Second Reading SpeechMr SLIPPER (Fisher-Parliamentary Secretary to the Minister for Finance and Administration)
That this bill be now read a second time.
The Taxation Laws Amendment Bill (No. 5) 2002 will amend various income tax laws to make the following amendments:
There will be a special transitional measure to address the concerns of oyster farmers who use the traditional stick farming method of capturing oyster spat about the difficulties for them in complying with the trading stock rules.
The transitional rule will assist the oyster farmers by attributing a value for the oyster trading stock of these farmers at the start of the 2001-02 income year, based on a value per stick multiplied by the number of sticks used to capture the oyster spat. The stick method of calculating the value of trading stock allows oyster farmers to avoid excessive compliance costs.
Schedule 2 of the bill will remove the potential for double taxation where amounts are paid for work in progress.
Work in progress will be partially completed work that has not yet reached a stage where a recoverable debt has arisen in respect of the work. It commonly arises in the context of a change in the composition of a professional partnership, for example accountants or lawyers, but the measure is not limited to a particular industry or particular types of entities. Work in progress will not include partially completed goods or partially completed structures.
In the case, for example, of a partner leaving a partnership, a payment for work in progress will be deductible for the remaining partners, and receipt of an amount for work in progress will be assessable income for the departing partner. When the work is completed and invoiced or paid for, the amount invoiced or paid will naturally be income of the partnership.
Schedule 3 contains technical corrections and amendments to the capital allowances system to ensure it operates as intended and interacts appropriately with related provisions. In particular, there will be finetuning of the provision governing the deductibility of blackhole expenditure to ensure it operates as the government intended.
Finally, schedule 4 of the bill will make technical amendments to enable the commissioner to recover all PAYG withholding amounts by making an estimate of the outstanding liability. In addition, it will allow taxpayers to have the estimate of the withholding amount reduced or revoked by giving the commissioner a statutory declaration. The amendments will apply to amounts due and payable in the financial year ending 30 June 2002 and in subsequent years.
I commend the bill to the House and present the explanatory memorandum.