House debates

Wednesday, 28 October 2009

Tax Laws Amendment (2009 Measures No. 5) Bill 2009

Second Reading

Debate resumed from 16 September, on motion by Mr Shorten:

That this bill be now read a second time.

11:45 am

Photo of Tony SmithTony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | | Hansard source

I rise to speak on the Tax Laws Amendment (2009 Measures No. 5) Bill 2009. This bill has a number of important schedules and was introduced on 16 September. Some of the schedules and matters dealt with are technical and some are quite straightforward. I say at the outset that the coalition will be supporting the passage of this bill through both houses. I will run very briefly through some of the schedules. The first deals with GST law and simply seeks to correct a recent interpretation by the Federal Court of the application of GST law. In doing so, the bill returns GST law to the original intention when the GST was legislated back in 1999 and began operation in 2000.

It would be remiss of me not to mention in speaking on this schedule—and we obviously welcome it—that it was this side of the House that introduced the goods and services tax, and the intention was quite clear. In technical terms, the Federal Court sometime ago contradicted the intent of the law relating to incapacitated entities. The minister has outlined in great detail and the explanatory memorandum outlines in great detail how this simply returns the legal situation back to the original intention. It was widely made clear that this would happen back in February, when the Assistant Treasurer committed to doing just this down the track. So there has, from our view and in a bipartisan way, been certainty about this issue for a period of time, and we are now picking it up in a formal legislative sense in this bill.

I welcome the fact that those opposite—including my friend and colleague the member for Melbourne Ports, who I have known for a very long time and who is in the chamber—are legislating in this tax law amendment bill on the goods and services tax. Every time they legislate on the goods and services tax it is of course a reminder of their now support, embrace and love of the goods and services tax. The member for Melbourne Ports, who was in this place to vote against the goods and services tax—and he is a friend of mine, I’m happy to say—is now, once again, going to be in a position to vote for the integrity of the goods and services tax. That is a great thing and he will take great joy out of knowing he was wrong 10 years ago. Now that he has seen the light he has a chance to make up for that wrong and vote for the integrity of the goods and services tax.

Being 2009, I also find it impossible—and the member for Melbourne Ports would know this—not to mention in the context of the goods and services tax the 10th anniversary of fundamental injustice day, which was declared by the Prime Minister when he was then in opposition and speaking on the goods and services tax bill. He declared the day that the GST was being legislated through the House of Representatives was ‘a day of fundamental injustice’ that people would look back on, and I must look back on it—the member for Melbourne Ports would expect me to do nothing less. It was quite Rooseveltian. It raised images of days of infamy and Pearl Harbor. This was going to be a great and terrible moment in the history of Australia that people would look back on in 100 years time. It is great that just 10 years later, which is a long period of time, we are looking back and have officials responsible for the integrity of the tax act. It is great that in 10 years time there is no anniversary celebration of fundamental injustice day and no marching in the streets to recognise the horror of this day 10 years on.

In fact, the person who declared ‘fundamental injustice day’ is now Prime Minister of the country, presiding over the goods and services tax and protecting the very integrity of it here today. That, of course, is a good thing. There are some on the other side—and I suspect, without being unfair, that my friend the member for Melbourne Ports is one of those—who all along knew that the goods and services tax was an important reform for our country. If that is not the case, he now is legislating something he does not believe in, and that is an accusation I would never make. ‘Fundamental injustice day’ aside, you will understand that, even on a tax law amendment bill on a number of technical issues, I find it absolutely impossible not to recall these events for the chamber.

There is no way, having covered those important events, to traverse neatly into schedule 2 of the bill, which deals with taxation of financial arrangements, but I will deal with that very quickly. This schedule as it relates to the TOFA regime, which has been a longstanding reform issue begun by the previous government, has bipartisan support. This schedule relates to provisions of the pay-as-you-go obligations and it ensures that the introduction of those TOFA reforms does not enable the situation to occur where PAYG instalments can be reduced.

Schedules 3 and 4 of this bill affirm and make clear that certain payments are tax exempt. That was always the intention and the case with so many payments, but this bill, in a belt-and-braces way, ensures that those payments are tax exempt. Schedule 3 deals with payments made with respect to autism, specifically the outer regional and remote payments made under the Helping Children with Autism package. It ensures those payments are exempt from income tax, as they should be. That has always been the intention, but this tax law amendment bill is necessary to remove beyond any doubt that those payments made to families living in regional or remote areas remain tax exempt. Similarly, schedule 4 ensures that payments made under the Continence Aids Assistance Scheme are also exempt from tax.

Schedule 5 extends interest withholding tax exemption to debt issued by the Commonwealth. This really mirrors earlier legislation in a tax law amendment bill—I think at the start of the year—with respect to the states and territories. Last year the coalition supported the passage of that when it was announced and this extends that exemption to debt issued by the Commonwealth.

Schedule 6 deals with some critical tax issues that have been complicated and have taken a period of time to resolve. I know the member for Melbourne Ports, as a fellow Victorian, will appreciate all of these issues. It relates specifically to the tragic bushfires that occurred in Victoria at the start of this year. As those opposite know and as my friend and colleague the chair of the economics committee knows, Australians from every corner gave generously to that fund. It was not just people in Victoria—every corner of Australia gave generously to that fund. The strength of those donations really demonstrated that community spirit we are so proud of in Australia. The schedule enacts an announcement from the Assistant Treasurer on 17 August. It allows for the Victorian Bushfire Appeal Trust to undertake a range of recovery assistance projects without any risk of the Red Cross losing its charitable status.

