David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Hansard source

Firstly, I would like to thank those members who have contributed to this debate on the Tax and Superannuation Laws Amendment (2013 Measures No. 1) Bill 2013. Schedule 1 amends the Income Tax Assessment Act 1997 to clarify the tax treatment of interest paid on unclaimed moneys of superannuation funds, bank and first home saver accounts, life insurance policies and companies from 1 July 2013. This is part of the government's reforms to reunite people with their lost money sooner.

Schedule 2 amends the Fringe Benefits Tax Assessment Act 1986 to update the calculation method for the taxable value of airline transport fringe benefits, given the current business practices of the sector. Also, as part of the reforms, airline transport fringe benefits are being reclassified in the FBT law as a type of in-house benefit.

Schedule 3 is a measure to benefit irrigators who derive payments under the Commonwealth Sustainable Rural Water Use and Infrastructure program. The measure allows them to choose between the existing income tax treatment for those payments and making the payments non-assessable, non-exempt income. A corresponding treatment applies for their matching expenditure to upgrade water infrastructure. Making the choice will ensure that they incur no funding gap between the time they would otherwise be assessed on the payments and the time they would otherwise have fully deducted the expenditure. This measure will encourage irrigators to sign up for the program and therefore will improve the efficiency and productivity of rural water use, making more water available for environmental activities.

The government will be proposing an amendment to remove schedule 4 from this bill. Schedule 4 contains specific rules for trustees and investment managers of self-managed superannuation funds in relation to acquiring assets from and disposing of assets to related parties. The measure is a response to a recommendation of the Super System Review which was undertaken in 2010. Since the time of the review, the government has made significant reforms to the superannuation system, including to the SMSF sector. Further consultation with industry has indicated that the concerns the measure is seeking to address are not as pressing as they were at the time of the review.

Schedules 5 and 6 insert division 160 into the Income Tax Assessment Act 1997, which will allow corporate tax entities to carry back their losses by establishing a refundable tax offset. The government recognises that many businesses in Australia's patchwork economy may be struggling to adapt to the changing economic circumstances. This reform will encourage companies to adapt to changing economic conditions and take advantage of new opportunities through investment. It will do so by providing a cash injection at the time when they need it most. Furthermore, reducing the tax system's bias against corporate risk taking can be expected to increase the quantity and the quality of investment, improving the allocation of resources across the economy. This should have positive flow-on effects for productivity, which in turn will support growth in real wages and employment. The independent Business Tax Working Group, in its final report on the tax treatment of losses, provided the impetus for this measure. To ensure the policy intent of this measure is achieved, the government will propose a minor technical amendment to schedules 5 and 6 to ensure the measure operates effectively in respect of new corporate entities.

Finally, schedule 7 includes some minor technical and machinery amendments to the taxation laws. The government regularly advances schedules like this to ensure our taxation laws continue to operate as intended. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

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