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Wednesday, 11 August 2004
Page: 2117

Mr BROUGH (Minister for Revenue and Assistant Treasurer) (5:50 PM) —I thank the member for Mitchell and the assistant shadow Treasurer and shadow minister for revenue, the two speakers who have addressed this bill this evening, for their comments. The Tax Laws Amendment (2004 Measures No. 4) Bill 2004 gives effect to several taxation measures. Firstly, after listening to the concerns of business, the government is giving taxpayers greater flexibility and certainty as they move into this new consolidation regime. The bill clarifies the consolidation cost-setting rules with respect to financial leases, certain types of mining expenditure and low-value and software development pools. The changes also reduce compliance costs by alleviating the notice requirements under the inter-entity loss multiplication rules. As the new consolidation regime has changed the taxation landscape for many corporate groups, the government has continued its active consultation with business on its implementation. This bill further demonstrates the government's commitment to this process.

Secondly, this bill ensures that copyright-collecting societies are not taxed on income they collect on behalf of members. 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 the final 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 the recipients once these amounts are distributed to them.

The third measure implements a further component of the simplified imputation system, including anti-avoidance rules in relation to exempt entities that are eligible for a refund of imputation credits. The bill also makes a number of consequential amendments to the income tax laws to replace references to the former imputation system and to update terminology of the former imputation system.

The bill also specifically lists a number of organisations as deductible gift recipients, some of which have been alluded to here today, particularly by the member for Mitchell. 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. Current transitional arrangements which treat at-call loans as debt for income tax purposes end on 30 June 2004. After this date, such loans may be classified as equity interest for tax purposes. To provide additional certainty for business, the existing transitional rules will be extended to at-call loans before, on and to 30 June 2005. In the meantime the government will develop a carve-out from the debt equity rules to reduce unnecessary compliance costs for small businesses using at-call loans. This will address small business concerns about red tape while maintaining the integrity of the debt equity tax rule. I commend this bill to the House.

Question agreed to.

Bill read a second time.