Essentially, it means that those generous donations can be used in a wider variety of ways than would ordinarily be deemed to be charitable purposes under the law. This was complicated because the law relating to charities is very strictly defined. Clearly in the case of the bushfires and people making donations, the first step that we did here in this Main Committee at the time with the former Assistant Treasurer, Mr Bowen, was to ensure that the payments going into that fund were tax-deductible. The issue now is to ensure that those funds can be spent for the best purpose, that is, to help the most affected communities in the way that they want to be helped.

The law relating to charities is very strictly defined. Without going through the history of it, which goes back over a very long period of time, a lot of things that we would expect to be able to be done were not able to be done with any legal certainty. It was frustrating because it has taken time to get the tax law right on this but essentially these amendments specifically enable that fund to spend money on a wider range of activities. They include providing long-term assistance to orphans aged under 18 years, reimbursing individuals or charitable organisations for eligible activities, providing assistance to individuals whose primary place of residence was destroyed by the bushfires, providing up to $15,000 in financial assistance to individuals who have lived or are still living in transitional housing, and providing up to $10,000 in financial assistance to primary producers. These amendments were, as I said, announced by the Assistant Treasurer back in August. He consulted with me prior to that announcement, and the announcement and this legislation ensure that the amendments have an effective date just prior to the Black Saturday bushfires—they are backdated to the fires that began in Delburn in Gippsland on 29 January.

While tax law amendment bills deal with a whole range of matters, this is an important piece of law; it is a piece of law that ensures that recovery continues with some certainty in what has been a terrible year for those families and those communities in Victoria. We have supported legislation in this regard all along and we are very glad that it is before the House today and enacting that announcement of the Assistant Treasurer.

11:57 am

Photo of Craig ThomsonCraig Thomson (Dobell, Australian Labor Party) Share this | | Hansard source

It is always a pleasure and an honour to follow the member for Casey. He always has some gems to share with the House in his contributions. I always used to see him as one of the progressive Liberal Party members and he—

Photo of Darren ChesterDarren Chester (Gippsland, National Party) Share this | | Hansard source

And he is!

Photo of Craig ThomsonCraig Thomson (Dobell, Australian Labor Party) Share this | | Hansard source

Well he probably is because, unlike in the ETS debate where we have some of his colleagues harking back to views of the last century, the member for Casey is only stuck in the last decade. In terms of the Liberal Party and where he is, he is one of the progressives, which is good to see. It is always a little bit sad when you hear the member for Casey talking about the history of the Liberal Party through his rose coloured glasses. It almost brings a tear to your eye, talking about the glory days that used to be. But it is always a pleasure to follow him in terms of his contributions.

I rise to support theTax Laws Amendment (2009 Measures No. 5) Bill 2009. There are six schedules in this bill and I will endeavour to look at each one in a little detail. Firstly, schedule 1, as an overview, protects the GST revenue in light of an adverse Federal Court decision handed down on 12 December 2008. The decision in the Deputy Commissioner of Taxation v PM Developments Pty Ltd is contrary to the stated policy intention that the representative of an incapacitated entity is liable for GST on transactions within the scope of its appointment. It is also contrary to the Commissioner of Taxation’s administration of the law since the introduction of the GST. These amendments will amend the GST law with effect from 1 July 2000 to ensure the law achieves the stated policy objective.

Schedule 2 amends the pay as you go, or PAYG, instalment provisions to address unintended consequences arising out of amendments to those provisions contained in the Tax Law Amendment (Taxation of Financial Arrangements) Act 2009. The effect of the PAYG amendments to the TOFA Act is arguably to substantially change the basis on which a PAYG instalment liability is calculated but this had the potential to decrease PAYG instalment payments. Any decrease will result in deferral of revenue which will be recouped when the relevant taxpayer lodges the income-tax return.

Schedule 3 exempts from income tax the outer regional and remote payment made under the Helping Children with Autism package. Schedule 4 exempts from income tax those payments made under the Continence Aids Payment Scheme. Schedule 5 amends the Income Tax Assessment Act 1936 to extend eligibility for exemption from interest withholding tax to debt issued by the Commonwealth or Commonwealth authorities. Schedule 6 provides the Victorian Bushfire Appeal Fund independent advisory panel with greater scope to support communities affected by the 2009 Victorian bushfires.

Looking at these amendments in a little bit more detail, under schedule 1, the Federal Court decision in the Deputy Commissioner of Taxation v PM Developments Pty Ltd handed down on 12 December 2008 held that a liquidator is not liable for the GST arising from transactions occurring during the period of the liquidator’s appointment. Instead, the court held that the GST liability is a liability of the company in liquidation. The Federal Court decision is contrary to the stated policy intention that the representative of an incapacitated entity is liable for GST on transactions within the scope of its appointment. It is also contrary to the Commissioner of Taxation’s administration of the GST law. The proposed amendments are intended to restore the stated policy intention with effect from 1 July 2000, the introduction date of the GST, and we heard in such eloquent terms from the member for Casey his longstanding commitment to these laws. Transitional provisions will apply to ensure that the amendments do not adversely impact taxpayers who have complied with the commissioner’s interpretation of the law or who have acted in good faith.

