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Wednesday, 27 May 2009
Page: 4457

Mr CHAMPION (10:31 AM) —I had no idea we were discussing debt today. I thought we were discussing the Tax Laws Amendment (2009 Measures No. 2) Bill 2009. The member for Moncrieff did not tell us what their debt policy is or what their debt position is.

Mr Ciobo —Less than yours.

Mr CHAMPION —How much less?

Mr Ciobo —A lot less.

Mr CHAMPION —How much less? We will never hear a figure.

The DEPUTY SPEAKER (Ms S Bird)—Order! Members will not engage in a debate across the table.

Mr CHAMPION —The truth is that the opposition may well attempt to balance the budget but they will raise taxes and slash services to do it. That is what their real policy is and I have spoken about that in this House in other debates.

I should begin my remarks on this bill by commending the Assistant Treasurer on his diligence in preparing these measures included in the bill today. He has made an extensive effort to update several important technical and administrative procedures in our tax law. These amendments are a bit dry but they have very real impacts on the lives of families and workers throughout Australia.

I support all the measures in the bill but I want to focus on four matters within it: firstly, the review of the tax consequences for claimants under the Financial Claims Scheme; secondly, the provisions for tax offsets for national urban water projects; thirdly, the update of fuel tax credit rules; and, finally, support for those affected by the devastating Victorian bushfires.

The first schedule of this bill reflects the government’s continuing commitment to making sure that the impacts of the global financial crisis and the recession do not punish Australian families. One measure that was introduced last October to protect the savings and the financial position of Australians was the Financial Claims Scheme. That gave the Australian Prudential Regulation Authority, APRA, the power to make payments to account holders in failed financial institutions. The establishment of the FCS followed consideration by the Council of Financial Regulators dating back to 2005. It reflects the recommendations made by the HIH Royal Commission in 2003 and by the Financial Stability Forum early this year, which involved the G20.

Obviously this measure was implemented far more quickly than one would have originally planned because of the onset of the global recession. It was an early sign of the government’s commitment to Australians and to the stability of their financial institutions. It is an important program because early access to payments and the security of payments is important to ensure that Australian families, if they are to be affected by the liquidation of an institution, can continue to meet their own day-to-day costs.

This bill ensures that payments made under the scheme do not attract an inappropriate tax liability. Basically it ensures that the taxation treatment of payments from APRA is equivalent to the treatment of payments made by the institution itself. The specific amendments cover capital gains tax, farm management deposits, retirement savings accounts and first home saver accounts. Due to these amendments, capital gains and losses in relation to what is created by the FCS will not have any effect, which is a common-sense proposal. We would not want to lump people with a tax liability that would not have occurred if a financial institution had not collapsed. Similarly, payments made to farm management deposits, retirement savings accounts and first home saver accounts will have to be made into an account of another type, but those transfers will be treated as a rollover and that, again, stops unnecessary or unfair tax consequences from arising. It is the only fair way to deal with situations that may come up in the future. These administrative amendments are common sense. They save families the potential of an unfair tax liability and they help to provide stability to our financial system.

This bill also delivers on important commitments providing refundable tax offsets for projects under the government’s National Urban Water and Desalination Plan. Obviously that is a key plank for the government’s Water for the Future policy. It supports initiatives that deliver a diverse range of water sources for community and for industry, particularly focusing on the efficient use of water.

I have seen firsthand the result that communities can get from projects to save water. In my own electorate of Wakefield, both the Salisbury City Council and the City of Playford Council are world leaders in the reuse of stormwater. At the moment Playford council are constructing the Stebonheath Flow Control Park, which will return about 80 to 120 megalitres into the aquifer which is later reused in parks and for industry. To give you an idea of the effect this has: recently we were at the Stebonheath Flow Control Park to raise an extra $200,000 for playground equipment—part of this government’s election commitments being delivered on the ground. While we were there, the wetlands were being constructed. We had had about 10 millilitres of rain the night before and it was already beginning to be collected in that park—so much so that they were digging the overflow channel just in case they got a bit more rain. Rain, of course, has been a rare thing in Adelaide over the last four years or so.

This government is committed to further projects to provide water security in Adelaide. Under amendments in this bill, eligible projects will be able to receive an assistance rate of 10 per cent of the eligible capital costs up to $100 million per project. That is a very real incentive. It is a measure of this government’s commitment to ensuring the water security of places like Adelaide and across the country. This is in addition to funding of some $228 million that has been made available in the budget to build a desalinisation plant and so double capacity in Adelaide. This is very important given that Adelaide relies almost exclusively on the Murray-Darling Basin for its drinking water. In Adelaide, there is always a bit of finger-pointing at people’s water use upriver, but I think that we do have to look at our own water use and make savings and provision so that we are not relying on that river system.

The bill also reforms the fuel tax credit scheme. (Quorum formed) We can tell that the tactics of the opposition today are just going to be to obstruct the business of the House in order to create chaos in this great institution of democracy. I think it is quite unfair to the government and to the Australian people. Nevertheless, I will continue to remark on the bill. As I was saying, since we are attempting to cut emissions and decarbonise our economy, it made sense in the past to give an incentive for heavy fuel users to monitor and reduce their fossil fuel consumption. Under the current system, those able to claim a fuel tax credit of more than $3 million have to be members of the Greenhouse Challenge Plus program. As this government has adopted a more comprehensive approach to climate change through its Carbon Pollution Reduction Scheme, programs like Greenhouse Challenge Plus have become unnecessary. They are slowly winding up because the CPRS will achieve the same policy outcome but far more effectively.

There are many businesses in Wakefield that are aware of the amendments in schedule 7 of this bill. If they are not adopted, the greenhouse challenge criteria will remain, even if the program does not. As a result, large users of the fuel tax credit scheme will lose the benefit. That would be at odds with the policy intent of the government. Obviously, we want to pass this measure. It is good that the opposition are supporting the bill, despite their antics with quorum calls and their disruption of this House. But every moment they delay these important and sensible measures potentially leaves small and medium businesses and civil contractors out of pocket. I know from my own meetings with the Civil Contractors Federation that the fuel credit system is critical to a functional and profitable civil construction industry, so I would like to see the bill passed quickly and without unnecessary delay.

Finally, this bill delivers important exemptions from the tax on clean-up and restoration grants for small businesses and primary producers affected by the Victorian bushfires. The bushfires were a great national tragedy. Many Australians around the country live with the threat of bushfire. Obviously, we all want to sincerely support anybody affected by that devastating event. People came together right across my own electorate—particularly in the country areas, where they have experienced bushfire themselves—to volunteer, to raise money and to offer support, moral and financial. Obviously we have to acknowledge that compassion and support. There was a spontaneous outpouring right across the country for those affected by both the floods and bushfires in Victoria and the floods in Queensland. I made some donations to a fundraiser in my home town of Kapunda. I know the Mallala community raised $1,400, and literally thousands of people attended a fundraiser at Clare oval to raise $15,000 for that worthy cause. So many people across the country, certainly across my electorate, are putting their hands in their pockets and their hands on their hearts to support people affected by that devastating tragedy.

It is in this spirit that the bill recognises the hardship suffered by so many businesses and primary producers affected by the fire. The assistance package will assist individual businesses to recommence trading as soon as possible. That is a key part of rebuilding and getting things back to normal. These people should not have to worry about tax liabilities arising from the assistance that they have been given. So it is a really important part of the bill—again, a small administrative arrangement which has a huge effect. I commend the bill to the House.