House of Representatives

Treasury Laws Amendment (2021 Measures No. 3) Bill 2021

Second Reading Speech

Mr SUKKAR (Deakin - Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing)

I move:

That this bill be now read a second time.

This bill will implement a number of urgent and important measures which are designed to provide relief and support to Australians in need.

Schedule 1 to the bill amends the Medicare Levy Act 1986 and A New Tax System (Medicare Levy Surcharge - Fringe Benefits) Act 1999 to increase the Medicare levy low-income thresholds for singles, families, and seniors and pensioners, consistent with increases in the consumer price index. These changes will ensure that low-income households who did not pay the Medicare levy in the 2019-20 income year will generally continue to be exempt in the 2020-21 income year if their incomes have risen in line with, or by less than, the consumer price index.

The Medicare levy low-income thresholds ensure that people who pay no personal income tax due to their eligibility for structural offsets - such as the low-income tax offset or the seniors and pensioners tax offset - generally do not incur the Medicare levy.

The changes to the thresholds mean that no Medicare levy will be payable for individual taxpayers with taxable income that does not exceed $23,226 in 2020-21, which is an increase from $22,801. Single seniors and pensioners with no dependants who are eligible for the seniors and pensioners tax offset will not incur a Medicare levy liability if their taxable income does not exceed $36,705, which is an increase from $36,056.

Further, in combination with the individual thresholds, couples and families who are not eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy if their combined taxable income does not exceed $39,167, which is an increased from $38,474. Couples and families who are eligible for the seniors and pensioners tax offset will not be liable to pay the Medicare levy if their combined taxable income does not exceed $51,094, which is an increase from $50,191. The thresholds for couples and families go up by $3,597 for each dependent child or student, which is an increase from $3,533.

The increase in thresholds will apply to the 2020-21 income year and future income years.

Schedule 2 to the bill introduces an amendment to the National Housing Finance and Investment Corporation Act 2018 - the NHFIC Act - to establish the Family Home Guarantee.

From 1 July 2021, 10,000 guarantees will be made available over four years to eligible single parents with dependants - who are predominantly women - to build a new home or purchase an existing home with a deposit of as little as two per cent, regardless of whether that single parent is a first home buyer or a previous owner-occupier.

The family home guarantee recognises the importance of housing in providing a foundation for social, economic and emotional wellbeing.

By establishing the family home guarantee, the government is providing a pathway to home ownership for single parents with dependants who've struggled to save enough for a deposit while paying rent and/or restarting their lives, allowing them to purchase a modest home sooner, subject to the individual's ability, of course, to service a loan.

The amendments to the NHFIC Act operate at a high level and will be supported by the amendments to the National Housing Finance and Investment Corporation Investment Mandate Direction 2018.

Schedule 3 to the bill will exempt eligible payments made by the Australian government to thalidomide survivors from income tax and from the social security and veterans' entitlement income test.

The Australian government's 2021 budget measure Support for Australia's Thalidomide Survivors will provide $44.9 million over four years and $3.9 million per year ongoing to thalidomide survivors.

Schedule 4 to the bill provides an income tax exemption for qualifying grants made to primary producers and small businesses affected by the February and March 2021 storms and floods, which had a devastating impact on communities in Australia.

Schedule 4 provides that qualifying grants are category D grants provided under the joint Commonwealth-state Disaster Recovery Funding Arrangements 2018 where those grants relate to the storms and floods in Australia that occurred due to rainfall events between 19 February 2021 and 31 March 2021. These include small business recovery grants of up to $50,000 and primary producer recovery grants of up to $75,000.

These grants provide support in addition to other assistance that the Australian and state governments have provided to assist communities as they begin to build and recover following these devastating events.

Impacted small businesses and primary producers are encouraged to apply for these grants. Further information on disaster recovery assistance is available on the Disaster Assist website.

Finally, schedule 5 to the bill amends the Income Tax Assessment Act to include the Alliance for Journalists' Freedom Ltd, the Andy Thomas Space Foundation Ltd, Youthsafe, RAS Foundation Ltd, the Judith Neilson Institute for Journalism and Ideas and the Great Synagogue Foundation Trust on the list of deductible gift recipients. Schedule 5 also extends the specific listing of the Centre for Entrepreneurial Research and Innovation and Sydney Chevra Kadisha. DGR status allows members of the public to receive income tax deductions for donations of $2 or more that they make to these eight organisations.

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

Debate adjourned.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).