The proposed amendments will provide that a representative of an incapacitated entity is liable or entitled to the GST consequences of transactions within the scope of its appointment. For example, when a representative sells an asset of an incapacitated entity, if the sale is subject to GST and the price therefore is GST inclusive the representative will be liable to pay GST of 1/11th of the sale price to the commissioner. Similarly, if a representative purchases assets as part of managing the affairs of an incapacitated entity he will be entitled to claim an input tax credit to offset the GST included in the purchase price. The imposition of liability on a representative only relates to post-appointment GST amounts that are in relation to transactions within the control of the representative. Pre-existing GST liabilities remain with the incapacitated entity.

The revenue impact of the court’s decision if no action is taken is estimated to be a reduction of $655 million over the forward estimates period, representing refunds of GST paid by representatives and ongoing revenue costs. The proposed amendments will have a nil or negligible impact over the forward estimates period as they seek to restore the status quo. We need to ensure that the GST revenue of $655 million which I have just outlined is protected over the forward estimates. The Federal Court decision is contrary to the stated policy intention that the representative of an incapacitated entity is liable for GST on transactions within the scope of its appointment. It is also contrary the Commissioner of Taxation’s administration of this law since the introduction of the GST. Retrospective amendment is not expected to adversely affect taxpayers but will protect the revenue by preventing claims for refunds of amounts paid by representatives of incapacitated entities.

Turning to schedule 2 of the bill covering the pay-as-you-go instalments and taxation of financial arrangements interaction issues, the amendment contained in this schedule reverses the changes the Taxation of Financial Arrangements Act made to PAYG instalment systems, thus preventing a potential decrease in the amount of PAYG instalments paid. In addition, the amendment ensures that where an entity has become liable to pay a decreased amount of PAYG instalment prior to the commencement of this bill there will be a catch-up payment of the decreased amount in the quarter that ends after the commencement of this bill. The government intends to undertake consultation on a more appropriate method of addressing the interactions between the PAYG instalment system and the TOFA Act on an ongoing basis.

The government is committed to the ongoing monitoring of the implementation of the taxation of financial arrangements reforms. The changes in schedule 2 address an unintended consequence arising out of the changes the TOFA reforms made to the PAYG instalment system. It is the intention of the government to develop a more appropriate method of dealing with the interactions between PAYG instalment systems and the TOFA Act.

Schedule 3 of the bill concerns the Helping Children with Autism package. Schedule 3 exempts from income tax the outer regional and remote payments made under the Helping Children with Autism package. This payment is designed to assist families with children who have been diagnosed with autism spectrum disorder and living in outer regional and remote areas to access early intervention and educational services. Exempting this payment from tax reflects the added difficulties that could be faced by families living in regional or rural areas in gaining access to these types of services. The exemption provides the recipients of this payment with certainty as to the tax status of those payments.

Schedule 4 exempts from income tax those payments made under the Continence Aids Payment Scheme. This scheme replaces the existing scheme which provides subsidised products direct to eligible recipients. The replacement of the direct provision of the products with a payment allows eligible recipients greater freedom in their choice of products and suppliers. Providing an income tax exemption for the receipt of this payment will ensure that no recipients are disadvantaged under the new scheme.

Schedule 5 covers exempting Commonwealth government securities from interest withholding tax. This proposal will make debt issued by the Commonwealth, including debt issued by the Australian Office of Financial Management and other Commonwealth authorities, such as Australia Post, eligible for exemption from interest withholding tax. This policy will improve neutrality in the tax system by providing Commonwealth debt, state debt and private sector debt with the same interest withholding tax treatment. It will also bring Australia’s tax treatment of Commonwealth government securities into line with most other countries, including the United States and the United Kingdom.

Foreign investors investing in AAA-rated sovereign bonds currently have a choice between purchasing AAA-rated IWT-exempt bonds, such as those from the US, Germany, United Kingdom and state governments, or purchasing AAA-rated Australian government bonds and potentially paying IWT. This places Australian government bonds issuance at a competitive disadvantage in the international market and potentially results in the Australian government bonds being issued at a higher yield than would be the case were an IWT exemption available. It is expected that making Commonwealth government securities eligible for the current general IWT exemption will increase demand for Commonwealth government securities from overseas investors who have previously been deterred by the tax. The taxation changes will have a net cost of $52.4 million across the forward estimates.

Finally, schedule 6 of this act addresses the 2009 Victorian Bushfire Appeal trust account. These amendments provide the Victorian Bushfire Appeal Fund independent advisory panel with greater scope to support communities affected by the 2009 Victorian bushfires. The panel oversees the expenditure of funds in the 2009 Victorian Bushfire Appeal trust account. The amendments permit funds in the appeal fund to be used for a broader range of purposes than the law would consider charitable, without jeopardising the charitable status of that charity that collects donations.

The amendments ensure that any funds transferred from the Red Cross to the appeal fund, which is not itself a charitable fund or institution, will be disregarded in considering the Red Cross’ status as a charitable institution and a public benevolence institution so long as the funds are used for the allowable purposes. The allowable purposes for which the funds may be expended are restricted to provide assurance to donors that their charitable donations will be used appropriately.

There are a number of allowable purposes but broadly they fit into three categories: Australian disaster relief fund purposes, public benefit purposes and other allowable purposes. Any purpose that is currently allowable under the general deductible gift recipient category of the Australian disaster relief fund will continue to be an allowable purpose. An allowable public benefit purpose would be a purpose to provide broad public benefits that are consistent with the purposes of one or more income tax-exempt entities, widely and publicly accessible, and provide commercial or private benefits only to an incidental and ancillary extent, if at all.

