Monday, 21 June 2010
Tax Laws Amendment (2010 GST Administration Measures No. 3) Bill 2010
I speak in support of the Tax Laws Amendment (2010 GST Administration Measures No. 3) Bill 2010. Amendments to tax laws are made by schedule, and the first schedule deals with GST and cross-border transport supplies. It has been suggested by the industry that this change is necessary and it is important reform to allow certainty and clarification with respect to the transportation of goods from export as well as import. The second schedule deals with GST relief for telecommunications supplied for global roaming in Australia. That has been on the cards for some time, as the member for Farrer said. It deals with the Melbourne agreement, which was an important reform. The third schedule deals with GST amendments to the third-party payments adjustment provisions. Again, that is an amendment as a result of consequences which were unintended by previous legislation.
The first schedule, as I said, deals with the GST and cross-border transport supplies. It is important that nonresidents are not drawn into the Australian GST system, and it is important that jurisdiction with respect to the collection of tax is clarified and made certain. You do not want companies or individuals caught up in our system when they should not be. Parts of the transport industry have expressed concern in relation to this. They have expressed concern about compliance costs, and they have expressed concern about difficulties in complying with the GST law. The first schedule amends the GST act to ensure that the transportation of goods by subcontractors within Australia that forms part of the international transport of those goods by another entity from or to Australia is taxable unless the transport supply is made to a nonresident that is not in Australia. Those amendments operate from 1 July this year. The changes, as I have said, have been sought by the industry. It is consistent with what the government has said previously, and it is about reducing tax compliance and ensuring a regulatory system in which small businesses and medium businesses have the best opportunity and climate to operate free of regulation. At the same time, it improves the integrity of our GST system.
The second schedule deals with GST relief for telecommunications supplied for global roaming in Australia. The Melbourne agreement, particularly the provision known as article 6.1.3, provides that the tax levied in accordance with the national law of a country on collection charges for international telecommunications services can only be collected in respect of international services billed to customers in that country. It was always thought, as the member for Farrer said, that international telecommunications supplies were not considered to be taxable under our GST law. I always take the view that inherently rulings by the Commissioner of Taxation are a good thing—they prevent litigation, reduce administrative costs and provide certainty with respect to the businesses and practitioners who deal with taxation law, with compliance costs and also with business generally. However, sometimes the Commissioner of Taxation can get it wrong, and sometimes decisions made by the Commissioner of Taxation can confuse and cause difficulties. What we are doing here is restoring the situation to what the business community and the accountancy field always thought it was and what the government policy always intended to ensure.
Global roaming by Australian residents when travelling overseas is not subject to GST as it is not connected with Australia for the purpose of GST, and we intend to ensure that we fulfil our obligations under the Melbourne agreement. We want to make sure that nonresidents are not subject for GST purposes. The previous government made the announcement, as the member for Farrer said, in December 2006 that it would take steps in relation to this matter but, as is so often the case when the Rudd government brings in legislation, we hear that the previous government thought it might deal with this in its 13th or 14th year but never got around to actually doing anything. This is important reform. The business community will think it is sensible, the accountancy industry will think it is sensible, and anyone who deals with this area will also think it is a prudent measure by the government.
The third schedule relates to adjustments for third parties. This is a confusing area, but what it actually means is that the inappropriate interaction of the GST will not create third-party payment adjustments which are unintended. It means that the correct amount of GST outcome will be achieved in circumstances where there are third parties involved in the supply chain. We want to make sure that there are no consequences adverse to consumers or to groups such as religious groups or joint ventures or in fact GST groups. Entities that deal with one another also need to be aware of the consequences of that. This has been relevant especially to the automotive industry, who have expressed some concerns particularly in respect of the public consultation process. They will welcome this change. The member for Farrer spoke about this and I do not intend to outline exactly what the consequences of the schedule 3 amendments will be.
I think this is important reform. All three schedules add to the certainty and clarification of tax law in this country. They add to business certainty. They promote a climate in which business can operate with less regulation and a lighter burden. They create a climate in which we can ensure that businesses—particularly small and medium-sized businesses as well as those in the transportation sector and the automotive industry—can operate profitably, employ more people and create the jobs which we hope will get us through the difficult days we face now and in the future.