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

I rise to speak, on behalf of the shadow Treasurer, on the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013. This tax law amendment bill has eight schedules. Some of those schedules the coalition supports. Some of those schedules we will not be opposing. As a consequence, I say at the outset that the coalition will not be opposing the passage of this tax law amendment bill. On behalf of the shadow Treasurer, I will run through the relevant schedules, six of which relate to tax and two of which relate to superannuation.

Schedule 1 deals with the definition of 'documentary' for film tax offset purposes. The schedule amends the Income Tax Assessment Act 1997 to define 'documentary' in accordance with the Australian Communications and Media Authority guidelines and to restore its intended meaning. 'Documentary' in tax law, for film tax offset purposes, becomes 'a creative treatment of actuality that is not an infotainment or lifestyle program or a magazine program'. As the explanatory memorandum and the detail of the bill make clear, the schedule also clarifies that the exclusion of light entertainment programs from film tax offset eligibility does extend to game shows. This is done by adding game shows to the list of light entertainment programs explicitly excluded from film tax offset eligibility.

The offset is designed to encourage Australian investment in film production. These amendments are a response to litigation—the decision in the Lush House case—where the taxpayer successfully argued that their infotainment-like production Lush House, a six-part television series, qualified as a documentary for film tax offset eligibility purposes. As this judicial interpretation was wider than the intention of the original policy, amendments were proposed to make the legislative boundaries clearer around documentary and game shows and restore the original intent and the integrity of the offset. This proposal was announced in the budget of 8 May 2012. The amended definition applies from 1 July last year. The coalition considers these amendments—primarily a response to the decision in that case that I mentioned—to be sensible integrity measures that better target eligibility for, and access to, the key film industry tax concession.

Schedule 2 of the bill deals with ex gratia payments for natural disasters and amends the Income Tax Assessment Act 1997 to exempt from income tax any ex gratia disaster income recovery subsidy that was received by individuals who lost income, whether as an employee, small business person or farmer, as a direct result of the floods that occurred in Queensland from 21 January this year. It also exempts from income tax the ex gratia payment for the eligible New Zealand special category visa holders, equivalent to the Australian Government Disaster Recovery Payment, made in relation to the natural disasters occurring across Australia in the financial years of 2011-12 and 2012-13. These exemptions apply to payments relating to disasters occurring in those financial years, and the coalition supports these amendments in schedule 2.

Schedule 3 deals with the GST instalment system and amends the goods and services tax law to enable entities that are paying their GST by instalments and subsequently moving to a net refund position to continue to pay their GST by instalments, albeit a zero-instalment amount if they choose to. The purpose of this is to address an issue in the current law which leads to otherwise eligible entities being excluded from the GST instalment system, when they move to a net refund position, and therefore lose the compliance-cost advantages of submitting their BAS, their business activity statement, annually. It otherwise has to be submitted quarterly. This amendment will allow entities that use the instalment option and move into a net refund position to choose to continue to pay their GST instalments and therefore retain the compliance-cost advantages they see in annual reporting.

Somewhat ironically, the choice to remain in the GST instalment system provides the entity with compliance-cost advantages with not having to complete a quarterly BAS. The amendments result in those entities that decide to remain in that system receiving their refund after they have submitted their annual return. The option for GST instalment payers to elect, where it suits them, for a lower BAS compliance cost is available from 1 July, after royal assent. It gives those businesses the choice in that system.

It will benefit only a small proportion of businesses and not-for-profit organisations. It will reduce compliance costs for electing entities, in an ongoing sense. There will be some transitional costs by those that elect but presumably they will choose the overall benefits to outweigh those costs. The coalition supports these amendments, albeit quite technically and narrowly applicable ones, but they have our support. We do note that this was announced two budgets ago, on 10 May 2011, and we do wonder why it has taken the government two years to deal with this.

Schedule 4 is a regular schedule that appears in these tax law amendment bills. It amends the Income Tax Act of 1997 to again update the list of deductible gift recipients by adding six entities: the Conversation Trust, the National Congress of Australia's First Peoples Limited, the National Boer War Memorial Association Incorporated, the Anzac Centenary Public Fund, the Australian Peacekeeping Memorial Project Incorporated and Philanthropy Australia. We are told from the explanatory memorandum that the financial impact of these listings will be just under $10 million over the forward estimates—in fact, $8.6 million I think is the figure.

Schedule 5 is one of the schedules I highlighted at the start that deals with superannuation and it amends the Superannuation Industry (Supervision) Act 1993, known colloquially as the SIS Act, to expand the duties of trustees of particular superannuation funds to establish and implement procedures to consolidate accounts where a member of a fund has multiple accounts within a fund and consolidation is in the member's best interests. This measure will facilitate a reduction in the number of unnecessary accounts, boost superannuation balances by ensuring members avoid paying unnecessary fees and insurance premiums on multiple accounts and, at the same time, reduce the number of lost accounts.

