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Thursday, 24 June 2004
Page: 31467

Mr ROSS CAMERON (Parliamentary Secretary to the Treasurer) (10:23 AM) —I move:

That this bill be now read a second time.

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

Firstly, after listening to the concerns of business, the government is implementing, in schedule 1 further refinements to the consolidation regime.

The refinements provide greater flexibility and certainty to the consolidation membership and loss rules. The bill clarifies the consolidation cost setting rules with respect to finance leases, certain types of mining expenditure, and low-value and software development pools. The refinements also reduce compliance costs by alleviating the notice requirements under the inter-entity loss multiplication rules during the consolidation transitional period for entities that are in the same consolidatable group and in other circumstances approved by the Commissioner of Taxation. Generally, these amendments take effect from 1 July 2002, which is the commencement date of the consolidation regime.

Secondly, this bill ensures that copyright collecting societies are not taxed on income they collect on behalf of members.

Broadly, the provisions will ensure that copyright collecting societies that are appropriately structured and administered, are exempt from income tax on certain types of income that they derive and hold pending allocation to recipients. The provisions will also ensure that any amounts of income that are exempt at the society level, are included in the assessable income of recipients once these amounts are distributed to them.

The third measure ensures further implementation of the simplified imputation system, including anti-avoidance rules in relation to exempt entities that are eligible for a refund of imputation credits; and consequential amendments to the income tax laws to replace references to the former imputation system with those of the simplified imputation system and to update terminology of the former imputation system to equivalent provisions of the simplified imputation system.

Schedule 4 to this bill amends the lists of specifically listed deductible gift recipients in the Income Tax Assessment Act 1997. This includes adding certain fire and emergency services bodies as specifically listed deductible gift recipients. Deductible gift recipient status will assist these organisations to attract public support for their activities.

Lastly, this bill will extend an existing transitional rule in the debt equity rules for at-call loans to 30 June 2005. This will give business extra time to assess existing loans and adjust their arrangements if need be.

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

I commend this bill and present the explanatory memorandum.

Debate (on motion by Mr Gavan O'Connor) adjourned.