Second Reading SpeechMr Bowen (Minister for Competition Policy and Consumer Affairs, and Assistant Treasurer)
This bill amends various taxation laws to implement a range of improvements to Australia's tax laws.
Schedule 1 ensures there are no inappropriate tax consequences arising from payments made under the financial claims scheme, which this parliament enacted in October last year. Under that scheme, APRA can make payments to account holders in failed financial institutions and to claimants under general insurance policies with failed insurance companies. The specific amendments cover capital gains tax, farm management deposits, retirement savings accounts, first home saver accounts and various withholding and reporting obligations.
Schedule 2 increases access to the small business CGT concessions for taxpayers owning passively held CGT assets.
These amendments will extend access to the small business CGT concessions to circumstances that are not currently eligible. Owners of passively held assets will now be able to qualify for the concessions under the small business entity test, which was introduced in 2007 to simplify eligibility requirements for the small business concessions.
This means that a taxpayer that owns a CGT asset used in a business by an affiliate or entity connected with the taxpayer, and partners owning certain CGT assets used in the partnership business, will have access to the small business CGT concessions via the small business entity test from the 2007-08 income year.
The schedule also makes a number of minor amendments to refine and clarify aspects of the existing small business CGT concessions provisions so that they operate flexibly and as intended.
Schedule 3 provides a general exemption from CGT for capital gains or capital losses arising from a right or entitlement to a tax offset, deduction or similar benefit. A highly technical interpretation of the income tax law may result in a capital gain or capital loss arising to taxpayers who have a right to receive an urban water tax offset on the satisfaction of the right. This amendment will put beyond doubt that a capital gain or capital loss would not arise for taxpayers in such circumstances, or in other circumstances where taxpayers have a right or entitlement to a tax offset, deduction or other taxation benefit.
Schedule 4 provides refundable tax offsets for eligible projects under the government's $1 billion National Urban Water and Desalination Plan. Under the plan, eligible projects may receive assistance at a rate of 10 per cent of eligible capital costs, up to a maximum of $100 million per project.
This schedule implements the refundable tax offset component of the plan and delivers on the government's election commitment.
Schedule 5 amends the list of deductible gift recipients, known as DGRs, in the Income Tax Assessment Act 1997. Subject to conditions, taxpayers can claim income tax deductions for gifts to organisations with DGR status. DGR status will assist the listed organisations to attract public support for their activities. This schedule adds four new organisations to the act:
- Australasian College of Emergency Medicine
- ACT Region Crime Stoppers Limited
- The Grattan Institute, and
- Parliament of the World's Religions Melbourne 2009 Limited.
This schedule also extends the time limit on the DGR status of three further organisations:
- Bunbury Diocese Cathedral Rebuilding Fund
- St George's Cathedral Restoration Fund, and
- Yachad Accelerated Learning Project.
Schedule 6 amends the A New Tax System (Australian Business Number) Act 1999, or ABN Act, to allow the Registrar of the Australian Business Register to act as the Multi-agency Registration Authority to enable representatives of businesses to be identified for the purpose of communicating electronically with multiple government agencies on behalf of businesses. This is a part of the government's Standard Business Reporting Program. There are also a number of other amendments to the ABN Act that improve the integrity and efficiency of the Australian Business Register and help position the Registrar to take on the role of the Multi-agency Registration Authority.
Schedule 7 amends the Fuel Tax Act 2006 and related provisions elsewhere in the tax law, to remove the provision that businesses must be a member of the Greenhouse Challenge Plus program to claim more than $3 million of fuel tax credits in a financial year. This amendment to the Fuel Tax Act will have effect from 1 July 2009.
The Greenhouse Challenge Plus program will cease after 30 June 2009. The Greenhouse Challenge Plus program provision in the Fuel Tax Act was originally included so that large fuel users would monitor and take measures to reduce their carbon emissions. This outcome will be better achieved through the government's Carbon Pollution Reduction Scheme.
Without this amendment, businesses would be unable to claim fuel tax credits in excess of $3 million in a financial year after 30 June 2009. This would be inconsistent with the policy intent of the fuel tax credit system.
Finally, schedule 8 provides an exemption from tax for the clean-up and restoration grants paid to small businesses and primary producers affected by the Victorian bushfires. This measure recognises the extraordinary hardship suffered by small businesses and primary producers in affected areas, and provides certainty for recipients in terms of tax treatment at a time when they should not need to worry about tax matters.
Full details of this measure are contained in the explanatory memorandum.
I commend the bill to the House.
Debate (on motion by Mr Wood) adjourned.