Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Link to this | Hansard source

The coalition will not be opposing the Tax Laws Amendment (2011 Measures No. 2) Bill. Like all tax law amendment bills, this makes a number of changes to the tax law and the administration of tax. It does so in this case through five schedules, all essentially unrelated. I will run through each of them briefly. Schedule 1 adds some deductible gift recipients to the existing schedule—namely, the Charlie Perkins Trust for children and students and the Roberta Sykes Indigenous Education Foundation. It adds those to the relevant list allowing donations over $2 to be tax deductible and thereby encouraging public support for charitable activities.

The second schedule deals with some changes with respect to self-managed superannuation funds. The provision in this schedule will allow the government, through regulation, to impose rules on self-managed superannuation fund investments in personal use assets, such as collectables and artworks amongst a number of other things identified. Members would be aware that the sole purpose test of the relevant superannuation act requires that assets of a superannuation fund be held for the sole purpose of generating retirement income. The recent Cooper Review, the review of the entire superannuation system, recommended that self-managed superannuation funds be prohibited from investing in personal use assets and that those assets, to the extent that they existed within those funds, should be disposed of within five years. The review found that personal use assets lent themselves to personal enjoyment and therefore failed that sole purpose test that I just outlined. The government announced back in July last year that it did not support those conclusions of the Cooper review but said that it would tighten the requirements around personal use assets rather than take up the recommendation to prohibit them. That is what this schedule seeks to do—to provide the government with the power of regulation to impose rules relating to investment of personal use assets by self-managed superannuation funds.

The Assistant Treasurer, the member for Maribyrnong, outlined in his second reading speech back on 24 March the government's intentions in this regard when he said that the amendments would allow regulations to make rules relating to how self-managed superannuation fund trustees make, hold and realise investments in collectables and personal use assets. He said that the purpose of the rules would be to ensure that these investments are made for retirement income purposes and not for current day benefit. He further advised that the content of those regulations is being developed in consultation with the industry. We believe that this reflects a sensible balance. We understand that it is supported by the Self-Managed Super Fund Professionals Association of Australia.

The third schedule deals with tax file numbers with respect to locating superannuation accounts in order to facilitate consolidation of those accounts. It allows super fund trustees and retirement savings account holders to use tax file numbers to locate accounts and facilitate consolidation of multiple accounts. At the present point in time, there are some restrictions on the ways that super funds can use tax file numbers. In particular, they are not permitted to use tax file numbers to locate accounts for the purposes of the very consolidation that this schedule deals with. This will not replace account or membership numbers, but will simply remove the requirement that super funds use other methods for searching for multiple funds before using tax file numbers. Apparently, individuals can still choose not to give their tax file number. There are not changes to the consequences for failing to do so. We agree on this side of the House that it is important to maximise individual retirement savings and for small accounts to be consolidated as easily and as quickly as possible.

The fourth schedule deals with the goods and services tax and specifically the issue of the determination of Australian taxes, fees and charges with respect to the goods and services tax. Currently, the federal Treasurer determines by legislative instrument those Australian taxes, fees and charges that are not regarded as consideration for a taxable supply and therefore not subject to GST. That determination is an administrative process involving the Ministerial Council for Federal Financial Relations and the formal agreement of state and territory treasurers. The instrument is updated twice yearly and over the now more than 10 years of the operation of the goods and services tax it has grown, I am advised, to over 600 pages. The government's view is that this is becoming a significant administrative burden on all levels of government. The amendment means that the default position will be that Australian taxes, fees and charges are not subject to GST and therefore will not need to be listed. Regulation may be made to treat the payment of an Australian tax, fee or charge as consideration for supply and therefore as subject to the goods and services tax. On the subject of goods and services tax, my friend opposite would think it remiss of me not to remind the House that I always welcome in tax law amendment bills schedules that consolidate and protect the goods and services tax which this side of the House fought so hard to implement and those opposite fought so hard to prevent coming into existence. Now that they are in government, perhaps they realise the errors of their ways, and it is good to see them preserving and protecting the goods and services tax which their former leader and former Prime Minister said on the day of its introduction would be marked down 100 years from now as 'a day of fundamental injustice'. I had been unfair in the past that no-one would remember Fundamental Injustice Day declared by the member for Griffith back in 1999, when the legislation for the goods and services tax passed through the House. I think in the years from now he will remember Fundamental Injustice Day, but it will not be the day that the goods and services tax passed through the House; it will be 24 June 2010.