‘Public benefit’ means the organisation must have a purpose aimed at achieving a universal or common good and that its benefits are accessible and directed to the general community. There are a number of categories of entity which are made income tax exempt in tax law, generally in recognition of their value to the community. These categories include, amongst others, charitable institutions, community service organisations, cultural organisations, health organisations, sporting organisations and local government bodies. To be consistent with the purpose of an income tax exempt entity, the funds must be used for activities that would be undertaken by an income tax exempt entity. This is a wide category of newly permissible purposes for the panel and includes rebuilding or establishing community centres, youth centres, halls or libraries and other similar purposes which meet the requirements of a public benefit purpose. They are very important in helping to rebuild these communities.

Other allowable purposes include: the provision, without any requirement for annual assessments, of long-term assistance to orphaned minors; reimbursement of individuals or organisations who have paid for either Australian disaster relief fund activities or public benefit activities to be performed; provision of support to individuals who, because of the bushfires, have lived or are living in transitional housing—grants of up to $15,000 per household may be provided; assistance to individuals who are primary producers—the amendment allows the appeal fund to make grants of up to $10,000 to primary producers, which are open to be used for repair and restoration of farm activities, including re-fencing properties; and provision of assistance to families whose owner-occupied principal residence has been destroyed or damaged, ignoring the legal ownership structure of the residents—this has relevance to individuals who may use company or trust structures to own their residence.

Recognising the truly unprecedented circumstances of the 2009 Victorian bushfires, the government is implementing legislative changes that widen the permitted use of donations by the fund. These amendments will give the Victorian Bushfire Appeal Fund Independent Advisory Panel extra flexibility to support bushfire affected communities as they recover and rebuild. This decision follows a significant amount of support from the Rudd government over the past six months. This includes appointing a Parliamentary Secretary for Victorian Bushfire Construction—Mr Shorten, the member for Maribyrnong—to spearhead reconstruction efforts and providing a range of financial and other assistance to individuals, families, businesses and communities affected by these fires. As you can see, the amendments in this bill cover a broad range of issues, all of which make our tax system a fairer one. I commend the bill to the House.

12:12 pm

Photo of Darren ChesterDarren Chester (Gippsland, National Party) Share this | | Hansard source

I rise to speak on the Tax Laws Amendment (2009 Measures No. 5) Bill 2009. Without wishing to diminish the other schedules, which were so eloquently covered by the member for Dobell, I join the debate to mainly focus on two areas of particular concern to my community, being those issues dealing with the Helping Children with Autism package and schedule 6, which relates to the Victorian Bushfire Appeal Fund.

As the Parliamentary Secretary for Disabilities and Children’s Services and Parliamentary Secretary for Victorian Bushfire Reconstruction noted in his second reading speech, schedule 3 exempts from income tax the outer regional and remote payment made under the Helping Children with Autism package. This payment is made to assist families with children who have been diagnosed with Autism Spectrum Disorder and who live in outer regional and remote areas to access otherwise scarce early intervention and education services. The amount of that allowance is $2,000, and I will discuss that more fully later in my contribution.

Schedule 6 provides greater scope for the Victorian Bushfire Appeal Fund Independent Advisory Panel to support the communities affected by the 2009 Victorian bushfires. In relation to the bushfires and the broader discussion, this is an opportunity for me to update the House on the recovery initiatives that are underway in Gippsland and to report some progress. It is now almost eight months since that tragic event. To begin with, I want to again put on record my absolute respect and admiration for the emergency services workers and all the volunteers who have rallied together so magnificently, not only in Gippsland but right across the state of Victoria. If there has been a single positive aspect to have arisen from this tragedy, it is the way it has united my community. The test that was put to the people of Gippsland was quite extraordinary, but the resilience they have demonstrated in the last eight months is something to behold and something I am very proud of as the member for that region.

We lost 11 lives in Gippsland at the height of the fires on Black Saturday and more than 250 homes in the 10 days where fires scorched across the communities of Ballara, Yallah, Callignee, Traralgon South through to Cornella and right through to Devon North. It was a very traumatic event and a tragedy on a scale that I hope none of us see again in our lifetime. There are probably people in the gallery here today who were affected by the Canberra bushfires, and they would probably understand the extent of the trauma that the people of Gippsland have gone through. In the immediate aftermath people have dealt with their losses. There was a certain degree of shock in our community, which is entirely understandable. But what has been on display, as I mentioned before, is the overwhelming support and the outpouring of generosity from people right across Australia. Everyone wanted to do their bit.

It was quite extraordinary to go to a place like the Traralgon South recovery centre and see trucks pull up, full of goods, the sorts of goods that you do not think of automatically—things like work boots and overalls for the men wanting to get back on to their blocks and start cleaning up; fencing and repair material donated by major agricultural companies; and cosmetic and medicinal supplies from some of Australia’s major providers, such as pamper packs for the ladies and those who had lost everything. So it was an incredible experience to be there in those early days and to see the outpouring of support that came from people right throughout Australia—from the corporate sector, from the voluntary sector and from individuals keen to do their bit.

We were very fortunate in Gippsland to be served by the Gippsland Emergency Relief Fund. It went quickly into action. It secured several million dollars worth of donations from the immediate local community and was handing out cheques to people from day 1. I commend the Gippsland Emergency Relief Fund for being able to dispense aid so quickly and when people needed it. Keep in mind that people were turning up to the relief and recovery centres with absolutely no form of identification, just with the clothes on their backs. To turn up and to have someone give them a cheque so they could go and buy some new clothes was something that they certainly appreciated.

