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Wednesday, 9 February 2005
Page: 86


Senator CHAPMAN (3:18 PM) —The issues raised by Senator Bolkus in this debate and during question time are quite erroneous and false. He has raised the issue of grants to victims of the bushfires on Eyre Peninsula in my home state of South Australia being taxable. The fact is that grants provided to resident individuals and families are not taxable. In terms of grants to businesses, while they are treated as assessable income, obviously the associated expenses are deductible. What Senator Bolkus is suggesting is that these people, who are obviously in some need and warrant assistance—and it is assistance with which the Commonwealth government has been forthcoming because of the parlous situation in which they have found themselves as a consequence of their suffering from the bushfires—should be given a double benefit from the government. Fair is fair. They are being given support through these grants.

Those grants in effect will not be taxed because they will be used to purchase goods and equipment that will be tax deductible in due course. Therefore, no tax will be payable on the grants because of the application of the funds and the way in which they have been used. To ensure tax fairness, grants remain assessable income as far as taxation is concerned. In due course, because of the purpose for which the grants are used, they will receive a tax deduction. That is a longstanding feature of tax law. It is not simply something that this government has dreamt up and is applying. It has been a feature of tax law under all governments. Grants to businesses affected by the 2003 Canberra fires and the Victorian bushfires were not treated any differently in this regard. As I said, this longstanding feature is to ensure fairness in our tax laws, and fairness and equity in tax treatment.

The relief package which the Commonwealth government has provided to people on Eyre Peninsula is substantial. Of course, that reflects the devastating nature and effects of these ravaging bushfires. This relief package specifically and effectively targets and assists those who are affected. Among the assistance and benefits provided is a crisis payment from the Department of Family and Community Services. This, of course, gives the lie to what Senator Bolkus said, which was that the Commonwealth has no concern for the victims of these bushfires. Centrelink granted 48 claims totalling some $15,000 before the ex gratia assistance was announced by Minister Hockey on 14 January 2005. As soon as the impact of the bushfires on people was evident, those crisis payments were made available through Centrelink. They have now been subsumed by the subsequent announcement of the ex gratia assistance on 14 January. As at 7 February, at the beginning of this week, Centrelink had received some 355 claims, and 262 of those had already been processed. A total of approximately $285,000 in ex gratia assistance had already been paid as at the beginning of this week.

Payments of $1,000 per eligible adult and $400 per eligible child have been made available to those whose principal place of residence has been destroyed or is uninhabitable and to those who have lost an immediate family member as a result of the fires. Also, very importantly, Centrelink has provided staff to assist on the ground, including customer service staff, an additional psychologist and social work resources to assist those devastated by these bushfires.

Then there has been assistance provided by the federal government, the Howard government, to the South Australian state government to assist in dealing with this disaster. Under the natural disaster relief arrangements, the Australian government will reimburse the state government 50 per cent of expenditure on eligible personal hardship and distress, including emergency payments for food, clothing, accommodation, repairs to housing, the repair or replacement of essential items of furniture and personal effects, and psychological counselling. If the expenditure exceeds certain thresholds, the federal government will reimburse up to 75 per cent of the cost of these eligible payments. As Senator Hill reinforced earlier, the Defence Force Reserve brigade is assisting the South Australian government with recovery efforts through the provision and use of heavy equipment, front-end loaders, bulldozers and the like. (Time expired)