Schedule 5, the final schedule, as is often the case with these tax law amendment bills, simply makes a range of corrections, additions and the sorts of changes and improvements you would expect to see in taxation law. We do not oppose this bill, and I commend it to the House.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

It is always good to hear members of the opposition talking about their past record as the highest taxing government in Australia's history, and it is great that the member for Casey took the opportunity to remind us again. He should not be so modest, though: it was not one year that they were the highest taxing government in history; they held the record for four years in a row. It is a terrific record, and we love the way you always come out to remind the Australian public. We love the way that you remind them that your government was the highest taxing government in Australia's history and it has been this government that has gone about reforming tax to make sure that ordinary Australians are not slugged to the extent that they were when those on the other side had the Treasury benches.

I am not sure that I would necessarily be making the boast about being the highest taxing government in history, but that is something the member for Casey obviously likes to remind us about on many occasions—and I encourage him to continue to remind us about the former government's record in relation to tax!

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

My pensioners remind me.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

As the member for Parramatta points out, we are constantly reminded by our constituents, particularly those on fixed incomes or those on pensions, of the high-taxing history of the former government.

I rise to support the Tax Laws Amendment (2011 Measures No. 2) Bill 2011. It has a number of schedules, and I will go through each of those schedules to look at what they are actually proposing. The first schedule is about deductible gift recipients. Under the current law taxpayers can claim income tax deductions for certain gifts to organisations with DGR status. Division 30 of the Income Tax Assessment Act 1997 sets out the requirements for organisations to be granted DGR status. Organisations must either fit one of the general categories of DGR or be specifically listed under these provisions. This schedule lists the Charlie Perkins Trust for Children and Students and the Roberta Sykes Indigenous Education Foundation. It also changes the name of one deductible gift recipient from Guides Australia Inc. to Girl Guides Australia.

The Charlie Perkins Trust was established in late 2002 in memory of the late Dr Charles Perkins AO. The trust's aim is to advance the education of Aboriginal and Torres Strait Islanders through the provision of scholarships to Indigenous persons for study at overseas institutions such as Oxford and Cambridge University. The Roberta Sykes Indigenous Education Foundation was established in 1990 and works to advance the education and life opportunities for Aboriginal and Torres Strait Islanders and provide additional assistance, such as assisting with the cost of relocating families and partners, to female Indigenous scholars undertaking programs overseas. Listing the Charlie Perkins Trust for Children and Students and the Roberta Sykes Indigenous Education Foundation means that the organisations will be in a significantly better position to attract private and corporate donors, and to raise funds for their ongoing work supporting Indigenous Australians to undertake higher education at prestigious overseas universities such as Oxford, Cambridge and Harvard.

Schedule 2 is in relation to self-managed superannuation fund investments in collectables and personal use assets. This measure will allow implementation of the government's election commitment to tighten legislative restrictions on self-managed superannuation funds, investments and collectables and personal use assets. The Super System Review recommended that SMSF investments in collectables and personal use assets should be prohibited because these assets lend themselves to personal enjoyment and therefore can involve current day benefits being derived by those using or accessing these assets. This recommendation was restricted to SMSF investments because of the closely held nature of SMSFs, where members have direct control over the investment of their retirement savings.

In response to criticisms of the recommendation by SMSF and art industry representatives, the government rejected this recommendation in recognition that collectables can be legitimate investments for some SMSF trustees. However, the government also announced that it would tighten the legislative standards applying to SMSF investment in collectables and personal use assets to ensure that such investments do not give rise to current day benefits for SMSF trustees. The legislative standards that will apply to SMSF investment in collectables and personal use assets are being developed in consultation with the industry, and will be set out in regulations. These measures will enable those regulations to be made. This measure also removes a reference to the provision that was repealed on 24 September 2007.

