House of Representatives

Tax Laws Amendment (2005 Measures No. 1) Bill 2005

Second Reading Speech

Mr Brough (Longman - Minister for Revenue and Assistant Treasurer)

I move:

That this bill be now read a second time.

This bill makes amendments to various taxation laws to implement a range of changes and improvements to Australia's taxation system. Firstly, as announced in the 2004-05 budget, this government is amending the Fringe Benefits Tax Assessment Act 1986 to improve access to certain fringe benefits tax exemptions for small business. Schedule 1 will extend the FBT exemption for employer provided remote area housing, by removing the requirement for businesses to establish that such housing benefits are customary in a particular industry. The amendments will also broaden the FBT exemption for work related items to include personal digital assistants and portable printers designed for use with portable computers. In addition, the existing FBT exemptions for relocation costs will be extended to include the engagement of a relocation consultant to assist in the relocation of employees.

Secondly, the bill sets effective life caps for the decline in value of buses, light commercial vehicles, trucks and truck trailers. These statutory caps represent the maximum period over which deductions for the decline in value of these assets can be taken. This will allow taxpayers the option of either continuing to self-assess the effective life appropriate to their circumstances, or utilising the effective life caps as determined by this measure. These amendments enable transport operators to maintain a younger, safer fleet and assist the industry to manage the nation's growing freight task.

Schedule 3 amends the A New Tax System (Goods and Services Tax Act) 1999. The amendments ensure that the goods and services tax will apply where a non-resident enterprise supplies from overseas a right or option to goods, services or other things that are for consumption in Australia. The amendments reflect the broad policy intent of the GST legislation to tax private consumption of most goods, services and other things in Australia. This measure will help ensure that there is competitive neutrality between similar supplies made by offshore and by Australian based businesses and will ensure these latter businesses are not disadvantaged. The amendments will apply from the date this bill is introduced into parliament, reflecting that this is an integrity measure addressing an unintended consequence in the GST law.

Finally, this bill introduces the new mature age worker tax offset. The new tax offset will reward and encourage mature age workers who choose to stay in the work force. This is part of the government's strategy to deal with the demographic challenge posed by the ageing of our population. It recognises that improving the labour force participation of mature age workers will improve productivity, thereby assisting in securing Australia's future economic strength. It also demonstrates the government's commitment to and appreciation of older workers. This measure will provide a maximum annual tax offset of $500 on the income tax liability of workers aged 55 years and over. Full details of the measures in this bill are contained in the explanatory memorandum. I commend the bill and present the explanatory memorandum.

Debate (on motion by Mr Murphy) adjourned.