The broader appeal effort, which this amendment deals with, raised $375 million. That is testament to the care and compassion of the Australian public. We hear a lot of negative stories in the media, but I think we should focus on this incredible performance by the Australian public. I am well aware of many school groups who held casual days, for example, or kids who held garage sales to raise money. They made donations of $10, $20, $50 or $100; and every little bit helped. I commend the Victorian Bushfire Appeal coordinators and Governor John Landy. The project is now chaired by Pat McNamara, a former leader in the Victorian state parliament. I commend them on the work they have done. It has been difficult for them to work through the parameters of the task before them.

One of the perhaps disturbing aspects of this issue, and the reason why I have taken this opportunity to speak today, is that there may be a sense in the broader community that the recovery has finished now—that we can all move on now that the media interest has died down and now that the bushfires are not on the front pages of the newspapers anymore—a sense that the communities of Gippsland, and the broader community of Victoria, affected by these fires have been fixed and it is all done and dusted. That is certainly not the case. We were very appreciative of the visits by the Prime Minister, the Parliamentary Secretary for Bushfire Reconstruction and several other ministers. They made the time to come to Gippsland and to carefully assess the local needs on the ground. I urge them, if they have been to Gippsland in the past, to return in the future. They would certainly be welcomed by the community. There is a sense for some in the community that they have now been forgotten. It does not need to be a rational view; it can be just an emotional reaction to the fact that they have been on the ground now for eight months trying to rebuild their lives.

So it would do well for other members in this place to consider what opportunities they may have in the execution of their parliamentary duties to look for ways that they can get back into those communities. I am talking about not just Gippsland but also the broader bushfire affected communities as they recover from what has been, as I said, an incredibly traumatic experience. As time has gone by there is no question that the media interest has dropped and the visits from people outside the region have dropped. I get the sense now that the community is ready for more support in the sense of just knowing that people still care about them.

There have been some exceptions to that rule about interest dropping. The local media has been very focused on the recovery effort, and I commend the journalists in our area for their efforts in that regard. The ABC statewide radio program Drive is hosted by Kathy Bedford, a good friend and colleague of mine who has gone out of her way to try to keep in touch with the fire affected communities and make sure her listeners, right around regional Victoria, understand that they need to be there for these people for the long haul, because recovery is very much a long haul. People recover at very different rates. Some people seem quite remarkable as their resilience is incredible and they seemed to have bounced back very quickly. They have taken on enormous burdens in their communities and got on with the job of helping others and helping their own families. As for others, we are talking about six to eight months down the track and sometimes there have been delays in getting permits to start building and family breakdowns as a direct result of the fires because some people simply cannot go back to those communities; they do not want to move back and rebuild in the same location when their partner might think it is a very good idea to move back. That level of social disconnection or breakdown is a real issue that we are dealing with in Gippsland at the moment.

I have said many times in Gippsland that this will be a defining moment in our community and the lives of so many people. They will define their lives as to what they did before Black Saturday and what they did after Black Saturday. It will be a turning point for a lot of people. I am concerned for our young people in particular, that we have not always been fully cognisant of their needs given that they were very much at the firefront and were directly affected. I give credit to an organisation called Relationships Australia, which has gone out of its way in the past two weeks to hold an adolescents recovery day. Several hundred young teenagers came together for the day to enjoy some music and sit around with their mates in a relaxing environment. It is typical of the vagaries of the Gippsland climate that on that day rain poured down and washed out some of the events, a day when we were to there to reflect on a day when a 46-degree temperature scorched the area. So we had two inches of rain on a day when we would have preferred to be outside enjoying some of the other activities that were organised. Young people received some important messages that day to make sure they realised that they can seek help, that seeking help does not make you any less of a man or a woman if you are not dealing well with the trauma of the events that you have experienced and need to go out and get professional advice, and that it is okay to admit things are not necessarily going that well. I congratulate Relationships Australia for helping to build that bridge for our young people, so making them realise they have not been forgotten.

Obviously, the long haul of recovery also relates to the environment. The damage that has been done to the Victorian bush has been quite significant. If you travel through the bushfire affected areas now, you note the vegetation is starting to re-establish itself and it is greening up again. The large mammals one used to see are not there yet in any numbers, if at all. It is a long haul, and I give credit to the federal Minister for Agriculture, Fisheries and Forestry—and we have our clashes from time to time on a whole range of issues—for coming down to Gippsland and taking the time to see how the bushfires affected my community and also for making sure that additional Landcare funding is made available for the practical environmental work that is going to be required in the months ahead.

As I have mentioned before, there was very much a bipartisan spirit in the early days after the bushfires. The Prime Minister visited the area, as did the minister for agriculture. I had a chance to take the minister around to see the infrastructure work that is required, and the infrastructure upgrades are also going to take a fair bit of time to complete. That is why I am particularly pleased by the changes that have been made in terms of the tax treatment of the bushfire relief appeal fund. One issue that seemed to slip through the cracks in the early days was primary producers’ need to repair and restore their on-farm equipment and activities, in particular fencing. We had hundreds of kilometres of fencing destroyed in Gippsland. I have seen the figures but they have escaped from my memory at the moment. I know there were thousands of kilometres of fencing destroyed across Victoria. Inevitably, in this area we are going to have future disasters, whether they be fires or floods, and we are going to lose fencing again. It almost seems as if it is going to be inevitable that we are going to again have this fight about what support is going to be made available to our primary producers when they are faced with such an enormous cost burden. We have a situation, one that needs to change, at a state level whereby where properties adjoin public land the state government does not assist with the replacement of fences. I think that is an issue that the state government needs to take on board coming out of this enormous tragedy across Victoria.