These amendments will allow implementation of the government's election promise to tighten legislative restrictions on self-managed superannuation fund investments in collectables and personal use assets to ensure that they do not give rise to current day benefits. It will give authority for regulations to make rules in relation to how these investments are made, held and realised. It will also give the regulations authority to impose a penalty of not more than 10 penalty units for contraventions of the regulations, and to provide for the transitional period of existing investments held prior to 1 July 2011. The regulations being developed in consultation with industry will be released for public consultation prior to being finalised. These amendments, as I have also said, remove reference to a provision that was repealed on 24 September 2007.

Schedule 3 relates to superannuation tax file number amendments. Schedule 3 makes a number of amendments which will improve the operation of the superannuation industry. It allows superannuation fund trustees and retirement savings account providers to use tax file numbers to locate members' accounts without first having to use other methods of identification, and will facilitate account consolidation. The new law will allow superannuation fund trustees and RSA providers to use tax file numbers to locate a member's account details. However, the law will not allow the fund to use tax file numbers to replace their existing account numbers. The aim of the law is to remove the impediment for funds to use other search methods before tax file numbers are used. It will not replace existing account identification methods, such as account or membership numbers. This ensures that the amendment operates in accordance with the National Privacy Principle 7: that tax file numbers should not become a national identifier. The amendments will also allow superannuation fund trustees and RSA providers to use tax file numbers to facilitate the consolidation of multi-accounts held by the same person in the same superannuation fund and across multiple superannuation funds, provided the requirements of the regulations are met.

These amendments will improve the administrative efficiency of the superannuation industry, and make it easier for superannuation fund trustees and retirement saving account providers to locate member accounts and to facilitate account consolidation. These amendments will be subject to appropriate privacy safeguards. In keeping with the current guidelines governing the use of tax file numbers, it will remain voluntary for individuals to provide their tax file number to their superannuation fund or to their RSA provider.

The measure is part of the government's package of stronger super reforms, which were announced on 16 December 2010. Allowing for the greater use of tax file numbers is the first of a number of initiatives from the package that will improve the administrative efficiency of the superannuation industry. Regulations will be enacted to support the use of tax file numbers and to facilitate the account consolidation process. This will include requirements for member consent and other procedures and processes that superannuation fund trustees and RSA providers must follow before consolidating accounts. These regulations will, again, be developed in consultation with the industry. Schedule 4 exempts Australian taxes, fees and charges from the goods and services tax. Currently, Australian taxes, fees and charges are exempt from GST by being listed in a determination made by the Treasurer under division 81 of the GST act and agreed to by the states and territories. The determination has grown to over 680 pages, and its compilation is a cumbersome and time-consuming process. The schedule will repeal and replace division 81 of the GST act to allow entities to self-assess the GST treatment of a payment of an Australian tax or an Australian fee or charge in accordance with certain principles. Under these amendments, government entities will no longer need to have an Australian tax or certain categories of Australian fees or charges listed on the determination in order for those taxes, fees or charges not to be subject to GST. The amendments will amend the GST law to replace the current mechanism for exempting Australian taxes, fees and charges with a legislative exemption with effect from 1 July 2011. Generally, the measure will provide the same outcome as the current mechanism but in a more efficient manner. This measure will provide increased certainty to taxpayers and government agencies in relation to the GST treatment of new taxes, fees and charges, as the tax treatment is not dependent on the item being listed in the determination. A legislative exemption will provide a more effective and transparent approach to exempting Australian taxes, fees and charges from the GST compared to the current exemption mechanism.

Schedule 5 relates to the 12-month export period for the GST-free supply of boats. The legislation provides that the supply of a new recreational boat will be GST free if the boat is exported from Australia within 12 months of delivery or certain other events in the case of payment by instalment. This is subject to certain conditions. There are two main sets of conditions: conditions relating to the nature of the boat—the boat must be a new recreational boat—and the boat must not be used in any form of disqualifying activity, with certain exemptions. Under the conditions for a new recreational boat, essentially the boat must be constructed in Australia; not be a substantially reconstructed boat; not used, sold or leased since completion, except in connection with the supply or acquisition of the boat as trading stock, or in connection with the particular supply or acquisition by the purchaser under consideration; be principally designed or fitted out for recreational purposes and not be a commercial boat. The first two conditions essentially ensure the boat is a new boat; the last two conditions ensure the boat is a recreational type boat. Under the disqualifying use conditions, the boat cannot be used as security for a loan except a loan to buy the boat itself. It cannot be used to carry on an enterprise in Australia. It cannot be used to carry on an enterprise outside Australia, except for private or domestic purposes or for a private recreational pursuit or hobby. The former exemption may embrace the latter exemption, which has been added out of caution.

