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Monday, 25 June 2018
Page: 6174


Mr HART (Bass) (15:14): The extension of Single Touch Payroll reporting is to extend what currently applies to entities with 20 or more employees—the so-called substantial employers—to all entities with employees. Likewise, the facilitation of more regular reporting generally extends that which applies to substantial employers to all entities. The commissioner's collection and compliance measures have been enhanced. Previously, for the purposes of the director penalty provisions in division 269, a director was under an obligation to ensure that the company complies with its obligations with respect to an estimate under division 268 commencing on the initial day. An 'initial day' was defined as 'the day the company is given a notice of the estimate'. The new law redefines the initial day.

For PAYG liability estimates, the initial day will be, for companies who are small and medium withholders, the last day of the period identified in the notice of the estimate, and, for companies which are large withholders, the day on which the company would have been obliged to pay the underlying liability. In cases of nonpayment of superannuation guarantee liability estimates, the initial day will be the day from the end of the quarter to which the estimate relates. This is important to ensure that directors are liable for defaults determined by reference to the particular failure, the subject of a notice. Given the resources available to large withholders, it is entirely appropriate that director penalties are determined by reference to the date upon which the company would have been obliged to pay the underlying liability.

There is a pleasing extension of the power of the tax commissioner to require an entity to provide a security deposit upon the obtaining of a court order for that purpose. The security deposit will be with respect to an existing or future related tax-related liability. Whilst it might not prevent the scourge of phoenixing, where businesses are reincorporated and re-established after insolvency with seeming impunity, it is an important measure to ensure that taxation obligations can be the subject of a security. There are limitations upon the remission of director penalties where a company is placed into voluntary administration where there is an unreported superannuation guarantee charge liability and/or where the company has an obligation to pay an estimate of the superannuation guarantee charge by a particular date and the date at which they pay the underlying liability has passed. It's important for these issues to be the subject of an inquiry so that we, this House, can be positively satisfied that these measures are sufficient to stop the present widespread underpayment of superannuation.

Superannuation industry stakeholders broadly support the bill. However, Industry Super Australia is concerned that the bill carves out labour-hire and contract workers from the information that the employers are to report to the Australian Taxation Office as part of the Single Touch Payroll system. There is a reasonably broad consensus amongst the ISA, the Australian Institute of Superannuation Trustees and the ASFA that the bill does not go far enough to address the problem of unpaid super, and those organisations have called for changes, including, firstly, the removal of the $450 monthly income threshold for eligibility for superannuation guarantee, making pay cycle reporting for superannuation guarantee payments by employers compulsory, making it compulsory for employers to report ordinary-time earnings, including super in the Fair Entitlements Guarantee program and facilitating third-party assistance for employers with unpaid super. As to those issues, it is not rare for us to see in our constituency offices many complaints by employees that have been ripped off by employers going into liquidation where they are relying upon their Fair Entitlements Guarantee program, but of course this doesn't presently apply to superannuation.

The first two of these measures are also included in the former member for Mayo's private member's bill to address unpaid super, which is in the House. Other measures that bill had proposed which were not included in the government bill are: including the superannuation guarantee in the National Employment Standards; creating a duty for a trustee to take reasonable steps to notify their members where it could be reasonably expected that a member should have received a contribution from an employer but did not and also requiring the tax commissioner to conduct a review of the employer's compliance with the superannuation guarantee payment obligations; and including recommendations to improve compliance. It is important, as I've said previously, that the bill be referred to a Senate inquiry to give stakeholders the opportunity to raise their concerns that the bill does not go far enough and to allow some technical issues to be explored further.

Schedule 7 also contains new provisions with respect to information sharing. This enables the sharing and verification of tax file numbers which have been obtained in accordance with Commonwealth law—that is, between the commissioner and Commonwealth agencies. The changes ensure the Commonwealth agency that can legally request the tax file number of an individual is able to verify that the tax file number actually belongs to that individual by having the number verified by the Commissioner of Taxation.

Schedule 8 makes a number of miscellaneous amendments to the taxation, superannuation and other laws, for example minor technical changes to correct spelling errors and repeal inoperative provisions and to update references to the tax law to reflect changes to the names of state and territory legislation and specifically listed deductible gift recipients. There are some amendments to the Fuel Tax Regulation 2016, which did not explicitly state some charges which were to be calculated on weight rather than volumes where appropriate and also did not explicitly state that charges would be determined at a maximum of once a year. This is the existing practice.

There's an amendment to the Migration Amendment (Temporary Activity Visas) Regulation 2016. Through an oversight, certain consequential amendments were not included in legislation resulting from a change in classification of subclass 416 visa to subclass 403. The changes are beneficial to those affected, despite some retrospectivity. For those who must check these things, there's also an amendment to the Fuel Tax Act 2006 to change the words 'tax fuel credit' to 'fuel tax credit'. As a commercial lawyer who often trawled through documents looking for inconsistencies, this latter issue strangely pleased me. There are two amendments which rectify unintended consequences of previous government bills. It might be fairly said that these errors should've been foreseen, such as a problem which was created with the introduction of the government's 2016 superannuation changes.

Schedule 9 amends the Income Tax Assessment Act 1997 to specify some further entities as deductible gift recipients. Again, having been a commercial lawyer advising organisations on the establishment of trusts, including some deductible gift recipient organisations, it's always interesting to see some of the new organisations that are specifically listed in the taxation legislation. These organisations are: Australian Philanthropic Services Limited, which is proposed to be listed from 1 July 2016; an organisation called Foundation 1901 Limited, which is to be registered from 1 September 2016 to 31 August 2021 inclusive; and an organisation called Sydney Chevra Kadisha, which is to be registered from 1 January 2018 to 31 December 2019.

For those who must be aware of these things, Australian Philanthropic Services Limited is a registered charity that sets up and administers private ancillary funds for individuals and families as well educating individuals, foundations and advisers concerning ancillary funds and the making of philanthropic grants. Having had the pleasure of acting as trustee of a substantial private charitable trust created within a will, I know that good works can be done either within a private charitable trust or, in this case, through the establishment of private ancillary funds. I was very interested to note that Foundation 1901 Ltd is a registered charity established to engage with and educate Australians about Federation. It engages with Australians through education campaigns to maximise understanding of the lessons of the history of Federation and its continued importance to Australia. Finally, Sydney Chevra Kadisha is a registered charity that provides funeral services to the Jewish community of New South Wales irrespective of an individual's ability to pay, by providing subsidised or free burial services.