Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Hansard source

It is with great pleasure that I take the opportunity to speak to the Tax Laws Amendment (2009 Measures No. 6) Bill 2009. It gives me a chance to talk about the specific measures contained in the bill, a number of which are very important to many Australians and of course to many in my electorate of Corangamite. It also gives me a chance to say a few words about taxation policy in a broader sense, including Labor’s commitment to a progressive taxation system that enables this country to fund the services that we critically need.

This bill is another example of how Labor is committed to having an efficient and effective taxation system to support this country. It is an example of how the Rudd Labor government is getting on with the job of improving and refining our taxation system. It is an example of how we are always trying to develop fair and balanced taxation law. That is unlike the opposition, whose economic credibility has gone out the window, particularly in the last few days with respect to comments made by Senator Joyce. We are trying to develop a tax system that works for working families and, importantly, for our industries. We are undertaking this process through this legislation.

Schedule 1 of this bill abolishes the capital gains tax trust cloning exception. Previously taxpayers could use the exception to change effective ownership of an asset, potentially eliminating tax liabilities on accrued capital gains, undermining the equity and integrity of the tax system. This measure also provides a limited capital gains rollover for the transfer of assets between trusts, with no material discretionary elements, sometimes referred to as fixed trusts, with the same beneficiaries. This will ensure that capital gains tax considerations are not an undue impediment to the restructure of those trusts, while ensuring that subsequent changes to the manner and extent to which those beneficiaries can benefit from the trusts are subject to appropriate tax consequences.

Many people in the Australian community are concerned by trusts. Many people do believe that often it is a mechanism by which people can avoid their taxation liabilities. Trusts are not always set out in that way, but often the Australian community believe that they are. There are occasionally loopholes within the tax system that are exploited inappropriately by people, and the Rudd government is closing off some of those loopholes here today with these measures.

Schedule 2 of the bill is a measure which removes significant income tax impediments to mergers between complying superannuation funds by permitting the rollover of capital losses and revenue losses realised under the merger and the transfer of previously realised capital and revenue losses. This measure is aimed at assisting the superannuation industry, which was one of the great triumphs of the Hawke-Keating governments. I know that many people on the other side will disagree with this measure. They fundamentally hate to see the success of Australian superannuation reform because it was an idea born out of the Australian trade union movement and of course implemented via the last Labor government. Not only has the Australian superannuation industry been brilliant for working Australians; it has been fantastic for our economy.

I would like to take the opportunity in this debate to address a couple of particular areas of interest to me. Superannuation reforms put in place by the previous Labor government and by the Australian trade union movement have been fantastic for our economy and I believe are playing a significant role today in assisting our economy out of the worst global financial crisis. These changes reflect Labor’s ongoing commitment to superannuation and economy-wide reform.

Schedule 3 amends the Income Tax Assessment Act 1997 to clarify the circumstances in which income derived by life insurance companies with respect to immediate annuity business qualifies as non-assessable, non-exempt income. Schedule 4 amends the Income Tax Assessment Act 1997 to specifically list two new organisations as deductible government recipients, and changes the name of one organisation. In order for an organisation to qualify as a deductible gift recipient it must fall within one of the general categories set out in division 30 of the Income Tax Assessment Act 1997, which is a very important mechanism for Australians, particularly in terms of giving gifts to appropriate charities. I believe that these changes are fair and prudent measures that will assist with the efficient management of the taxation system.

Schedule 5 exempts from income tax the income recovery subsidy for the north-western Queensland floods of January and February 2009. The member for Moreton so eloquently took us through those consequences, and the member for Kennedy also raised these very important issues in question time. I believe a fair tax system is fundamental to Australia and to enable us as a government to deliver the services necessary for Australians. It enables us to continue to drive much-needed reform of our economy.

Schedule 6 of this bill relates to high-strength spirits that are used in a broad range of industries such as the pharmaceutical, chemical, manufacturing and food sectors. Examples include mouthwash and antibacterial hand sanitiser. This measure enables those types of things to be appropriately taxed within the meaning of the act. The Rudd government has approached the taxation act with a real reform zeal. Later this year we will have the release of the Henry taxation review, which will set out the Rudd Labor government’s agenda in the taxation area for the coming decade. I commend this bill to the House.

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