Essentially, an overseas business may buy a new recreational boat in Australia and allow its employees to sail around Australia in the boat, or live in it while it is moored somewhere for 12 months and for consideration except where the employee of an overseas business is allowed to sail or live on the boat as above, or the boat is used to compete in a race or sporting event. Essentially, these conditions are designed to use the boat for commercial purposes or financial gain while in Australia. The actual supply of the boat by the supplier to the purchaser relates to the carrying on of an enterprise, but is not a disqualifying activity. The commissioner has the discretion to extend the 12-month export period as he does under the existing 60-day export period for a GST-free supply.

An exemption from disqualifying use has been provided to the use of the boat in a private capacity by the purchaser to participate in a racing or sporting event. This is in recognition that Australia is home to world-class sporting events including boats, such as yacht races and waterski events, and that participation in such events with a new boat built for Australian conditions could encourage some purchasers—in particular, foreign purchasers—to buy a new boat in Australia.

The measure was not implemented via a refund system, as proposed by several submissions, for administrative and legal reasons. A refund system would relieve the supplier of any further GST obligations after he paid the GST to the government. However, a mechanism was not available within existing resources to pay refunds of this nature. Further, these submissions suggested that a control permit be deemed to have been granted to the purchaser immediately after the boat was purchased and the supplier forwarded the GST. This would have been a necessary component for the use of a refund system to implement the measure. However, to grant and control permits in this way would have required more complex legislative changes than in this bill, and this would have delayed considerably legislation to implement the measure. Schedule 6 is in relation to other amendments. Schedule 6 makes various other amendments to the taxation laws. The amendments seek to ensure that taxation operates as intended by correcting technical or drafting defects. It is essentially a technical schedule.

While this may not be the most exciting piece of legislation, it is nonetheless an important piece of legislation. It is part of this government's ongoing reform in relation to taxation generally. It is part of making sure that business in Australia is simpler and more streamlined. For those reasons it is important that this legislation be supported. I commend the bill to the House.

Michelle Rowland (Greenway, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to speak in support of the Tax Laws Amendment (2011 Measures No. 2) Bill 2011. It is very satisfying to speak on bills such as this one because they reinforce some very responsive and progressive reforms that this government is pursuing. I thank the Assistant Treasurer and Minister for Financial Services and Superannuation for his commitment to creating a better future for all Australians. This bill demonstrates the commitment of the government to fulfilling its election promise of increasing the level of education for Indigenous Australians. This bill also takes steps towards fulfilling the government's election commitment to the creation of a stronger and fairer superannuation industry. Both measures are an investment in the future, the former by assisting Indigenous Australians to achieve educational equality and the latter by ensuring the provision of a comfortable retirement for all Australians, including many in my electorate of Greenway.

This bill does a number of important things and I would like to focus on three of them. The bill grants deductible gift recipient, or DGR, status to two educational trusts designed to support Indigenous education. It enables the regulation of investments by trustees of self-managed superannuation funds to ensure that there is no misuse of superannuation assets and it allows the use of tax file numbers by trustees of superannuation funds and retirement savings account providers to locate and consolidate member accounts. These important measures will result in a better future for all Australians by increasing the level of Indigenous education and by providing a comfortable retirement for working Australians.

Schedule 1 of the bill adds two organisations to the list of DGR recipients. These two organisations are the Charlie Perkins Trust, for children and students, and the Roberta Sykes Indigenous Education Foundation. The Charlie Perkins Trust was established in 2002 in memory of the late Dr Charlie Perkins AO. Dr Perkins was an inspiration to both Indigenous and non-Indigenous Australians alike. In a life full of achievements, Dr Perkins was responsible for the organisation of the famous Freedom Ride, which exposed the discrimination suffered by Indigenous Australians, in 1965. He was the first Indigenous person to graduate from university, in 1966, and he was appointed to a number of influential roles, such as Commissioner of the Aboriginal and Torres Strait Islander Commission and Secretary of the Department of Aboriginal Affairs, before being awarded the Order of Australia in 1987.