The bill before the House follows some pretty practical, common-sense discussions that were had with the Prime Minister’s office, with the parliamentary secretary’s office and also with the members for McMillan and McEwen. It ensures that our primary producers do have access to some of the funding. I think the Australian public is quite comfortable with that. The funding in the initial stages went to people who lost their primary place of residence, who had major loss of property. But, given the magnitude of the fund—$375 million—I understand that the recovery fund committee have not been able to spend all the money at this stage. So it is quite reasonable to look at other options. I give credit to the government for moving in this regard.

In particular, changes provided for in the bill will allow the fund to provide long-term assistance to orphaned minors. I am not sure of the exact numbers, but I have read of many cases where young people have lost both their parents. It also provides reimbursements to individuals or organisations that have performed eligible charitable activities and it makes the discretionary payments I referred to before. The bill is certainly going to be well received by the people of Gippsland. It is a small but welcome step in recognition of the need for additional support as we go forward. I encourage all members and those of the general public who may be listening today to recognise that the recovery is ongoing. It has been an extraordinarily difficult and complex process. We are going to need continued support for communities and the people in them for many years to come.

I also want to refer to schedule 3 of the bill, which exempts from the income tax declarations the regional and remote payments made under the Helping Children with Autism package. Again, this is an important initiative and I commend the Parliamentary Secretary for Disabilities and Children’s Services for taking it. We have an issue in our regional communities in particular. We need to make sure we are doing a hell of a lot more to provide decent levels of support and assistance to people with autism and their families. When the autism diagnosis comes, people liken it to a time bomb. When it goes off, when the diagnosis is made, mums and dads return home and wonder what they do next. There is a lack of support services in regional communities. I have written to the minister on this in the past, and I understand he is working in that regard. This is a very positive step towards ensuring that people in rural and regional communities have reasonable access to services in the future.

Our carers are on the front line when it comes to providing a service for our nation. It is the toughest gig in town. Dealing with a child with special needs, whether it be autism or some other special need, is exhausting. The parents are often confused by the layers of bureaucracy they need to go through to access services. It can be very difficult for them to keep their family unit together while they are dealing with so many other emotionally draining issues. I have met with several families in my electorate who have had the diagnosis of autism. The experience follows a very similar pattern. There is a need for allied health services in the first place, but there is also a need for respite care. Families want to work their way through the system by using a one-stop shop approach.

There is one program that has been very successful in the Bairnsdale community which I have written to the minister about. I congratulated him on the funding for it. That is the MyTime program. It provides a helper for up to eight children at one time to allow the parents to get together in a room and discuss their different ideas and the ways they are coping with a child with autism. Parents who have spoken to me are seeking the establishment of a one-stop shop which really helps them to identify support services and tells them where and how they can access them. I congratulate the minister for his interest in the issue. I also encourage him to continue to lobby hard for additional support services.

Some of the concerns raised by people in Gippsland link into the government’s new package of $12,000 over two years for children with autism spectrum disorder. It is a good package, but there are some concerns within my community in relation to how people can actually access the services and whether they are available to them. I have spoken to families about this, and the information they have given to me is that early intervention is critical when it comes to autism. It is those first few years where you can make a real difference in helping young people achieve their absolute best later in life.

There have been various international studies which have found that a young child with autism should have access to, for example, at least 12 hours of therapy per week, be it occupational therapy, behavioural therapy or speech therapy. But the package the government has implemented of $6,000 per year equates to about one hour per week. I know the families do not wish to appear ungrateful for that package, but it falls a long way short of where we need to go in the longer term. Low-income families and people from low socioeconomic areas have a great deal of difficulty in topping up the support services. It is only natural that parents want to get the absolute best for their children, but if you are a full-time carer obviously it can be difficult to earn the income to access the extra support services which are needed. I do commend the government for the autism support package which is available but I acknowledge that there is a long way to go in providing the services which meet the needs of our community.

Another problem with the package at the moment is that you must be an authorised provider to have the $6,000 spent on your service. In the early days, there certainly were not any authorised service providers in my region; that is about to change in Bairnsdale, I understand. In other regions where approved service providers are not available, it is still going to be a problem for the government, going forward. That is where the $2,000 allowance for remote and regional access fits into this package, but it is a real issue for children with autism in particular to be travelling long distances to access services. The children themselves do not travel that well in a large number of cases and it just adds another stress and layer of complexity for the families involved. So the $2,000 certainly helps, but we do have a long way to go in providing access to those types of services within the regional communities themselves.

I had the opportunity to speak to a paediatrician in Sale during the week who does a great job supporting children with autism. I think he has 150 children with autism on his books at the moment. He is comfortable with the package in that regard, but he does make the point that we do need to be investing more in our own young people in regional communities to make sure that we actually have those allied health services available in country communities in the future. Taking our young people with autism to Melbourne to access the services to use this funding is not an adequate solution for us. In the longer term, it simply will not change until more rural students are given preferential treatment to enter university courses and then given the opportunity to move back to regional communities to practise after the completion of their studies.

