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

I thank you at the outset, Mr Deputy Speaker, for acknowledging shortcomings, including your own. Can I say thank you very much to the members who have taken part in this debate on the Tax Laws Amendment (2007 Measures No. 2) Bill 2007except for the member for Sydney, I might say; that might have been the most painful 10 minutes of debate I have had to sit through in this parliament. It is a pity that she does not have the capacity to contribute along the same lines as perhaps the member for Barton would have been able to—a person who is able to contribute constructively and honestly to debate in this place. The contribution by the member for Sydney was, frankly, nothing more than an attempt to muddy the facts with the diatribe that she normally goes on with. It really is a sad reflection on her contribution in this place. I think the House should record the fact that the contribution that was made by the member for Sydney was not factual in any way. Nonetheless, I want to acknowledge in particular the member for Mitchell, Mr Cadman, who I think provided an exceptional contribution to this debate. He obviously went through a very well-thought through process to compile his contribution. He should be recognised for that.

I also want to comment on some of the points that were made by the member for Prospect and, again, to correct some of the confusion and lack of factual basis in some of the comments that he made. The first point I make is that it takes time to amend law and to consult on the amendments. The opposition are running around this place and in the business community, on one hand saying that we do not consult enough with business and then, to a separate audience, saying that we take too long to implement changes and amendments to the law. The fact is that they cannot have it both ways. They cannot argue that we need a further process of consultation and then argue at the same time that we should be making these decisions in a shorter period of time. It is like the other process that they are indulging in at the moment of telling one group that they can cut government expenditure, yet running into the next room and, in that speech, talking about further government largesse, about how they would be able to provide more money for them were they in government. It is hypocritical, and it is a nonsense to suggest that you can have one with the other. They are really showing their ignorance about the consultation process that is undertaken.

The government remains very committed to conducting a timely consultation process. But, when we talk about tax law, we are talking about complicated amendments to the law. They need to be properly thought through, and we need properly to be able to engage with people in the business community and with other stakeholders to make sure that we provide for best practice to keep this economy going as well as it is in the current day.

I also note the member for Prospect’s claim that the government opposed referral of TLAB7 to a Senate committee. I encourage the member, again, to get his facts straight on this issue, because it was the government that initially sought to refer the bill. Labor said that this was not needed, and then it was actually Labor which did the backflip to seek a referral of the bill. So that also needs to be recorded, as part of my contribution to this debate, to correct some of the non-factual contributions made by those opposite.

Schedule 1 to this bill makes amendments to the capital allowance system to clarify how mining, quarrying and prospecting rights are depreciated. The changes align the treatment of these assets more closely with other depreciating assets and ensure that the provisions operate as intended.

Schedule 2 to this bill improves the fairness of the taxation rules applying to income earned from certain boating activities, while ensuring that the tax system cannot be used to subsidise the private use of boats. This schedule implements the government’s decision to allow taxpayers to deduct expenses denied under the current rules, up to the amount of boating income earned.

Schedule 3 to this bill improves the operation of the R&D tax offset for small and medium businesses, ensuring that the law reflects the government’s original policy intent for the offset. These amendments will ensure that all companies in a group are covered by the R&D tax offset provisions and extend the time companies have to choose the offset. The amendments will also allow companies to object to decisions made by the Commissioner of Taxation regarding the allowable amount of the offset. Further, the amendments ensure that the existing exception to the minimum expenditure of $20,000 for contracted expenditure to a registered research agency applies to both R&D tax deductions and the R&D tax offset.

Schedule 4 delivers the government’s 2006-07 budget announcement to extend the gift provisions to promote philanthropic giving. The amendments will allow taxpayers to claim a tax deduction for the donation of certain publicly listed shares to deductable gift recipients. Schedule 5 to the bill further demonstrates the government’s support for philanthropy by amending the list of deductable gift recipients in the tax legislation to extend the current listing for the Finding Sydney Foundation and to list the American Australian Association Ltd and the Bunbury Diocese Cathedral Rebuilding Fund. Deductable gift recipient status will assist these organisations to attract public support for their activities. Further, schedule 6 to this bill extends the eligibility for tax deductions for contributions to deductable gift recipients where an associated minor benefit is received with an eligible fundraising event.

Schedule 7 of this bill makes technical amendments to ensure that the definition of ‘exempt entity’ covers all entities exempt under the income tax law. Schedule 8 to this bill amends the venture capital regime to relax the eligibility requirements for foreign residents investing in venture capital limited partnerships and Australian venture capital funds. It introduces a new set of taxation concessions for Australian residents and foreign residents investing in early-stage venture capital activities. This is achieved through a new investment vehicle called an ‘early-stage venture capital limited partnership’.

The $250 million divestment requirement is reasonable because the government is introducing generous tax concessions for early-stage vehicles. Given the emphasis on start-up and seed capital, the need for ongoing tax concessions once an entity reaches the size of $250 million diminishes. Moreover, if the partnership divests the entity into a venture capital limited partnership as it approaches the $250 million limit, it can continue to attract tax-free gains without any divestment requirement. The requirement to divest once an entity reaches $250 million applies for up to six months after the end of an income year, and this provides ample opportunity for divestment to occur. This measure further demonstrates that the government’s ongoing support for new business continues, and the promotion of industry innovation will always be supported by this government.

I thank those members who have participated in this debate, and I commend the bill to the House.

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