Second Reading SpeechMr Pearce (Parliamentary Secretary to the Treasurer)
That this bill be now read a second time.
This bill will give the force of law in Australia to a protocol amending the Australia-New Zealand double tax agreement. The bill will insert the text of the protocol into the International Tax Agreements Act 1953.
The bill also includes consequential amendments to provide the legislative framework to support Australia's treaty obligations to provide assistance in the collection of tax debts and to exchange information on tax matters with other jurisdictions.
The protocol between Australia and New Zealand was signed on 15 November 2005. Details of the protocol were announced and copies were made publicly available following the date of signature.
The protocol enhances trans-Tasman integrity aspects relating to administering and collecting tax imposed in accordance with the treaty and the laws of both countries. The protocol reflects the government's desire to provide for more effective exchange of information on a broader range of taxes, for example, GST, and to provide for reciprocal assistance in collection of taxes.
The government believes that the conclusion of the protocol and the associated amendments will strengthen the integrity of Australia's tax system. These measures will reduce tax evasion in both countries and will assist in ensuring that tax liabilities on cross-border transactions are correctly determined, through bilateral administrative cooperation between the Australian Taxation Office and the New Zealand Inland Revenue Department.
The protocol also includes an obligation for New Zealand to enter into negotiations with Australia in the event that New Zealand agrees to lower rates of withholding tax with another country. The 'most favoured nation' obligation recognises the importance the government places on lowering withholding taxes imposed on Australian investment in New Zealand, consistent with the direction set in Australia's double tax treaty arrangements with the United States and the United Kingdom.
The enactment of this bill, and the satisfaction of the other procedures relating to proposed treaty actions, will complete the processes followed in Australia for those purposes.
Full details of the amendments are contained in the explanatory memorandum. I commend the bill to the House.
Debate (on motion by Mr Edwards) adjourned.