House of Representatives

Tax Laws Amendment (2011 Measures No. 6) Bill 2011

Second Reading Speech

Mr Shorten (Assistant Treasurer and Minister for Financial Services and Superannuation)

Mr Shorten (Maribyrnong-Assistant Treasurer and Minister for Financial Services and Superannuation) (09:19): I move:

That this bill be now read a second time.

This bill amends various taxation laws to implement a range of improvements to Australia's tax laws.

Schedule 1 exempts the outer regional and remote payments made under the Better Start for Children with Disability initiative from income tax.

This amendment is important for families with disabled children in regional Australia. The Better Start for Children with Disability initiative provides funding for early treatment, early intervention, for children with diagnosed impairments. This is important because treating children with disabilities early in their lives is shown to be more effective than later treatment. Children with diagnosed disabilities such as sight and hearing impairments, cerebral palsy, Down syndrome or fragile X syndrome will now have a better start to life under this initiative.

The outer regional and remote payments, made under the Better Start for Children with Disability initiative, are payments of $2,000 available to families in rural Australia. This will support these families, who often have to travel long distances and spend extra money to access services for children with disabilities. This is, of course, in addition to the $6,000 paid to all parents with children under the age of six with disability diagnosed.

These $2,000 payments to assist with the extra cost if you live in remote regional Australia are often considered income for taxation purposes. The outer regional and remote payments provide important help to regional families, so the Gillard government believes that, in this case, these payments should not be taxed. This amendment ensures that the payments will not be taxable income.

Schedule 2 provides an exemption from fringe benefits tax for transport, from an employee's usual place of residence to their usual place of employment, where the employee is an Australian resident employed in a remote area overseas. This arrangement is commonly known as a fly-in fly-out arrangement. This exemption will ensure that Australian residents working for Australian employers in remote areas on fly-in fly-out arrangements are taxed consistently, regardless of whether they are working in Australia or overseas, as well as eliminating any possibility of double taxation on such benefits.

The measure will apply to fringe benefits provided after 1 July 2009, when Australian residents working in remote areas overseas potentially became assessable on their foreign employment income.

Schedule 3 amends the list of deductible gift recipients (DGRs) in the Income Tax Assessment Act 1997. Taxpayers can claim income tax deductions for certain gifts to organisations with DGR status. DGR status will assist the listed organisations to attract public support for their activities.

Schedule 3 primarily adds two new organisations to the 1997 Income Tax Assessment Act, namely, the New Zealand government's Christchurch Earthquake Appeal and the Cancer Australia Gift Fund. The New Zealand government established the Christchurch Earthquake Appeal to help the communities, families and people of Christchurch and the Canterbury region in the wake of the devastating earthquake which hit Christchurch on 22 February 2011. Listing the fund allows Australians to donate directly to the fund and claim a tax deduction.

The government announced the amalgamation of the National Breast and Ovarian Cancer Centre with Cancer Australia on 15 June 2010. The listing of the Cancer Australia Gift Fund is to allow funds to be used to work directly with stakeholders to improve breast cancer outcomes for women, reduce mortalities from breast cancer, and improve the wellbeing of women diagnosed with the disease.

Full details of the measures in this bill are contained in the explanatory memorandum.

Debate adjourned.