.

Further amendments clarify that, where a customer is the beneficiary of a discretionary trust, and the trustee has a duty to maintain the customer, then the trust should be assessed as being a controlled private trust in respect of that beneficiary. The amendments also make it clear that, when the controllers of a trust are being determined, it should not be relevant that there are other future beneficiaries of the trust, when those parties are not currently receiving any benefits from the trust. These amendments secure longstanding policy in light of a recent Full Federal Court case.

The remaining amendments in the bill provide a requirement for a claimant to notify if a child who attracted baby bonus leaves the claimant’s care within 26 weeks of birth or coming into their care, and make further minor and technical amendments.


Health Insurance Amendment (Diagnostic Imaging Accreditation) Bill 2009

The Health Insurance Amendment (Diagnostic Imaging Accreditation) Bill 2009 will broaden the scope of the Diagnostic Imaging Accreditation Scheme (the Scheme).

When the Stage 1 Scheme was introduced in 2008, the accreditation arrangements only covered practices providing radiology services. The Scheme did not cover non-radiology services such as cardiac ultrasound and angiography, obstetric and gynaecological ultrasound, or nuclear medicine imaging services, which account for around 16% of the total number of Medicare funded diagnostic imaging services performed annually.

From 1 July 2010, with the commencement of the Stage 2 Scheme, the scope of the Scheme will be broadened to cover all diagnostic imaging services (radiology and non-radiology services) in the Health Insurance (Diagnostic Imaging Services Table) Regulations 2009. Any practices that are intending to render diagnostic imaging services for the purpose of Medicare benefits will need to be accredited under the Stage 2 Scheme.

Accreditation is a well recognised tool for promoting, reviewing and improving systems of healthcare and for fostering continuous quality improvement. Patients who attend an accredited diagnostic imaging practice can be confident that defined standards of care guide the delivery of those services.

The impetus for broadening the scope of the Stage 2 Scheme and providing arrangements to transition non-radiology practices into the Stage 2 Scheme is not a reflection on the quality of services as they are currently being provided, but a focus on providing a consistent standard of diagnostic imaging services regardless of where or how they are provided.

Diagnostic imaging services are provided, and are being increasingly provided, by a diverse range of practitioner groups including specialist radiologists, vascular surgeons, cardiologists, general practitioners, obstetricians and gynaecologists, nuclear medicine physicians and sports physicians. These services are provided in a range of practice settings, such as hospitals, single practitioner practices and multi-site corporate practices. They take place in a variety of clinical contexts such as in conjunction with surgical procedures or as part of routine or emergency investigations to exclude or confirm injury or disease. Given this diversity, it is important to ensure that all the elements involved in the delivery of a diagnostic imaging service are working together effectively.

Through the implementation of the Stage 2 Scheme, the Government and the community can be assured that the 19.5 million or so diagnostic imaging services that are supported by Medicare annually are being provided by organisations that are able to meet specified standards, and that the over $2.2 billion taxpayer funded investment in those services is being used effectively. Broadening the scope of the accreditation scheme to cover all diagnostic imaging services will ensure consistency and uniformity across the whole diagnostic imaging sector.

The purpose of this Bill is to amend the Health Insurance Amendment (Diagnostic Imaging Accreditation) Act 2007 to provide transitional arrangements so that practices delivering non-radiology services, or a combination of non-radiology and radiology services that are not accredited under the Scheme, will be able to enter into the next stage of the Scheme by registering for ‘deemed accreditation’ from 1 April 2010 until 30 June 2010 with an approved accreditor.

Practices in operation before 1 July 2010 providing both non-radiology services and radiology services and who have been accredited for radiology services under the Stage 1 Scheme, will not be required to register for ‘deemed accreditation’ as they will be automatically accredited until 30 June 2012.

Registering for ‘deemed accreditation’ will require approximately 1,400 practices that are currently providing non-radiology services, or a combination of non-radiology and radiology services not accredited under the Scheme, to lodge a form with an approved accreditor. This will be a relatively simple process. The proprietor or responsible person will need to complete a form nominating the site to which ‘deemed accreditation’ will apply by specifying the Location Specific Practice Number and the name and contact details of the proprietor.

