Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

I rise to speak on the Tax Laws Amendment (2009 Measures No. 5) Bill 2009. This bill has a number of important schedules and was introduced on 16 September. Some of the schedules and matters dealt with are technical and some are quite straightforward. I say at the outset that the coalition will be supporting the passage of this bill through both houses. I will run very briefly through some of the schedules. The first deals with GST law and simply seeks to correct a recent interpretation by the Federal Court of the application of GST law. In doing so, the bill returns GST law to the original intention when the GST was legislated back in 1999 and began operation in 2000.

It would be remiss of me not to mention in speaking on this schedule—and we obviously welcome it—that it was this side of the House that introduced the goods and services tax, and the intention was quite clear. In technical terms, the Federal Court sometime ago contradicted the intent of the law relating to incapacitated entities. The minister has outlined in great detail and the explanatory memorandum outlines in great detail how this simply returns the legal situation back to the original intention. It was widely made clear that this would happen back in February, when the Assistant Treasurer committed to doing just this down the track. So there has, from our view and in a bipartisan way, been certainty about this issue for a period of time, and we are now picking it up in a formal legislative sense in this bill.

I welcome the fact that those opposite—including my friend and colleague the member for Melbourne Ports, who I have known for a very long time and who is in the chamber—are legislating in this tax law amendment bill on the goods and services tax. Every time they legislate on the goods and services tax it is of course a reminder of their now support, embrace and love of the goods and services tax. The member for Melbourne Ports, who was in this place to vote against the goods and services tax—and he is a friend of mine, I’m happy to say—is now, once again, going to be in a position to vote for the integrity of the goods and services tax. That is a great thing and he will take great joy out of knowing he was wrong 10 years ago. Now that he has seen the light he has a chance to make up for that wrong and vote for the integrity of the goods and services tax.

Being 2009, I also find it impossible—and the member for Melbourne Ports would know this—not to mention in the context of the goods and services tax the 10th anniversary of fundamental injustice day, which was declared by the Prime Minister when he was then in opposition and speaking on the goods and services tax bill. He declared the day that the GST was being legislated through the House of Representatives was ‘a day of fundamental injustice’ that people would look back on, and I must look back on it—the member for Melbourne Ports would expect me to do nothing less. It was quite Rooseveltian. It raised images of days of infamy and Pearl Harbor. This was going to be a great and terrible moment in the history of Australia that people would look back on in 100 years time. It is great that just 10 years later, which is a long period of time, we are looking back and have officials responsible for the integrity of the tax act. It is great that in 10 years time there is no anniversary celebration of fundamental injustice day and no marching in the streets to recognise the horror of this day 10 years on.

In fact, the person who declared ‘fundamental injustice day’ is now Prime Minister of the country, presiding over the goods and services tax and protecting the very integrity of it here today. That, of course, is a good thing. There are some on the other side—and I suspect, without being unfair, that my friend the member for Melbourne Ports is one of those—who all along knew that the goods and services tax was an important reform for our country. If that is not the case, he now is legislating something he does not believe in, and that is an accusation I would never make. ‘Fundamental injustice day’ aside, you will understand that, even on a tax law amendment bill on a number of technical issues, I find it absolutely impossible not to recall these events for the chamber.

There is no way, having covered those important events, to traverse neatly into schedule 2 of the bill, which deals with taxation of financial arrangements, but I will deal with that very quickly. This schedule as it relates to the TOFA regime, which has been a longstanding reform issue begun by the previous government, has bipartisan support. This schedule relates to provisions of the pay-as-you-go obligations and it ensures that the introduction of those TOFA reforms does not enable the situation to occur where PAYG instalments can be reduced.

Schedules 3 and 4 of this bill affirm and make clear that certain payments are tax exempt. That was always the intention and the case with so many payments, but this bill, in a belt-and-braces way, ensures that those payments are tax exempt. Schedule 3 deals with payments made with respect to autism, specifically the outer regional and remote payments made under the Helping Children with Autism package. It ensures those payments are exempt from income tax, as they should be. That has always been the intention, but this tax law amendment bill is necessary to remove beyond any doubt that those payments made to families living in regional or remote areas remain tax exempt. Similarly, schedule 4 ensures that payments made under the Continence Aids Assistance Scheme are also exempt from tax.

Schedule 5 extends interest withholding tax exemption to debt issued by the Commonwealth. This really mirrors earlier legislation in a tax law amendment bill—I think at the start of the year—with respect to the states and territories. Last year the coalition supported the passage of that when it was announced and this extends that exemption to debt issued by the Commonwealth.

Schedule 6 deals with some critical tax issues that have been complicated and have taken a period of time to resolve. I know the member for Melbourne Ports, as a fellow Victorian, will appreciate all of these issues. It relates specifically to the tragic bushfires that occurred in Victoria at the start of this year. As those opposite know and as my friend and colleague the chair of the economics committee knows, Australians from every corner gave generously to that fund. It was not just people in Victoria—every corner of Australia gave generously to that fund. The strength of those donations really demonstrated that community spirit we are so proud of in Australia. The schedule enacts an announcement from the Assistant Treasurer on 17 August. It allows for the Victorian Bushfire Appeal Trust to undertake a range of recovery assistance projects without any risk of the Red Cross losing its charitable status.

Essentially, it means that those generous donations can be used in a wider variety of ways than would ordinarily be deemed to be charitable purposes under the law. This was complicated because the law relating to charities is very strictly defined. Clearly in the case of the bushfires and people making donations, the first step that we did here in this Main Committee at the time with the former Assistant Treasurer, Mr Bowen, was to ensure that the payments going into that fund were tax-deductible. The issue now is to ensure that those funds can be spent for the best purpose, that is, to help the most affected communities in the way that they want to be helped.

The law relating to charities is very strictly defined. Without going through the history of it, which goes back over a very long period of time, a lot of things that we would expect to be able to be done were not able to be done with any legal certainty. It was frustrating because it has taken time to get the tax law right on this but essentially these amendments specifically enable that fund to spend money on a wider range of activities. They include providing long-term assistance to orphans aged under 18 years, reimbursing individuals or charitable organisations for eligible activities, providing assistance to individuals whose primary place of residence was destroyed by the bushfires, providing up to $15,000 in financial assistance to individuals who have lived or are still living in transitional housing, and providing up to $10,000 in financial assistance to primary producers. These amendments were, as I said, announced by the Assistant Treasurer back in August. He consulted with me prior to that announcement, and the announcement and this legislation ensure that the amendments have an effective date just prior to the Black Saturday bushfires—they are backdated to the fires that began in Delburn in Gippsland on 29 January.

While tax law amendment bills deal with a whole range of matters, this is an important piece of law; it is a piece of law that ensures that recovery continues with some certainty in what has been a terrible year for those families and those communities in Victoria. We have supported legislation in this regard all along and we are very glad that it is before the House today and enacting that announcement of the Assistant Treasurer.

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