Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

I will just indicate that Labor will be opposing the Greens amendment on sheet 7763. As Senator Cameron stated in his second reading debate speech on behalf of the Labor Party, schedule 2 is the exemption of income earned in overseas employment

The opposition supports this bill's efforts to boost the integrity of our personal tax system by standardising the tax treatment for workers delivering overseas development assistance. This integrity measure improves the consistency of our personal income tax system by upholding the principle that Australians should pay tax on their earnings somewhere.

As a general rule, Australian resident individuals are taxed on their worldwide income through the Australian personal income tax system; however, under the current law all employees of an Australian government agency who work overseas for not less than 91 continuous days delivering official development assistance are exempt from the payment of income tax on the income they have earned while overseas. This provision was originally introduced to provide relief from double taxation—that is, in terms of liabilities in both Australia and the source country—however, the provision no longer serves this purpose, with Australians working overseas often able to avoid income tax in both jurisdictions. As such this measure unifies the tax treatment of all Australian government agency employees by subjecting their income derived in the delivery of ODA overseas to Australian income tax. Notably, Australian Defence Force personnel, Australian Federal Police personnel and individuals delivering official development assistance for a charity or a private sector contracting firm will still maintain eligibility for the exemption, despite these changes.