Once the approved accreditor receives the registration form with an application fee (if any) by 30 June 2010, the practice will be deemed to be accredited for the purpose of the Stage 2 Scheme and will have 12 months to obtain accreditation before 1 July 2011.

Diagnostic imaging services are a vital tool in the detection, measurement, treatment and management of clinical conditions. Patients should be confident that the standard of diagnostic imaging services is regularly reviewed. It is not unreasonable for them to expect a standard level of service regardless of how and where a Medicare eligible diagnostic imaging service is provided.

The Department of Health and Ageing has consulted comprehensively with members of the diagnostic imaging profession and industry. Feedback from these organisations suggests that the proposal to include non radiology practices in the Stage 2 Scheme from 1 July 2010 is supported.

The Department has also written to, and met with, members of the professional bodies representing the providers of non-radiology services. These groups include the Royal Australian and New Zealand College of Obstetricians and Gynaecologists; Cardiac Society of Australia and New Zealand; and the Australian and New Zealand Association of Physicians in Nuclear Medicine.

The Department released an information paper to around 30 professional and industry organisations, representing providers of both radiology and non radiology services, in February 2009. This paper outlined the proposals for transitioning providers of non-radiology services into the Stage 2 Scheme by 1 July 2010.

The arrangements for practices providing non-radiology services are intended to enable their incremental participation and keep the burden of compliance to a minimum.

The new entrants to the Stage 2 Scheme will be introduced to accreditation in much the same way as practices providing radiology services were introduced to accreditation when the Stage 1 Scheme commenced on 1 July 2008. The Stage 1 Scheme arrangements for practices providing radiology services have been well received with around 2,700 practices currently participating. The transitional arrangements in this Bill for providers of non radiology services will replicate those successful arrangements for the Stage 1 Scheme and build on the already established accreditation framework.

Introducing the accreditation requirements incrementally will ensure that practices providing non-radiology services will have ample time to prepare for and comply with the accreditation requirements, and that access to Medicare benefits will be less likely to be interrupted from 1 July 2010 when the Stage 2 Scheme commences.

Accreditation provides a mechanism by which the Government can be assured that services funded under Medicare are being provided only by organisations that are performing against an endorsed set of standards. Furthermore, patients expect and should be confident that their healthcare is provided within a framework for continuous improvement, where safety and quality is paramount.


Tax Laws Amendment (2009 GST Administration Measures) Bill 2009

The amendments in this Bill implement a number of recommendations made by the Board of Taxation in its recent review of GST administration. The focus of the measures is to reduce GST administration costs and to streamline and remove anomalies in the GST administration framework.

Schedule 1 amends the A New Tax System (Goods and Services Tax) Act 1999, the Fuel Tax Act 2006 and the Taxation Administration Act 1953, to provide that input tax credits and fuel tax credits must be claimed within a four year period.

In contrast to other indirect tax liabilities and entitlements no effective limitation period currently applies to these credits. The current position is also not consistent with the basic policy underlying the tax law, that taxpayers should generally have certainty about their tax position within a fixed period.

The amendments will result in entitlements to input tax credits ceasing after four years. However, they provide exceptions to the four year restriction so that where GST may be borne after four years, taxpayers can potentially also claim associated input tax credits.

The amendments apply to claims for input tax credits made after 7.30 pm Australian Eastern Standard Time on 12 May 2009. This reflects that the amendments implement an integrity measure designed to provide symmetry between the period that taxpayers have a liability for GST on transactions and the period that credits can be claimed. The amendments relating to fuel tax credits will apply from 1 July 2010. This reflects that the Fuel Tax Act 2006 came into operation on 1 July 2006 and therefore the four year restriction can have no application to fuel tax credits until 1 July 2010.

Schedule 2 amends the A New Tax System (Goods and Services Tax) Act 1999 and the A New Tax System (Wine Equalisation Tax) Act 1999 to extend the tourist refund scheme to allow residents of Australian External Territories (such as Norfolk, Cocos (Keeling) and Christmas Islands) to claim refunds of GST, or GST and wine equalisation tax for goods separately exported to the External Territories. The current rules for goods taken as accompanied baggage will continue to apply.