The Charlie Perkins Trust seeks to continue the inspiring work of Dr Perkins by providing for the advancement and education of Aboriginal and Torres Strait Islander people. The trust provides scholarships for overseas study at institutions such as Oxford, Cambridge and Harvard, which provide Indigenous students with the opportunity to access their unlimited potential and which will undoubtedly pay dividends to Australia in the future.

The second organisation is the Roberta Sykes Indigenous Education Foundation, which was established in 1990. Dr Sykes was another inspirational Australian whose legacy will surely be long. Dr Sykes was a poet and author who was heavily involved in the Aboriginal land rights movement and who, among other roles, was the Executive Secretary of the Aboriginal Tent Embassy in 1972. Among her many achievements, Dr Sykes was the first Indigenous Australian to attend an American university, receiving a PhD from Harvard. She was later awarded the Australian Human Rights Medal, in 1994, in recognition of her tireless campaigning for Aboriginal rights. The Roberta Sykes Indigenous Education Foundation also aims to advance the education of Aboriginal and Torres Strait Islander people and specifically provides additional assistance to female Indigenous scholars undertaking programs overseas, such as assisting with relocation costs for partners or family.

By being specifically listed as DGRs, the Charlie Perkins Trust and the Roberta Sykes Indigenous Education Foundation will be in a significantly better position to attract private and corporate donors. The increased donations will allow these great organisations to help even more Indigenous Australians to reach their potential. I am very proud to support these measures which will provide such a tangible benefit to Indigenous Australians and the future of our country. It is a strong demonstration of the commitment of this government to the advancement of the education of Indigenous Australians. It is very important for my electorate of Greenway as the Blacktown local government area is home to the largest Indigenous population in New South Wales, something which is not very well known.

Another feature of the bill I would like to comment on is being implemented as part of the government's election commitment to a fairer, stronger and simpler superannuation system. With this measure the government lays the foundation to regulate SMSF investment in collectables and personal use assets. SMSFs account for 99 per cent of all superannuation funds in Australia, numbering approximately 430,000. They hold over 30 per cent of all superannuation assets and, in recent years, they have enjoyed an annualised growth rate of 20 per cent. These statistics are very real and they can be found in APRA's Annual Superannuation Bulletin, published on 19 January this year.

As a popular vehicle for superannuation management, which forms such a significant portion of the superannuation industry, it is vital that SMSFs maintain a high standard of governance. Indeed, one of the key messages from the Cooper review and the government's Stronger Super response relates to the importance of these high levels of governance amongst SMSFs. The bill implements measures which will ensure that SMSF trustees do not derive any current day benefits from investments in collectables and personal use assets. These new measures will ensure that SMSF assets cannot be misused by an SMSF trustee, for example, by 'collecting' and then driving high-end sports cars or 'investing' in expensive artwork which is then displayed in the trustee's home. The government recognises that investment in collectables and personal use assets can be a legitimate investment for some SMSF trustees. Accordingly, the measures implemented by this bill do not call for a blanket prohibition on SMSF investment in collectables and personal use assets.

The government is certainly aware that to completely prohibit such investments would unreasonably prejudice certain industries, such as the significant art industry in this country. Instead, in fulfilment of the government's election promise, the measures allow the investment in collectables and personal use assets to continue, but remove the ability of the SMSF trustee to derive any current day benefit from such investment. The bill does this by allowing the creation of specific regulations regarding collectables and personal use assets with which SMSF trustees will need to comply. The regulations can relate to the making, holding or realising of such investments, and may prescribe penalties for noncompliance. These new measures will ensure that, as the number of SMSFs grows, their standard of governance will remain high. In this way the government is fulfilling its election commitment to create a fairer, stronger and simpler superannuation system for the future.

The third measure under this bill I would like to discuss fulfils another election promise of this government. Under schedule 3 of the bill, the government proposes to amend legislation and grant to superannuation fund trustees and retirement savings account providers the ability to use the TFNs of members to locate and consolidate the superannuation contributions of those members. This initiative is also consistent with the government's commitment to the creation of this fairer, stronger and simpler superannuation system.

