Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill makes numerous improvements to Australia’s tax laws.

Schedule 1 provides a concession for the costs of establishing a carbon sink forest. This measure will encourage the establishment of carbon sink forests and, in turn, make an important contribution to carbon sequestration and deliver natural resource management benefits. Establishment costs will be immediately deductible for trees established in carbon sink forests in the 2007-08 to 2011-12 income years inclusive. After this initial period, establishment costs will be deductible over 14 years and 105 days at a rate of seven per cent per annum.

To be eligible for the deduction, the taxpayer must be carrying on a business and the carbon sink forest must meet environmental and natural resource management guidelines.

Separately to this bill, it is important to highlight that the government is developing standards for robust and transparent offsets to be accredited for use in the Australian emissions trading system. A discussion paper on incentives for abatement, including carbon offsets, will be issued in September 2007.

Schedule 2 provides tax-free grants under the Tobacco Growers Adjustment Assistance program 2006 to tobacco growers who undertake to exit all agricultural enterprises for at least five years. The grants are being paid following the loss of a market in Australia for domestically grown tobacco. This measure assists tobacco growers to adjust to the fundamental change in their market and to develop alternative businesses.

Schedule 3 amends the list of deductible gift recipients in the Income Tax Assessment Act 1997. Deductible gift recipient status will assist the listed organisations to attract public support for their worthy activities.

Schedule 4 makes minor technical amendments to the early withdrawal provisions to the farm management deposits scheme. The changes will align the tax law with the current practice for declaring either all primary producers in a geographical area, or specified primary producers within a geographical area, to be in exceptional circumstances. This amendment will improve the farm management deposit scheme by ensuring that all primary producers, who are eligible for early withdrawal due to exceptional circumstances, will retain the tax benefits.

Full details of the measures in this bill are contained in the explanatory memorandum.

Debate (on motion by Ms Plibersek) adjourned.