I thank the House for this opportunity to provide an update on the bushfire recovery efforts in Gippsland and also on the autism package. I commend the bill to the House.

12:32 pm

Photo of David BradburyDavid Bradbury (Lindsay, Australian Labor Party) Share this | | Hansard source

In following the member for Gippsland, I acknowledge his very strong advocacy for the constituents of his electorate. I acknowledge the representation that he has given them through what has been a very difficult period, having faced the bushfires earlier this year and the great challenge of reconstruction that has followed. I will speak more specifically about that in relation to schedule 6 of the Tax Laws Amendment (2009 Measures No. 5) Bill 2009 later on. I do not intend to speak on each of the schedules of the bill, but I will be speaking on schedules 1, 3, 4, 5 and 6.

Beginning with schedule 1, the proposals that have been brought forward in relation to the GST and representatives of incapacitated entities, I note that these are amendments that have been precipitated by a Federal Court decision which determined a matter in such a way as to render the outcome contradictory to what was the stated intention of the GST legislation when it was first introduced. That legislative intention is given effect by the comments that were made in the explanatory memorandum at the time.

It is a timely reminder of the importance of ensuring that, while an explanatory memorandum can play an important role in providing some additional context and some additional guidance as to the intention of the legislation, it never takes on the force of law in its own right. This is something that draftspeople have to be eternally vigilant about, and this particular case does highlight some of the difficulties—where the messages being sent out in the explanatory memorandum can, in fact, be contradictory to the letter of the law contained within the act itself.

In relation to the judgement that has given rise to these particular amendments, that was the case involving PM Developments and the Deputy Commissioner of Taxation. I note that in handing down the judgement Justice Logan was critical of the explanatory memorandum to the goods and services tax act. The explanatory memorandum stated, at paragraph 6.271, if you are registered and you become bankrupt, or go into receivership or liquidation, the person who conducts your enterprise on your behalf is, generally, personally carrying on the enterprise.

In addressing that part of the explanatory memorandum, Justice Logan said:

The statement in para 6.271 of the explanatory memorandum as to who carries on an enterprise after bankruptcy, receivership or liquidation is true only of bankruptcy. It is not true of corporations who are placed in liquidation. Neither is it true of a privately appointed receiver.

He then goes on to say:

Such errors hardly, with respect, inspire confidence in the utility of the explanatory memorandum. The description in the explanatory memorandum is not matched by the language employed within Div I47 as enacted.

That serves to amplify the point that the use or the utility, the benefit, of the explanatory memorandum and the guidance that it purports to provide to taxpayers, to advisers and ultimately to courts, is only useful to the extent that it is not seek to derogate from—or undermine or contradict—the written word of the act itself. I think that, whilst this particular set of amendments does seek to restore what may have been generally understood to have been the position, as I indicated earlier, I think it does serve as a useful reminder of the importance of maintaining complete and utter care in the way in which an explanatory memorandum is drafted, because of the particular significance these documents can take in guiding those—particularly in the tax field—in advising clients and ensuring that taxpayers understand their obligations and are able to set about diligently trying to observe them.

That is the only comment I wish to make in relation to schedule 1 but I support the proposals. In relation to schedules 3 and 4, I want to offer a few general comments. In relation to schedule 3—the Helping Children with Autism package—whilst I note that this particular schedule exempts from income-tax those payments made under the outer regional and remote payment, I do acknowledge that the package is one that has delivered considerable benefits to families and communities right around the country. I know that it has been very well received in my local community. Autism presents a great challenge, in particular to the families of children who are given a diagnosis. The Helping Children with Autism package is principally designed to provide that assistance, so that early intervention services can be obtained and secured. The research is very clear that early intervention services can have a profound impact on the outcomes in terms of the extent to which the child might improve their functioning within the community.

It is important that we continue to invest in providing support to families who—I must say, in my community—have limited access to the services they need. Notwithstanding those limitations, one of the largest limitations is the capacity to access those services financially, whether it be for speech therapists occupational therapists or for music therapy.

There is a particular issue with music therapy because within my electorate the Nordoff-Robins Foundation has provided considerable funding over the years for the Golden Stave Music Therapy Centre, which is located at the Kingswood campus of the University of Western Sydney. The music therapy that is provided—not just to children but teenagers and adults more generally, even some elderly people—can play a very important role in providing some of the therapeutic components to the overall strategy that one might employ in trying to assist a person with autism. Unfortunately, some of those services traditionally have not been of the type of service that would be considered as being eligible to be funded under these sorts of packages. That is something that I would like to see further work done on for people who are accessing those services, and ensuring that some of those music therapy services are in fact delivering benefits that are just as great as an occupational therapist or a speech therapist for a child that has autism.

Recently I had the opportunity in my electorate to support a very worthy cause that I have mentioned before in this place, and that is the Luke Priddis Foundation. It was established to provide services and assistance to families that have children with autism. Just a couple of weeks ago I attended their annual fundraising event at St Marys Leagues Club. It was a trivia night and I am pleased to report to the House that my table came second by a quarter of a point—it was one of those four-point answers that brought us undone in the end. It was a great night, not just because of the entertainment and the fun that was to be had on the evening, but because of the money that was raised for a very good cause. I do wish to acknowledge Luke and Holly Priddis and the entire team at the Luke Priddis Foundation for the great work that they do—not just in raising funds but most significantly in raising the profile of autism and the need for autism-specific services in Western Sydney. I take my hat off to the Luke Priddis Foundation. I wish to thank them for a good night and for the great work that they do within our community.