This is an extremely important item. There is currently some $18.8 billion in lost superannuation in some 5.8 million lost superannuation accounts. While lost superannuation is still held on trust by the trustee of an eligible rollover fund, or in some cases the trustee of a superannuation fund, the lost super moneys are not being managed at the direction of the member for whose benefit they are held. It is vital that every Australian is able to enjoy a secure, comfortable retirement. Ensuring every working Australian is in full control of their superannuation is critical to achieving this outcome.

An efficient way of tracking down lost superannuation is by using the TFN of a fund member. However, while many account holders supply their TFNs to superannuation funds, it is actually against the law for trustees to use a TFN as the primary search method for lost accounts. This is a significant impediment to efficient administration of the superannuation industry. This new initiative will allow a trustee to locate and consolidate lost accounts using the TFNs of superannuation fund members without first needing to exhaust all other avenues. This will improve the administrative efficiency of the superannuation industry, which in turn will result in better returns to members.

It is also important to note that privacy safeguards will not be compromised by this initiative. It will remain voluntary for individuals to provide their TFN to their superannuation fund or retirement savings account provider, and TFNs will not replace account numbers as primary identifiers. These amendments are consistent with the provisions of the Privacy Act 1988, the National Privacy Principles contained in that act as well as the TFN Guidelines. To ensure that the account consolidation process is carried out in the most efficient way, regulations will again be developed in consultation with industry. Among other requirements, member consent will be required for the consolidation of accounts, and processes and procedures will be created which superannuation fund trustees and retirement savings providers must follow before beginning the consolidation process.

There are several benefits associated with this bill which I have sought to highlight. With the passage of this bill it is evident that many Australians will achieve a tangible benefit from these measures to be implemented. These actions are also a genuine reminder of this government's commitment to policy delivery and fulfilling its vision for the future of Australia. It is a great example of the Assistant Treasurer and the Minister for Financial Services and Superannuation, and the people on this side more generally, listening to the needs of our constituents and responding to important policy issues. The bill delivers on multiple election promises that will undoubtedly have a very positive impact on sectors such as Indigenous communities throughout Australia and will assist in addressing some of the very real challenges facing the superannuation industry now and in the future. I commend the bill.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

I take the opportunity to speak briefly to schedules 1 to 4 and 6, which have been covered quite extensively by the member for Casey and my colleagues the member for Dobell and the member for Greenway. I will just touch on those briefly; then I want to go to schedule 5 in particular. Schedule 1, as has been indicated, has added two additional organisations to the list of deductible death recipients in the Income Tax Assessment Act 1997—that is, the Charlie Perkins Trust for Children and Students and the Roberta Sykes Indigenous Education Foundation fund. As was indicated by the member for Greenway, both organisations are established in the names of significant and important Indigenous Australians with a very worthwhile cause at the heart of their activities, and I think this is something that will be well supported across all members of the House.

Schedule 2 amends the Superannuation Industry (Supervision) Act 1993, and that is to permit the regulation to impose rules on self-managed superannuation fund trustees that make, hold or realise investments involving collectibles and personal-use assets. As indicated, the intention was to ensure the appropriate use of assets within those trust funds and was a commitment in the election campaign. I would also commend that. I understand from the contribution of the member for Casey that it is also supported on the other side.

Schedule 3 amends the Superannuation Industry (Supervision) Act and the Retirement Savings Accounts Act 1997 to allow the use of tax file numbers for a very specific purpose in order to locate member accounts without having to use other methods that may be less accurate and appropriate, but within a very strict and specific purpose in order not to breach the privacy considerations that need to be used when utilising tax file numbers. Schedule 4 amends GST law to replace the current mechanism for ensuring Australian taxes, fees and charges are not subject to GST, with a legislative exemption which allows for the making of regulations to treat an Australian tax or an Australian fee or charge in a particular way. The amendments allow the GST treatment of an Australian tax, fee or charge to be determined against legislative principles, providing the same outcome as the current mechanism but in a more efficient manner. So I would support all of those first four schedules. Schedule 6 is a range of miscellaneous amendments which I would also support.

