House debates

Wednesday, 2 March 2011

Tax Laws Amendment (2010 Measures No. 5) Bill 2010

Second Reading

9:30 am

Photo of Mike SymonMike Symon (Deakin, Australian Labor Party) Share this | Hansard source

I speak in support of the Tax Laws Amendment (2010 Measures No. 5) Bill 2010. This bill amends various taxation laws to implement a range of improvements to Australia’s tax laws. The first schedule deals with changes in the federal government’s support for our local Australian film and television industry, an issue that I recently spoke on in the House. I believe the industry has a crucial role in providing an image of Australia overseas and in giving us the benefits of local production, not only in what we get to see on our screens but also, particularly, from an employment point of view.

Schedule 1 of this bill amends the eligibility criteria for accessing the film tax offsets by expanding access to film tax offsets in two ways. Firstly, the amendments reduce the minimum qualifying expenditure threshold for the postproduction, digital and visual effects offset from $5 million to $500,000. Secondly, the amendments remove the requirement for films with qualifying expenditure of between $15 million and $50 million to have at least 70 per cent of the film’s total production expenditure as qualifying Australian production expenditure in order to qualify for the location offset. It is estimated that these changes, which will apply retrospectively from 1 July 2010, will increase expenditure on the film tax offsets by $6.9 million over the forward estimates period.

These changes are aimed at attracting offshore productions to Australia and expanding opportunities for Australian postproduction, digital and visual effects providers to bid for international work. The amendments are also expected to increase employment opportunities and to assist in building capacity and expertise in the local film industry, which in turn will provide benefits for domestic productions. The change to the location offset in particular will also reduce compliance costs for affected entities.

Supporting the Australian film and television industry has many benefits for our nation. The Australian films and TV shows watched overseas help people from other nations better understand Australia, encourage overseas tourism and help Australia make a contribution to the world’s storytelling. Locally, a vibrant film and television industry creates highly skilled jobs and builds local expertise and skills in the industry. The industry has a great impact on our local communities. Local content contributes to the development of our national culture and shared identity.

This bill will amend the tax laws to enhance support for foreign investment in local film production. Foreign funding of films and TV dramas has helped expand our local industry over the years, and the overseas investment employs local skilled workers and helps develop facilities and industry expertise. In the three years from 2007-08 to 2009-10, total foreign expenditure on Australian production was $453 million. In 2009-10, five features and two dramas funded from overseas were shot in Australia, accounting for expenditure in Australia of $170 million, which was about 25 per cent of all expenditure on film and TV production in those years. In 2009-10, total expenditure on postproduction, digital and visual effects was $210 million, with $17 million of that funded from overseas. The provisions of this bill allow for an expansion of foreign film and TV expenditure by putting overseas investment into our local industry, and underpinning our local industry with more investment is exactly what we need. These amendments are expected to increase employment opportunities and to assist in building capacity, expertise and knowledge within our local film and TV industry, which is a great thing for our domestic productions.

I turn to schedule 7 of this bill, which provides for an expansion of the education tax refund so that school uniforms can be included as eligible expenses. Federal Labor introduced the education tax refund and now we are expanding the items that can be claimed to include school uniforms. Extending the education tax refund to school uniforms will provide great assistance to Australian families and help to ease their cost-of-living pressures. To receive the education tax refund, parents must be recipients of the family tax benefit part A. The education tax refund allows eligible parents to claim 50 per cent of their eligible education expenses up to the maximum claimable amounts, which are indexed each year and are currently set at $794 per primary school student and $1,588 per secondary school student. The education tax refund will be available for school uniform expenses incurred from 1 July 2011, with the first refunds paid in the 2012-13 financial year. Eligible parents can reduce the cost of their children’s education, and I encourage all parents to keep their receipts and make sure they claim their schooling expenses.

I welcome the expansion of the education tax rebate to cover the cost of clothing and footwear that is required or approved by a school with a school uniform. It is a big expense for many families and it will make a real difference. Anyone who has had children at school knows that the cost of uniforms is a big hit on a family budget. Even if it is only a pair of school shoes, the costs soon add up—and it is not only one pair of school shoes per year. At the time when children go to school they are generally growing quite fast and little feet grow very quickly into bigger feet. Several pairs of shoes a year is not unusual and, if you multiply that by a number of kids, you suddenly have a very large expense. This measure will be a great help.

I recall speaking in this place on the original bill that introduced the education tax refund in November 2008. It was called the Tax Laws Amendment (Education Refund) Bill 2008. Although that is a somewhat boring title for a piece of legislation, it has been of great benefit to over a million Australian families. I spoke of how working Australian families stood to benefit from the 50 per cent rebate of eligible education expenses and of the help this would bring to household budgets. As I noted at the time, the education tax refund is an offset and can even be claimed by those families or persons who have no tax liability. This is especially important for people who receive disability support pension, Newstart or youth allowance, as many recipients have no requirement to pay income tax. As I also noted at the time, the education tax refund is available for those parents whose children are in home schooling and allows them to deliver materials to their own students—that is, their children.

In addition to the cost of school uniforms, as from July next year, the following items are eligible under the education tax refund, many of which parents may not know are claimable. Items such as desktop and laptop computers and components used to build a home computer, along with running costs and repairs are eligible, as are items such as printers, USB flash drives and accessories such as wireless mice and laptop carry bags. If parents lease or hire a computer from their school, this expense can also be claimed. And for anyone who knows how much a set of printer cartridges can cost—a set of four cartridges for an inkjet printer can easily top $120—the education tax refund is a certainly a great help if your children do that sort of work at home. Importantly, the cost of establishing and maintaining a home internet connection is covered—and this is a must for most children who are given tasks to do at home and invariably want to research on the internet. Also covered under the education tax refund is computer software such as word processing programs, spreadsheet and database applications, presentation software, internet filters and antivirus software.

It is not only computer related items that can be claimed under the education tax refund; it also covers school textbooks and other paper based learning materials such as study guides and stationery—for example, pens, pencils, glue and compasses and many other things. The costs of photocopying and printing can also be claimed if a separate receipt is issued. As I also noted in 2008, the expense limit can be combined between the family’s children and, if expenses exceed the limit for the financial year, they can be carried over to the next year—for one year only. If a family has more than one eligible child, the expenses can be pooled and divided between the children involved so that they can have access to the items purchased.

Over a million families claimed the education tax rebate in 2009-10, delivering $615 million directly to those families. But many families who receive family tax benefit part A are still not aware they can claim this benefit. I certainly go out of my way to remind my constituents and anyone I meet that, if they have children and they receive family tax benefit A they can also receive the education tax refund. I spend a lot of time advertising this locally. The more we can get the message out that help is available for families the better.

I know that this measure to include the cost of school uniform clothing and footwear will be very popular, and I look forward to doing my bit to ensure local parents and parents across Australia make the most of the education tax rebate. I commend this bill to the House.


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