This proposal was announced in September 2011 by the minister. It is a measure that has the coalition's support. It will lead to greater efficiencies and less red tape, in an ongoing sense. I should point out that the industry raised several concerns in the hearing of the Joint Committee on Corporations and Financial Services, inquiring into unclaimed money late last year and its likely interaction with the consolidation process. In particular, there were comments that the requirements of the unclaimed money bill were likely to lead to increased double-handling and complexity in this accounts autoconsolidation process; that the unclaimed money time lines could have been better chosen—in other words, delayed to better dovetail with this consolidation process, instead of the haphazardness and haste of the bill, just to help the government meet an unlikely cash surplus target for 2012-13 which it abandoned only two months later; and that all parts of the consolidation process should be stipulated before systems are designed and automated, otherwise the costs and risks of getting things wrong will mount. Those are some of the concerns that were raised. With better coordination, consultation and policy processes, systems to automatically consolidate accounts can be designed once and holistically, with double-handling costs and risks kept to a minimum.

I turn to the last three schedules. Schedule 6 is the other schedule dealing with superannuation, and with it the Gillard government is again seeking to quietly reduce the Howard government superannuation co-contribution scheme for low-income workers. It will halve the government's maximum co-contribution under the scheme from the current $1,000 down to $500. Under the Howard government, the government super co-contribution for low-income earners was up to $1,500. It also, again, reduces the government's co-contribution matching rate by half, from the current dollar-for-dollar rate down to 50c for every dollar put in by the low-income earner. It was originally $1.50 for every dollar. It also halves the income band across which the co-contribution phases out or tapers. Instead of the higher-income threshold being set at $30,000 above the lower-income threshold, as it is currently, it will be reduced to $15,000. Lastly, indexation of the lower-income threshold, which has been frozen for two years, since the 2010-11 budget, will be frozen for another income year, 2012-13.

These amendments will commence from the date of royal assent and apply from the 2012-13 year. The financial impact of these amendments is around $330 million a year on assessment, once matured. The government asserts that the compliance cost impact of these amendments will be minimal. Once again, it is necessary to point out the hypocrisy of the government on superannuation. This is yet another example of the government not living up to their word to not change superannuation, 'not one jot, not one tittle', and it is another illustration of the tendency of those opposite to run a class war in the lead-up to elections and then cut benefits for low- and middle-income earners when they need to plug their budget black holes. After this sixth change to the government's super co-contribution benefits for low-income earners, the current government, by the time they are finished, will have cut those benefits by more than $3.3 billion.

Schedule 7 rationalises and consolidates the dependency tax offsets. It amends the Income Tax Assessment Act 1936 to create new consolidated dependency tax offsets for taxpayers maintaining certain classes of dependants who are genuinely unable to work; it amends the Income Tax Assessment Act 1997 to preserve the existing dependency offsets for taxpayers eligible for the zone, overseas forces and overseas civilian tax offsets; and it amends the 1936 act to reflect the impact of the consolidation of the dependency tax offsets on the net medical expenses tax offset.

To provide a bit of history and context, the rationalisation of numerous dependency tax offsets did have some merit, but I cannot help thinking this government is only doing so to feed its massive spending addiction. As described in the Henry review of 2010, the dependent spouse tax offset in its original form had become somewhat outdated. It was often holding back participation in the workforce. The Gillard government's announcement in 2011-12 restricted that, of course. All in all, given the state of the budget, the coalition will not be opposing this measure—as I said, because of the state of the budget.

The last schedule deals with the taxation of financial arrangements, known as the TOFA regime, and, again, this is another regular entrant in the tax law amendment bills that come before this chamber. Like a few before it, it seeks to clarify and refine the operation of certain aspects of the regime. They are largely of a technical and housekeeping nature. They flow from ongoing monitoring of the implementation of the TOFA reforms and they have been developed in consultation with the industry. The government argues these amendments refine and clarify the operation and provide lower compliance costs and additional certainty for affected taxpayers. These proposals were announced some time back, in June 2010, and apply from the commencement of that regime.

