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Wednesday, 17 June 2009
Page: 3608


Senator COONAN (6:01 PM) —I rise to speak on behalf of the coalition on the Tax Laws Amendment (2009 Measures No. 2) Bill 2009. This bill was introduced at the end of the last sitting and contains eight schedules that deal with various technical aspects of amending taxation law. At the outset, I would like to indicate that the opposition will be supporting this bill, but I do want to briefly run through each schedule within the bill.

Schedule 1 amends several acts, including the Banking Act 1959, the First Home Saver Accounts Act, the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997. It removes the unintended tax implications arising from a failed authorised deposit-taking institution’s relationship with the Australian Prudential Regulation Authority, or APRA, with respect to payments made under the financial claims scheme. The schedule will ensure that payments made under the scheme are treated as if they were made by the failed authorised deposit-taking institutions, or ADIs. It also prevents tax implications from arising for farm management deposit account holders who have their account with failed ADIs when they start a new account with a separate authorised deposit-taking institution.

For individuals with retirement savings accounts with a failed authorised deposit-taking institution, this schedule will ensure that the payments made by APRA into a new retirement savings account in a separate ADI will have the same tax treatment as a rollover superannuation benefit. Similarly, a payment made by APRA into a new first home saver account will be treated as a transfer from one provider to another. This will prevent individuals from claiming the government contribution twice. This schedule also contains certain reporting and withholding requirements for APRA in the case where an ADI fails and payments must be made under the scheme.

Schedule 2 of this bill makes amendments to the Income Tax Assessment Act 1997 and other ancillary legislation to provide greater accessibility to small business capital tax concessions for owners of a capital gains asset used under a passive asset structure. In 2007 the coalition government introduced a range of capital gains tax concessions for small businesses. At that time, changes were also made to the small business entity test and the net asset value test. Businesses in situations where an entity owns a CGT asset but another related entity uses the asset in carrying on a business will now have greater access to those capital gains tax concessions for small businesses.

The coalition welcomes these amendments. Indeed, we have advocated for the small business capital gains tax concessions to be expanded further. Our approach was first outlined by the former Leader of the Opposition, Dr Nelson, in his budget-in-reply speech a little over a year ago. This would be pursued, of course, under an elected coalition government. It will further expand the small business capital gains tax concessions by reducing the active asset test down to five years, giving small business access to these concessions.

Schedule 3 proposes changes to clarify the law with respect to capital gains tax. It amends the Income Tax Assessment Act 1997. This is, I have to say, a highly technical area. The schedule is seeking to remove beyond any doubt what could be a technical interpretation of the law that might, in a worst case scenario, see taxpayers having a capital gains tax liability on receiving a tax offset and the like. This schedule removes any doubt of unintended consequences occurring, which can only be positive.

Schedule 4 provides a refundable tax offset for certain projects approved under the National Urban Water and Desalination Plan. The offsets are to be available for the 2008-09 to 2012-13 income years by way of issuing certificates. Taxpayers who qualify through eligible projects will be able to receive up to 10 per cent of the capital costs, up to a maximum of $100 million per project. I am supportive of these changes, as water supply is very important to everyone. As the government tries to improve the security of water supplies to major cities, this measure will help, I believe, both small and large businesses to ensure that projects proceed as we would want to see them proceed.

Scheduled 5 amends the Income Tax Assessment Act 1997 to update the deductible gift recipient list to include four new entities and extend the eligible time period of three organisations. The four new entities are the Australasian College of Emergency Medicine, ACT Region Crime Stoppers Ltd, the Grattan Institute, and Parliament of the World’s Religions Melbourne 2009 Ltd. The three entities whose eligible time period will be extended are Bunbury Diocese Cathedral Rebuilding Fund, St George’s Cathedral Restoration Fund, and Yachad Accelerated Learning Project—and I can see Senator Sherry over there; maybe he can tell me if I have got that pronunciation right!

Schedule 6 of the bill would expand the operation of the Australian Business Register. The ABR was established by the former coalition government to reduce administrative costs for small businesses by reducing the number of times a business would be asked for the same information by different agencies. Schedule 5 will expand the operation of the ABR by using certain contact information provided by a business to a government agency for updating information at other government agencies. This schedule also allows the ABR to act as the Multi-agency Registration Authority to facilitate electronic dealings with businesses.

Schedule 7 removes the requirement for a business to be a member of the Greenhouse Challenge Plus Program to be eligible to claim more than $3 million of fuel tax credits. This requirement was included by the former coalition government to encourage large fuel-consuming businesses to reduce their emissions. However, this program will cease operation on 30 June 2009; therefore, businesses will not be able to claim more than $3 million of fuel tax credits after 30 June 2009. Schedule 7 will ensure that larger fuel-consuming businesses will still be eligible to claim fuel tax credits.

Finally, schedule 8 will provide a tax exemption for payments made under the clean-up and restoration grants scheme. On 18 February 2009 the Australian government and the Victorian government announced a $51 million assistance package to assist small businesses and primary producers affected by the Victorian bushfires. I think this has been a good package. It includes a $5,000 clean-up and restoration grant, which can be increased up to $25,000 if the sustained damage is significant. What this schedule does is ensure that these grants are not treated as assessable income, and the exemption will apply to 2008-09 and 2009-10 income years.

In conclusion, the Tax Laws Amendment (2009 Measures No. 2) Bill deals with a number of necessary and technical tax matters to ensure the correct operation of the law. The opposition does support these efficiencies and clarifications being made to allow the better operation of the tax law. The capital gains tax changes are valuable. The changes to the Australian Business Register, I think, are positive and assist. The amendments to the Fuel Tax Act on fuel tax credits will no doubt be very useful. For small business involved in the clean-up and restoration in Victoria after those horrific bushfires, the exemption from tax on those grants will certainly be well received. The bill was referred to the Senate Standing Committee on Economics on 19 March 2009 and no submissions were made to the Senate inquiry, which means that there must be almost a full score of support for these particular measures. The committee reported on 7 May and recommended that the bills be passed. I see absolutely no reason to take a different view and I commend the bill to the Senate.