House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)

General outline and financial impact

Conservation tillage refundable tax offset: amendment to the definition of 'eligible no-till seeder'

Schedule 1to this Bill amends the definition of 'eligible no-till seeder' in section 385-235 of the Income Tax Assessment Act 1997 (ITAA 1997) to ensure that an eligible no-till seeder can comprise just the tool, or the combination of the cart and the tool.

This measure is favourable to taxpayers carrying on a primary production business.

Date of effect: This measure applies to an eligible no-till seeder which the taxpayer starts to use or has installed ready for use to carry on a primary production business between 1 July 2012 and 30 June 2015. The refundable tax offset is claimable in the taxpayer's income tax return for the 2012-13, 2013-14 or 2014-15 income years. This is consistent with the existing conservation tillage refundable tax offset provisions.

The measure may have a retrospective impact but are of a beneficial nature to affected entities.

Proposal announced: This measure was announced in the Assistant Treasurer's Media Release No. 058 of 29 June 2012.

Financial impact: The financial impact of this measure is not zero, but rounded to zero, in each of the income years from 2012-13 to 2015-16.

Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 1, paragraphs 1.13 to 1.19.

Compliance cost impact: Nil.

Phase out the mature age worker tax offset

Schedule 2 to this Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) to phase out the mature age worker tax offset from 1 July 2012 for taxpayers born on or after 1 July 1957.

Date of effect: The measure was announced on 8 May 2012 to take effect on 1 July 2012.

Proposal announced: This measure was announced in the 2012-13 Budget.

Financial impact: This measure provides savings of $255 million over the forward estimates period.

Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 2, paragraphs 2.12 to 2.15.

Compliance cost impact: Nil.

Compliance regime for gaseous fuels and blending exemptions

Schedule 3 to this Bill amends the Excise Act 1901 and the Excise Tariff Act 1921 to provide a robust and more sustainable compliance regime for liquid petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG). It also makes some minor and consequential changes to legislation to ensure the gaseous fuels legislation works as intended.

Schedule 4 to this Bill amends the Excise Act 1901 to clarify when the Commissioner of Taxation, may, by legislative instrument, specify circumstances when the creation of certain fuel blends is not considered to be excise manufacture.

Date of effect: The amendments to the Excise Act 1901 apply in relation to gaseous fuels sold or supplied after the date of Royal Assent.

Proposal announced: These amendments are technical in nature and ensure that the 2011 Alternative Fuels legislation works as intended. They have not been announced.

Financial impact: Nil

Human rights implications: These Schedules do not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 3, paragraphs 3.41 to 3.48.

Compliance cost impact: No significant impact.

Deductible gift recipients

Schedule 5 to this Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) to update the list of deductible gift recipients (DGRs) by adding one entity - The Diamond Jubilee Trust Australia - as a DGR.

Date of effect: The listing of The Diamond Jubilee Trust Australia applies to gifts made after 31 October 2012 and before 1 July 2015.

Proposal announced: This proposal was announced on 7 September 2012.

Financial impact: Nil.

Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 4, paragraphs 4.10 to 4.14.

Compliance cost impact: None.

Wine equalisation tax

Schedule 6 to this Bill amends the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act) to ensure that a wine producer will not be entitled to the wine equalisation tax (WET) producer rebate on other wine they use in manufacture, except where the producer of the other wine (or supplier) notifies the subsequent producer.

The amendments implement a voluntary notice system such that a producer of the other wine (or supplier) may notify the subsequent producer that the producer of other wine is entitled to rebate on a specified amount of the other wine, or that the producer is not entitled to the rebate on the other wine.

The amendments also make minor technical amendments to the WET Act. The amendments update references to offences and penalties under the Act to ensure that these provisions accord with current drafting practice.

Date of effect: The WET producer rebate amendments apply to assessable dealings on or after 1 December 2012 or the day on which this Bill receives the Royal Assent, whichever is later. The technical amendments are taken to have effect on the day this Bill receives Royal Assent.

Proposal announced: The measure was announced in the 2012-13 Budget, and was to commence on 1 July 2012. Its deferral from the original start date was announced in the Assistant Treasurer's Media Release No. 57 of 29 June 2012, to allow for continued consultation with the wine industry.

Financial impact: The measure is estimated to result in a gain to Budget revenue over the forward estimates period of $35 million, assuming a start date of 1 December 2012, comprising:

Human rights implications: This Schedule may raise human rights issues because it contains an offence of strict liability, which may raise concerns with respect to the presumption of innocence. See Statement of Compatibility with Human Rights - Chapter 5, paragraphs 5.42 to 5.50.

Compliance cost impact: Low. The measure is generally limited in scope to wholesale sales of wine intended for further manufacture. The system of voluntary notices is intended to minimise the burden imposed on small and medium sized wineries.