David Coleman (Banks, Liberal Party, Minister for Immigration) Share this | Hansard source

Firstly, I would like to thank those members who have contributed to this debate. In the 2018-19 budget, the government responded to the Black Economy Taskforce's final report by announcing measures to address the growing economic and social problem of the black economy. These bills introduce the 2018-19 budget measures.

Schedule 1 to the Treasury Laws Amendment (Black Economy Taskforce Measure No. 2) Bill 2018 introduces changes to deductibility rules, denying a tax deduction for certain payments where an entity such as an employer fully fails to comply with their withholding and reporting obligations, therefore encouraging non-reporting or underreporting of incomes by their employees and contractors. It will send a message that certain black economy behaviours are not legitimate activities by removing deductibility where the obligations are disregarded.

Schedule 2 to the bill extends the taxable payment reporting system to the road freight, security and IT industries, since contractors in these industries are considered by the ATO to be at higher risk of not reporting their income.

Schedule 3 to the black economy bill, along with the Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018, is designed to combat illicit tobacco. Schedule 3 to the black economy bill 2018 alters the Excise Act 1901 to change the point at which tobacco is taxed to more effectively combat illicit tobacco activity. The excise tariff amendment bill alters the Excise Act 1901 to enable the calculation of duty payable once the taxing point is moved. With this change and complementary Customs amendments, all tobacco entering the domestic market will already have had tax paid, removing the opportunity for untaxed tobacco to make its way from warehouses to the illicit market.

Through effective tobacco control policy, Australia has become a world leader in reducing smoking rates. This has improved the health and wellbeing of Australians and reduced the social costs associated with smoking. It is important to support Australia's tobacco control policies with effective measures to combat illicit tobacco, which is a major source of funding for criminal organisations, and to ensure that tobacco products are taxed correctly to continue reducing the prevalence of smoking. These amendments will help to restore the integrity to our tax system. The government is committed to countering black economy practices in Australia. I commend this bill to the House of Representatives.

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