House of Representatives

Treasury Laws Amendment (2019-20 Bushfire Tax Assistance) Bill 2020

Second Reading Speech

Mr FRYDENBERG (Kooyong-Treasurer)

I move:

That this bill be now read a second time.

Over the course of this bushfire season Australia has faced devastating fires which have deeply affected communities across the country.

The unprecedented scale and damage of these fires has warranted an unprecedented response. The tireless efforts of our professional and volunteer firefighters to protect life and property cannot be understated. Nor can the generosity of the broader Australian and international communities, who have come to the assistance of those impacted by the fires.

The Morrison government is conscious of the enormous challenges of rebuilding bushfire-devastated communities. Australians are resilient and they want to rebuild, and we will be with them every step of the way. The government has made an upfront $2 billion commitment and established the National Bushfire Recovery Agency to coordinate a national response to rebuild communities and livelihoods.

The government is committed to supporting volunteer firefighters involved in the firefighting effort as well as ensuring the communities and businesses affected by the bushfires can get back on their feet.

We acknowledge and support the generous donations being pledged to bushfire-affected communities. This generosity is being seen in the partnership between the Business Council of Australia and equity trustees to establish the Australian Volunteer Support Trust and the Community Rebuilding Trust in response to the 2019-20 Australian bushfires.

The Australian volunteers trust provides support to volunteers and their immediate families where the volunteer has died or become seriously injured during their service in responding to a disaster in Australia. The Community Rebuilding Trust will receive, manage and mobilise donations to help rebuild and re-establish communities affected by disasters in Australia. These two charitable trusts will be chaired by Jeff Kennett AC and General Sir Peter Cosgrove AK CVO MC (Retd) and will be supported by boards of eminent Australians as well as representatives from Australia's emergency service volunteer organisations. The government has announced it will extend DGR status to these two charitable trusts to encourage philanthropy and provide support for individuals, families and communities affected by the bushfires. This is implemented through schedule 2 of this bill.

Schedule 1 to the bill comes in two parts. The first part gives effect to the Prime Minister's announcement on 29 December 2019 that the Australian government would in cooperation with the New South Wales state government provide tax-free financial support to volunteers in the New South Wales Rural Fire Service who are employed by small or medium businesses and had volunteered for an extended period to assist in combatting the bushfires. This tax treatment will also apply to similar arrangements for volunteer firefighters reached between the Australian government and other states and territories. Payments for eligible volunteer firefighters will be treated as non-assessable non-exempt income, which means:

the payments will not be counted as assessable income; and
the payments will not reduce any tax losses that can be carried forward to future years by the taxpayer.

The second part of the schedule gives effect to announcements made by the Prime Minister and myself on 8 January 2020 that in addition to the tax relief for payments to volunteer firefighters, government disaster relief and recovery payments in response to the 2019-20 bushfires will be free from tax.

Under the bill, bushfire disaster payments made or non-cash benefits provided by the states and territories and local governments that are not already free from tax will be made non-assessable non-exempt income. Payments will be made free from tax including the Disaster Recovery Allowance and payments under the disaster recovery funding arrangements 2018.

The bill also creates a regulation-making power which will provide flexibility to ensure later payments that might arise in relation to the 2019-20 bushfires can quickly be made tax-free if required.

Further information on the support being provided by the ATO can be found on the ATO website. Impacted individuals or businesses can also contact the ATO's emergency support information line on 1800806218.

Schedule 2 to the bill amends the Income Tax Assessment Act 1997 to include the Australian Volunteer Support Trust and the Community Rebuilding Trust on the list of deductible gift recipients. DGR status allows members of the public to receive income tax deductions for the donations they make to these two organisations. Full details of the measures are contained in the explanatory memorandum. I commend the bill to the House.

Leave granted for second reading debate to continue immediately.

I commend the bill to the House.

Debate adjourned.

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