House of Representatives

Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019

Second Reading Speech

Mr SUKKAR (Deakin - Assistant Treasurer and Minister for Housing)

I move:

That this bill be now read a second time.

This bill contains a package of important measures designed to importantly improve the integrity of Australia's tax system, save businesses time and money - (Quorum formed) through implementing an electronic invoicing framework and protect workers' superannuation.

Schedule 1 to the bill improves the integrity of the tax treatment of concessional loans made to a tax-exempt entity that is privatised by removing inappropriate tax deductions which arise on the repayment of loan principal for certain privatised entities.

Schedule 2 to the bill will ensure that partners in partnerships can't inappropriately access the small business capital gains tax concessions when they alienate future income from the partnership. Partners will now only be eligible for the concessions when such rights make the assignee a partner in that partnership.

Schedule 3 to the bill is an integrity measure that will deny deductions for some taxpayers for expenses associated with holding vacant land. These amendments will improve the integrity of the tax system by tightening the link between claiming deductions for holding vacant land and earning assessable income, and will apply to the 2019-20 income year and future years.

Schedule 4 to the bill will extend to family trusts a specific anti-avoidance rule that applies to other closely held trusts that engage in circular trust distributions. This will better enable the ATO to pursue family trusts that engage in these arrangements.

Schedule 5 to the bill amends the Taxation Administration Act 1953 to allow the ATO to disclose to credit reporting bureaus the tax debt information of businesses that have owed the ATO at least $100,000 for more than 90 days and, importantly, have not effectively engaged with the ATO to manage their debt. This measure will encourage businesses to engage with the ATO and repay their debt in a more timely manner.

Schedule 6 to the bill amends the Taxation Administration Act 1953 to allow the ATO to implement an electronic invoicing framework - known as e-invoicing - in Australia.

Finally, schedule 7 to the bill protects hardworking Australians' superannuation by closing a legal loophole which has been used by some unscrupulous employers to short-change employees who make salary sacrificed contributions. The changes, in particular, will:

prevent employers from using salary sacrificed contributions to satisfy the employer's superannuation guarantee obligations; and
prevent employers from reducing the base on which they calculate their superannuation guarantee obligations by the amount of the salary sacrificed contributions.

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

Debate adjourned.