Second Reading SpeechMr Truss (Wide Bay - Minister for Agriculture, Fisheries and Forestry)
That the bill be now read a second time.
The Taxation Laws Amendment Bill (No. 2) 2001 makes amendments to the income tax law and other laws to give effect to the following measures.
Public transport provided free to police officers will be exempt from fringe benefits tax, in recognition of the advantages to public safety of a police presence on public transport.
States and territories will have FBT treatment that is consistent with the treatment given to the Commonwealth. States and territories will be allowed to devolve their FBT obligations to certain state and territory bodies, which will be treated as employers for FBT purposes.
All resident companies, not only those falling within the scope of schedule 5 of the Company Law Review Act 1998, will be allowed to transfer genuine share premiums and capital redemption reserves to their share capital account without tainting that account provided the relevant criteria are satisfied.
A loophole will be closed in the dividend imputation provisions applying to life assurance companies. This will be achieved by limiting the extent to which life assurance companies can apply a payment of franking deficit tax or deficit deferral tax to offset their income tax assessment liability.
There will be a transitional rule in relation to the dividend imputation measure that will provide an alternative treatment in certain circumstances where a liability for franking deficit tax or deficit deferral tax arose before 4 May 1999. The transitional rule overcomes concerns that the measures as originally announced have a retrospective impact.
Charitable institutions whose principal activity is promoting the prevention or control of disease in humans will be assured of access to income tax, sales tax and fringe benefits tax concessions. These amendments will be backdated to ensure that these charitable institutions are always entitled to these measures.
The bill makes technical corrections to the franking rebate rules so that complying superannuation funds, pooled superannuation trusts and life assurance companies continue to be entitled to the franking rebate, and refunds of excess imputation credits, for dividends and distributions that are exempt current pension income or certain other exempt income. A further correction will ensure that registered charities and gift deductible organisations are eligible for refunds of imputation credits in respect of indirect distributions through a trust.
The bill also contains consequential amendments to the income tax law, arising from the reduction in personal income tax rates from 1 July 2000, and a technical correction.
Full details of the measures in this bill are contained in the explanatory memorandum.
I commend this bill and present the explanatory memorandum.
Debate (on motion by Mr Martin Ferguson) adjourned.