The coalition supports these amendments to the schedule which appear generally beneficial to taxpayers with compliance costs unlikely to be significant at all. So the coalition will not be opposing the passage of this legislation. As I have noted, the government's change to the super co-contributions will be the sixth change and that will mean the cuts to benefits of those low-income earners will be more than $3.3 billion. As I noted with the other schedule, given the parlous state of the budget handed down a fortnight ago, where a $1 billion surplus forecast only six months ago for this financial year is now a $19 billion deficit, the coalition will in this instance elect not to oppose the passage of this bill through the House of Representatives.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

There are many improvements to our tax and superannuation systems that are enabled by the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013. Among other things, this bill provides certainty to those small businesses who use the GST instalment system and in schedule 3 we have amendments that will reduce compliance costs by allowing taxpayers to estimate their annual GST liability, allowing them to pay by instalment and submit an annual activity statement rather than quarterly or monthly activity statements, which is a great relief for many small businesses. This measure arose from a suggestion made by a member of the public to the Tax Issues Entry Scheme, which allows the public to put forward suggestions for minor policy changes. So it is great that it has been responsive to actual needs and suggestions from the public. The bill also ensures that tax offsets will continue to encourage Australian documentary, film and television production and it furthers the government's ongoing efforts to reduce the number of lost superannuation accounts. At June 2012 there were almost 32 million superannuation accounts in Australia, which is almost three accounts for every worker. This measure has been released for public consultation twice, in March 2012 and also August 2012. The bill is part of a broader package of superannuation measures that are aimed at reducing fees on unnecessary superannuation accounts, protecting members' retirement savings from being eroded by those fees and charges.

All these improvements are very worthy and very worth while for small businesses and the general community and will be of great benefit to the individuals they affect. However, there is one particular aspect of this bill that I want to speak about today and that is the listing, as a deductible gift recipient, of the National Boer War Memorial Association. Members would be aware that I have an interest in the Boer War and that I support the works of this worthy association. Just yesterday we were talking about the Boer War and the memorial, which I will touch on later. From memory, it was one of our fellow members in the House who had just come back from a function on the weekend wearing a rather loud tie commemorating some Boer War functions.

Last year I spoke in this House to mark the 110th anniversary of the signing of the treaty of Vereeniging, which ended the second Boer War. I spoke then about the importance of remembering this war, which is often referred to as the forgotten war. For Australia the Boer War is particularly significant because in many ways the Boer War marked the beginning of Australia as an independent nation and it played a pivotal role in forming our national character. At the start of the war in 1899, Australia was six self-governing Crown colonies in the final stages of forming a federation and in June 1899 the people of all colonies except Western Australia had voted in favour of federation—and in 1900 Western Australia would join them.

By then Australians, including our first servicewomen to serve overseas, were already serving alongside Britons, Canadians and New Zealanders as part of the imperial forces. The British commanders particularly valued the Australians for their horsemanship, their bush skills and their initiative. The Australians were becoming known for a special type of mounted infantry which would become the light horse of the First World War. For the first time, Australians and New Zealanders fought together, as they would in future conflicts, a tradition that has bonded our nations in the most exceptional way for over 100 years now.

The Australian tradition of raising specific volunteer forces to serve overseas was also established. As would happen later in the 20th century, men were recruited from individual states, but they fought together as Australians. In all, some 23,000 Australians, including 60 women, served in the Boer War. Unfortunately, 589 lost their lives and 1,400 sustained serious wounds. Australia also lost its first servicewoman when Sister Frances Emma—Fanny—Hines died of pneumonia in August 1900. It is sobering to think that almost half of all deaths were from disease or accident.

The National Boer War Memorial Association is a very important association in commemorating our role in the Boer War because, while the Boer War was the first war to be commemorated by public memorials in many small towns across Australia, to date no specific national memorial to the war has been built. About a month ago, I was up in Norfolk Island for committee work, but prior to that I was also there with the minister for territories, and I had the opportunity to visit the Norfolk Island RSL and speak to them about a $2½ thousand grant that they had just received from the Labor government that will help them build a memorial in their RSL: a cabinet to house their memorabilia.

The National Boer War Memorial Association has been campaigning tirelessly to rectify the need for a specific national memorial, and now, more than 110 years after the event, preparations for the building of such a national memorial are well and truly underway. The site for the memorial is on Anzac Parade in Canberra and was dedicated on 31 May 2008. The design was unveiled by CDF, General David Hurley, in Canberra on 1 March 2012.

The listing as a deductible gift recipient of the National Boer War Memorial Association will enable the raising of much-needed funds to pay for this important memorial. The timing of this legislation could not be more fitting, because 31 May, which is this Friday, will mark the 111th anniversary of the end of the Boer War, and across Australia commemorations will be held. There were some on the weekend, and there will be some in Canberra this weekend. In Canberra we have a service and wreath laying at St John's church in Reid, which is just behind the intended site for the memorial; a dedicated closing ceremony at the Australian War Memorial; and an official observance at the site of the future National Boer War Memorial on Anzac Parade.

Today I ask that we all remember the brave men and women who served in Australia's first national war, the Boer War, and I look forward to one day being able to commemorate an anniversary of the Boer War at a beautiful National Boer War Memorial. The site that is dedicated is a beautiful site, but what is even more stunning is the actual design, with the men on horses and the tufts of grass that surround it that look like little puffs of dust rising up behind the horses as they ride. It is a very active and quite passionate representation of a scene from the Boer War. It is a stunning memorial, and I really look forward to seeing it in place in the near future. Fortunately, the association has received a seeding grant of $200,000 from the Department of Veterans' Affairs, and that will go some way towards getting us to the final stages of this beautiful memorial. I commend the bill to the House.