The amendments made by this Schedule apply in relation to goods acquired, and wine purchased, on or after 1 July 2010.

Schedule 3 amends the A New Tax System (Goods and Services Tax) Act 1999 so that intermediaries that facilitate transactions but are not common law agents will be able to use the simplified accounting provisions in the GST Act. These procedures include the ability to issue tax invoices and adjustment notes in their own names.

The amendments will extend these arrangements to other intermediaries, such as billing agents and paying agents. This will lower the compliance costs of intermediaries, principals and third parties. The amendments apply from 1 July 2010.

Schedule 4 amends the A New Tax System (Goods and Services Tax) Act 1999 to clarify how the GST law applies to gambling operators making GST-free supplies, including where the operators accept wagers from entities outside Australia.

The amendments confirm that if a wager is GST-free, then the prize money liable to be paid out on that wager will not result in a reduction in the GST payable. The Commissioner of Taxation administers the GST law in this way and the amendment will remove any uncertainty in the current operation of the law. The amendments apply from the first quarterly tax period on or after Royal Assent.

Schedule 5 amends the A New Tax System (Goods and Services Tax) Act 1999,    the A New Tax System (Luxury Car Tax) Act 1999 and the Fuel Tax Act 2006 to specify that overpaid refunds are due and payable from the date of overpayment.

These amendments take effect from the start of the first quarterly tax period after Royal Assent. Currently, there is inconsistent treatment between those taxpayers who incorrectly determine their liability to pay GST or other indirect taxes, and taxpayers who incorrectly determine their entitlement to a refund.

Schedule 6 amends the A New Tax System (Goods and Services Tax) Act 1999 to address anomalous outcomes that may arise as a result of the interaction between various GST provisions in relation to supplies between associates for no consideration. In particular, the current provisions may apply to treat an otherwise input taxed or GST free supply to an associate, if it had been made for consideration, as a taxable supply where it is made for no consideration. These amendments take effect from the date of Royal Assent.

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


Textile, Clothing and Footwear Strategic Investment Program Amendment (Building Innovative Capability) Bill 2009

The Bill amends the Textile, Clothing and Footwear Strategic Investment Program Scheme Act 1999 to provide legislative authority for the new Clothing and Household Textile (Building Innovative Capability) Scheme.

The scheme is part of the textile, clothing and footwear innovation package announced by the Government as part of the 2009-10 Budget. This package demonstrates our determination to secure the long-term viability of the TCF industries in Australia.

The Clothing and Household Textile (Building Innovative Capability) Scheme will replace the TCF Post-2005 (SIP) Scheme for the 2010-2011 to 2014-2015 income years.

The legislative framework established by the Bill is modelled on the one underpinning the TCF Post-2005 (SIP) Scheme. This will ensure that the transition between the old scheme and the new one is as seamless as possible, and so minimise participants’ administrative and compliance costs.

The new scheme will provide grants to clothing and household textile designers and manufacturers in Australia who invest in innovation.

The Australian industry is making the transition from a tariff of 17.5 per cent on clothing and certain household textile products to the general manufacturing tariff of 5 per cent, which will apply from 2015.

In order to adjust successfully, it will have to become more competitive. It will have to focus on high-technology, high-value products.

This will only happen if manufacturers and designers increase their capacity to develop and apply new ideas. That is why the Government is focusing specific support on innovation.

The Bill provides a total of $112.5 million for innovation grants over the five-year period, which is $5 million a year more than would have been available under the TCF Post-2005 (SIP) Scheme.

As is the case under the existing scheme, grants under the Clothing and Household Textile (Building Innovative Capability) Scheme will be paid annually and in arrears, and will be subject to robust compliance monitoring.

The Bill follows an extensive consultation process that started last year when the Government commissioned Professor Roy Green to review Australia’s textile, clothing and footwear industries.

I commend this Bill to the Senate.

Ordered that Appropriation Bill (No. 3) 2009-2010 and Appropriation Bill (No. 4) 2009-2010 be listed on the Notice Paper as one order of the day, and the remaining bills be listed as separate orders of the day.

Debate (on motion by Senator Wong) adjourned.