Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Hansard source

To begin with, I would like to thank members who have taken part in the debate on the Tax Laws Amendment (2006 Measures No. 3) Bill 2006. The government is providing income support payments to farmers and small business owners, and one-off business assistance grants to businesses, that have been adversely affected by Cyclone Larry and Cyclone Monica. The parliamentary amendments proposed to this bill will provide certain tax concessions for those payments. I am tabling a supplementary explanatory memorandum which explains the operation of the tax concessions. This bill and the amendments implement a variety of changes and improvements to the tax laws. The amendments to the first measure in this bill extend eligibility for the beneficiary tax offset to farmers and small business owners in receipt of Cyclone Monica income support payments. This means that both Cyclone Monica and Cyclone Larry income support payments will be eligible for the beneficiary tax offset. This ensures consistency with the taxation treatment of Newstart allowance.

The amendments relating to the second measure in this bill make assistance payments to businesses under the cyclones Larry and Monica business assistance funds tax free. This is equivalent to the treatment given to payments received from the Cyclone Larry business assistance fund under this measure. The third measure in this bill extends eligibility for the beneficiary tax offset to drought affected farmers who receive income support payments, as announced in the 2006-07 budget. The fourth measure represents a further component of a simplified imputation system and inserts the share capital tainting rules into the Income Tax Assessment Act 1997. This is broadly consistent with the old rules.

The next measure in this bill provides an exemption from capital gains tax for recipients of Work Choices grants and adds a generic provision to expand the capital gains tax exempt status to include other government grants that reimburse expenses. The next measure provides a tax offset to taxpayers who have a Medicare levy surcharge liability or an increased liability as a result of receiving an eligible lump sum payment in arrears.

The seventh measure amends the Superannuation Guarantee (Administration) Act 1992 to ensure a superannuation fund or retirement savings account provider continues to report to the Commissioner of Taxation on an annual basis. The eighth measure in this bill excludes from the fringe benefits reporting requirements fringe benefits provided to address certain security concerns relating to the personal security of an employee, or their associate, that arise from their employment. The next measure protects revenue and the integrity of the taxation system by preventing superannuation funds from inappropriately using pre 1 July 1988 funding credits.

The 10th measure in this bill will allow those prescribed private funds and public ancillary funds that distribute to deductible gift recipients that are not charities but are income tax exempt—such as public ambulance services—to obtain an Australian business number. The next measure in this bill gives effect to the announcement in the 2005-06 budget to create five additional deductible gift recipient general categories to cover war memorials, disaster relief, animal welfare, charitable services and educational scholarships. The 12th measure will address the potential exploitation of certain GST charity concessions. The changes in this measure confirm that the GST concessions apply only to deductible gift recipients and not to any non-charitable activities of entities that operate the deductible gift recipients.

The next measure in this bill makes a technical clarification to the Tax Laws Amendment (Improvement to Self Assessment) Act (No. 2) 2005 to ensure that the reduced four-year amendment period for income tax assessments involving tax avoidance applies from the 2004-05 income year, as announced by the government. The 14th measure delivers enhanced assistance for the wine industry under the wine equalisation tax producer rebate scheme by increasing the rebate to $500,000. The last measure in this bill amends the GST act to ensure supplies involving properties such as serviced apartments and strata title units leased to hotel operators remain input taxed. This will avoid the need for many small investors to register for the GST. For the reasons I have outlined, I commend the bill to the House.

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