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Thursday, 28 June 2012
Page: 4869


Senator FARRELL (South AustraliaParliamentary Secretary for Sustainability and Urban Water) (17:43): I thank Senator Cormann and Senator Milne for their contribution to this debate. Schedule 1 to the Tax Laws Amendment (Managed Investment Trust Withholding Tax) Bill 2012 amends the income tax law to increase the managed investment trust final withholding rate from 7.5 per cent to 15 per cent. I think it is worth pointing out that even at 15 per cent the tax is 15 per cent lower than under the former Howard government. The 15 per cent on funds payment made in respect to income years, commences on or after 1 July 2012. Given that is the start date and we are only a few days away from that, we would like to get this legislation through the parliament this evening.

Schedule 1 to the Tax Laws Amendment (Managed Investment Trust Withholding Tax) Bill 2012 makes consequential amendments to the Taxation Administration Act of 1953, with particular effect to the increases in the MIT final withholding rate. The new rate of 15 per cent will ensure that Australia receives a fair return from foreign investments in Australian land and buildings, whilst maintaining competitive rates of tax relative to foreign jurisdictions. The new rate is still competitive with rates applying in other countries and will bring us into line with or better than the United States, Canada, Hong Kong and the United Kingdom. As I said before, it is half the rate that applied under the previous Howard government.

As Senator Milne has indicated in her contribution, the government will introduce subsequent legislation to support investment in the construction of energy efficient buildings. From 1 July 2012, managed investment trusts that only hold newly-constructed, energy-efficient commercial buildings will be eligible for a 10 per cent withholding tax rate. The government welcomes the constructive approach taken by the Greens in passing this important legislation, which stands in contrast to the opposition's position. I commend the bill to the Senate.

The PRESIDENT: The question is that the second reading amendment moved by Senator Cormann be agreed to.