On the night Emma Husar, a local mother—her son Mitch is autistic—was able to speak to those who were in attendance about the particular challenges that she has faced as a parent of a child with autism. For those of us who are parents, I think we all look at the great job done by parents who find themselves in very difficult and trying circumstances. We look at the great job that they do with utter respect and a great deal of admiration, and I wish to express that here today.

This particular measure obviously ensures that there is a relevant tax exemption for those payments made under that payment. In relation to the Continence Aids Payments Scheme, I note that this particular proposal has arisen as a result of some of the changes that have occurred to the administration of the scheme—the CAAS scheme, the continence aids assistance scheme, is what it was previously known as. The changes that have been brought about ensure that now there is more choice in the hands of the recipient of a payment to go out and to source the particular product. The way in which the scheme has been structured means there are payments being made to recipients, to individuals, and this provision is largely to ensure that there are no adverse income tax consequences that flow from those payments. Frankly, it would put people at a disadvantage if they were now paying income tax or those payments were treated as being assessable in their hands when under the previous system there were no such taxation implications.

I take this opportunity to acknowledge the very good work in my community of the Nepean Social Club, which is a club that was established under the leadership of Kevin Finlayson, a great local identity. Kevin is in a wheelchair but he is someone who has been driving many a process in the advancement of the interests of people with disabilities in my local community over many years. He was awarded the coveted Wall of Achievement Award by the Penrith City Council some years ago. Kevin was the driving force behind establishing the Nepean Social Club. This issue under schedule 5, along with a range of other issues affecting people with disabilities, is one that he has brought to my personal attention, so I wish to acknowledge his advocacy. I know that he is a great leader within my local community and will continue to speak out and advocate on behalf of the members of his club but also, more generally, people with disabilities.

The next schedule, schedule 5, deals with exempting Commonwealth government securities from interest withholding tax. This is an eminently sensible proposal and I note that it has bipartisan support. This is a change that has largely been necessitated by the succession of changes that have occurred in relation to the removal of interest withholding tax on corporate bonds which occurred back in 1999 and, more recently, on state government securities in 2008. This measure is principally about neutrality, ensuring that bonds of a similar type are treated similarly for taxation purposes. The main effect of the interest withholding tax provisions goes to the competitiveness of bonds that are issued by the Commonwealth government. Foreign investors with an appetite for investing in triple-A rated sovereign bonds currently have a choice between purchasing those triple-A rated interest withholding tax exempt bonds from other countries or indeed, within Australia, other jurisdictions, and acquiring those securities from the Commonwealth where, under the current law, there is no such exemption from the imposition of interest withholding tax.

This is a levelling of the playing field in that respect. It is a very sensible move, one that has some financial implications. It is estimated that the net cost of this measure will be $52.4 million across the forward estimates. However, it is important to note that a large part of that will be offset by the increased demand that the removal of interest withholding tax from Commonwealth government securities will generate in that particular investment space. It is a proposal that I wholeheartedly support.

Schedule 6 is concerned with the response by the Australian community and the Australian government to the Victorian bushfires earlier this year. The member for Gippsland spoke very genuinely, very passionately and very sincerely about the impact that those fires had on his community and also the impact of the response that came from the rest of Australia to help his local community try and rebuild.

These amendments are largely directed towards ensuring that the widely held view within the community, and I think a view that has a very reasonable basis, is upheld. That view is that not only should the contributions that people made to the Red Cross in the first instance, at a time of national emergency and for which as individuals they received a tax deduction—and it is widely accepted in this country that donations of this sort should be tax deductible—be tax deductible but the way in which the mechanical transfer of those funds has occurred from the Red Cross to the appeal fund of which the Victorian government is the trustee should not in any way jeopardise the ongoing availability of the charitable status of the Red Cross.

The government and the parliament have acted to ensure that the appeal fund is a deductible gift recipient. These amendments largely go to the more broad issue of the expenditure of those funds. Whilst there might be a need to extend beyond the limits of the existing provisions of the tax law to ensure that some of the items of expenditure that this bill proposes would be allowed to occur without jeopardising the charitable status of the entities involved, I think it is entirely reasonable to conclude that those expenditures are completely in line with what not only the donors, being the rest of the Australian community, expect but also what the Australian government considers to be fair and reasonable. In acting on this particular proposal, the parliament will support that initiative and enshrine that in law.

I am inspired by the fund-raising efforts that have contributed to the relief fund. In the order of $386 million has been raised, 18,324 payments have been made to individuals affected by bushfires, three-quarters of the fund will be paid out to individuals and families, and approximately $95 million will be distributed to community projects in bushfire affected areas. On the one hand this has been a huge fund-raising exercise where the generosity of Australians all around this country has been on display, but it is now about ensuring that their generosity is able to be tapped into for the longer term reconstruction and benefit of the communities that are affected.

In closing I take this opportunity to acknowledge the Caring Hearts Community Quilters in my electorate who, through their own labour, provided a number of quilts to individuals that were affected by the bushfires. They did a great job. They are a wonderful bunch of ladies. I visited them recently and I know they will continue to do good work in our community. (Time expired)

Debate (on motion by Ms George) adjourned.

Sitting suspended from 12.52 pm to 4.03 pm