I particularly want to take the opportunity to speak to schedule 5 because it is something that I have worked on for quite a few years—indeed, since we were in opposition—in conjunction with a local business called Seawind Catamarans. Seawind had approached me during the period in which their sector of the industry was campaigning around these reforms in order to support their international competitiveness. I am a great supporter, as many of my colleagues are, of the manufacturing sector of this country, and this is an important local manufacturing business. The dilemma that they faced was that the way the GST rules operated meant that people who purchased one of their catamarans had to export it within 60 days under the GST application. That creates a problem in a number of areas. Often these people are buying their first large boat, and they need to be taught how to navigate it properly. Often that is best done by sailing up and down the coast. The other advantage of that for us as a nation, of course, is not only the selling of a locally manufactured boat but also the fact that they then visit ports up and down our coastal areas, spending tourist dollars and participating in our tourist based areas as well.

The concern was that we needed to have a way to extend the amount of time in which they could utilise a boat for a private purpose in Australia beyond the standard 60 days. This particular schedule extends that to 12 months, but it does put very appropriate conditions and controls around that to ensure that the intention is achieved in making our manufacturing sector in the boatbuilding area competitive. Certainly since I first started working with them on this particular amendment, I was conscious that for something like Seawind Catamarans we have seen the global financial crisis and the very high Australian dollar and, like many in the sector, these things are putting real pressure on this local industry. They have a building facility in my electorate, which the Treasurer has visited, in fact, and there is also a second site in Nowra. They employ a significant number of people, and we are, obviously, very keen to see that business continue in our region.

To be able to add a small bit to making them internationally competitive through this particular amendment is particularly important. I think the schedule is well worth supporting, and I particularly commend the work that has been done to put it together in a way that means it does achieve what it is intended to achieve. The member for Dobell went through all the detail of that, so I will not repeat that, but I do welcome that particular schedule on behalf of our local industry. I commend all six schedules in this bill to the House.

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Firstly, I would like to thank the members who have contributed to this debate: the members for Dobell, Greenway, Cunningham and, indeed, Casey.

Schedule 1 amends the deductible gift recipient—DGR—provisions of the Income Tax Assessment Act 1997. Taxpayers can claim an income tax deduction for gifts to organisations that are DGRs. This schedule adds two new organisations to the act: the Charlie Perkins Trust and the Roberta Sykes Indigenous Education Foundation. It also recognises the name change of Guides Australia Incorporated to Girl Guides Australia. Making these organisations deductible gift recipients will assist them in attracting public support for their activities.

Schedule 2 allows regulations to make rules relating to how self-managed superannuation fund—SMSF—trustees make, hold and realise investments in collectables and personal use assets. Collectables can be a legitimate investment for some SMSF trustees. However, there is a risk that SMSF trustees may gain current day benefit from these investments due to the nature of the assets. These amendments allow regulations to be made that will ensure SMSF investments in collectables and personal use assets are made for retirement income purposes, rather than current day benefit. The schedule also removes a reference to a provision that was repealed in 2007.

Schedule 3 will improve the administrative processes of superannuation fund trustees and retirement savings account providers by removing the requirement for funds to use other search methods before tax file numbers are used. It will also allow superannuation fund trustees and retirement savings account providers to use tax file numbers to facilitate the consolidation of multiple superannuation accounts held by the same person, provided the conditions in the regulations are met. The accompanying regulations will ensure that appropriate safeguards are in place to support the use of tax file numbers, facilitating the account consolidation process and to protect the privacy of members.

Schedule 4 will amend the GST law to replace the current mechanism for exempting Australian taxes, fees and charges with a legislative exemption with effect from 1 July 2011. The GST law currently specifies that Australian taxes, fees and charges are exempt from GST if they are included in a determination of the Treasurer. This measure will allow the GST treatment of an Australian tax, fee or charge to be determined against legislative principles. Generally this measure will provide the same outcome as the current mechanism, but in a more efficient manner. This measure will provide increased certainty to taxpayers and government agencies in relation to the GST treatment of new taxes, fees and charges, as the tax treatment is not dependent on the item being listed in the determination. A legislative exemption will provide a more effective and transparent approach to exempting Australian taxes, fees and charges from the GST compared to the current exemption mechanism.

Finally, schedule 5 to this bill covers other amendments to tax laws. These amendments are part of the government's commitment to the care and maintenance of the tax law, and include some legislative issues raised by the public through the tax issues entry system. This bill deserves the support of the parliament.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ordered that this bill be reported to the House without amendment.