Luke Simpkins (Cowan, Liberal Party) Share this | Hansard source

I rise to speak on the Tax Laws Amendment (Norfolk Island CGT Exemption) Bill 2016. It is always nice to have the opportunity to speak on matters to do with Norfolk Island. Norfolk Island is a place that I have had a long-term interest in. I had the opportunity to visit there in 1979 when I was still in high school and since then on several occasions in the last few years as the chair of the Joint Standing Committee for the National Capital and External Territories.

I am very pleased to be part of a government that has seen what action needs to be done. It is nice to have bipartisan support for these measures that we have seen come through in previous legislation with regard to changing the governance arrangements on Norfolk Island. It was important that those changes took place. I thank the previous minister, Minister Briggs, for his determination to get the best possible outcomes for the people of Norfolk Island—all the people on Norfolk Island, not just the elites. It is good that as a government we progressed these bills that needed to pass to be able to provide the best possible deal for Norfolk Islanders.

The island itself is a spectacular place in Australia; there is no doubt about it. It is a very nice place to visit if you are lucky enough to have been there. The scenery is wonderful and the people are very friendly. It also plays an interesting part in Australian history. It was in 1788, not long after the First Fleet landed in Sydney, that the colonists went out to Norfolk Island as well. Since then, Norfolk Island has been firmly within this nation's area. It has been part of Australia.

As the chair of the Joint Standing Committee for the National Capital and External Territories, I know and my committee has known that all Australians should have access to a reasonable level of service and amenities despite being in a remote location such as Norfolk Island. The committee, during this parliament, has looked closely at the situation for this part of Australia and made a number of recommendations. The recommendations were all adopted by the government. Clearly the services, infrastructure and welfare arrangements were not of a reasonable standard on Norfolk Island. Such arrangements on mainland Australia are financed through the tax system. It was certainly clear that a better future for Norfolk Islanders would be provided through changed governance arrangements together with the implementation of the Australian tax and welfare system.

It is true to anyone who visits Norfolk Island that the roads and other infrastructure are not in good shape. The hospital reminds me of regional base hospitals in country towns in the 1960s and 1970s, and the financial system for those health services is just not up to the job. For those who have been able to afford to, islanders have often travelled to Australia for medical treatment. Through the overall changes the government is progressing, the health system on Norfolk Island will soon be improved with a better delivery of health and aged care services.

This bill is one of a number of bills that have been designed to amend the income tax laws to implement overall improvements to the way in which Norfolk Island is transitioning into Australian tax laws. Certainly we as a committee were mindful of the need to ensure that radical and traumatic change was not part of what needed to be done. This bill will actually provide a full capital gains tax exemption on assets held by Norfolk Island residents.

There is no doubt that many on Norfolk Island have struggled in the years since self-government began in 1979. An independent health system was simply not up to the task. The economy has continued to struggle in the face of inconsistent tourism revenues and overall economic problems. Consistent with the committee's report, in May 2015 the parliament passed the Norfolk Island Legislation Amendment Act 2015. That bill made the changes required to commence the integration of Norfolk Island into the Australian tax and social welfare systems including Newstart and other pensions but also enabled access to Medicare and the Pharmaceutical Benefits Scheme.

All income will be considered within the mainstream taxation system. The multiple part-time jobs that are so often the means by which islanders derive their income and sustain themselves will be part of the system but all will at last be underpinned by social security system and government provided services that will, through the Australian government programs, help to rejuvenate infrastructure in Norfolk Island facilities.

I recall from our inquiry into the governance and economic situation and the future for Norfolk Island in 2014 there were a number of people that spoke to us about the impact of the implementation of the Australian tax system on Norfolk Island. This bill does relate to those sorts of concerns and it is good that, through this bill, the same exemptions for the introduction of capital gains tax that were offered on the mainland in 1985 will also be provided for those on Norfolk Island.

Since the committee's report, the administrator, the Hon. Gary Hardgrave, and Commonwealth officials have been working with constructive locals and with the Norfolk Island Advisory Council to work out how the plans to apply the tax and welfare system will translate to the way things have been done in the past. This legislation is required because things are different on Norfolk, and they have been done differently there over time. The point was made that there was a lack of formal documentation regarding the sale of assets and a local way that assets have been inherited, so Commonwealth law must take that into account, and that would make the application of the capital gains tax more difficult. I am pleased that the minister has understood these differences and has provided this bill to address those concerns and the realities of Norfolk Island. The passage of this bill will, therefore, provide a full capital gains tax exemption on assets held by Norfolk Island residents before the announcement to that effect on 24 October 2015.

Everything about the process that has been followed, and the action taken by this parliament and the Australian government, has been focused on what will be in the best interests of the individuals on Norfolk Island. There is no magic involved and there are no silver bullets to fix the economy on the island. The Australian government has been determined to ensure a reasonable quality of life is available to everyone on Norfolk Island. I know that some people on Norfolk Island have been opposed to the change in governance arrangements and also opposed to the implementation of the Australian tax system but, for the vast majority of Norfolk Islanders, these changes are necessary, highly beneficial and desired.

I am pleased that the legislative changes for Norfolk Island have bipartisan support, as did the work of the Joint Parliamentary Committee on the National Capital and External Territories. This bill properly acknowledges the circumstances of Norfolk Island and I am pleased to endorse it to the House, as I endorse all the steps that the government has taken to advance the welfare of the people of Norfolk Island as Australians.

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