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

Can I also join the previous speaker and make my comments about the Boer War Memorial. In my electorate, I have the Lancer Barracks. The Lancers are the oldest and most decorated unit in the Australian military. They, of course, were a cavalry regiment in the Boer War and are very strong advocates for the Boer War Memorial, as am I.

I am speaking once again on one of the TLAB bills, in this case the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013. I think I have said in this house a number of times how much I enjoy the TLABs. This one is actually a tax and superannuation law amendment bill, which is called a TSLAB, so we now have two versions of these bills that cover a range of things to do with tax laws.

I have been accused at various times of having a character flaw for enjoying speaking on TLABs and TSLABs, but for me they bring together in one bill a whole range of things that government is doing and indicate the complexity and sometimes the fine detail of work that goes on behind the scenes when you deliver a major policy. In some ways they follow along behind, clean up, fix and adjust things that change in major policy areas.

This bill has eight schedules. If you are a small business person, you earn less than $35,000 a year, you are in film or you like Australian film, this one has something for you. In fact, probably just about everybody in the country would find something in this bill that relates to them. I am going to mention briefly all of the schedules but I am going to concentrate on a couple of them more than others.

The first one is one that I am going to spend a little bit of time on. It amends the film tax offsets to restore the intended meaning of 'documentary' and clarifies that game shows are not eligible for tax offsets. Income tax law provides tax offsets to encourage expenditure on films in Australia if certain criteria are satisfied. The producer offset, for example, requires a minimum level of Australian expenditure. It varies for different genres, but the level required is lower than for documentaries, and this schedule is specifically about documentaries. Screen Australia is the film authority that administers the producer offset, which involves assessing whether or not a film satisfies the criteria set out in division 376.65 of the Income Tax Assessment Act 1997, and I will not repeat the name of that act. This includes determining whether a film is a documentary and calculating the amount of QAI, which is qualifying Australian production expenditure.

Documentaries are an evolving form. If you consider what you see on television at the moment, you see the growth of reality television and the new forms of game show. Over time, the new forms that emerge weave their way into other forms. In a very short period of time we have seen a rapid change in the ways that documentaries tell their stories. At the moment in the act there is not actually a definition of documentary so Screen Australia has been using the definition from the Australian Communication and Media Authority's guidelines in order to administer the producer offset when it comes to documentaries.

Not so long back, in 2011, a series was made called Lush House. It follows a householder management expert, Shannon Lush, working with a different family or household in each of 10 episodes to improve their household management. The program satisfied the conditions of 376.65 of the tax act for the offset but failed as far as Screen Australia was concerned in respect of the documentary requirement, based on ACMA's guidelines. So the producers of Lush House disagreed with the decision and went to the Administrative Appeals Tribunal. They ruled that there was no definition in the act. They used a different definition and ruled that Lush House was in fact a documentary.

I will say upfront that documentary is such an evolving form that no matter what definition you have producers are going to push against it and the form is going to push against it. It will continue to move very quickly in Australia and internationally. It is a highly competitive form, so being at the edge of it in terms of selling your work is incredibly important. But what schedule 1 does is reinstate the definition which Screen Australia was using by inserting that definition from the guidelines into the act. So it reinstates, if you like, the situation that was in place before Lush House went to the Administrative Review Tribunal. This is one of those decisions which will always be controversial in a highly emerging form. It is incredibly important that Screen Australia continues to liaise with the industry to make sure that the definitions that they are using continue to be responsive and interpreted within the rapidly emerging concept of what makes a documentary—but it is a particularly interesting schedule.

Schedule 2 exempts from income tax the disaster income recovery subsidy paid to individuals, small business persons and farmers who lost income as a result of ex-tropical cyclone Oswald and related flooding in Queensland. Every time the government provides disaster income recovery funding of one form or another in the community following any of the disasters we have had in recent decades, the tax law is amended to make sure that those recovery payments are not taxable. Schedule 2 makes sure that the disaster income recovery subsidy payments for Oswald and associated flooding in Queensland are tax-exempt.

Schedule 2 also exempts from income tax the exgratia payments equivalent to those payments for eligible New Zealand non-protected special category visa holders who were affected. It is a very complex language but basically it makes sure that New Zealanders who were affected by the disaster and who received the payments in Australia had the same tax treatment as Australians. You get used to this sort of language of TLABs and TSLABs. Ultimately underneath it there are some very common sense things. That one is simply making sure that payments that people receive to help them recover from a disaster are not taxed. It is a perfectly fine and logical schedule.

Schedule 3 relates to the GST instalments system. It amends the GST act to enable those small-business taxpayers who are paying their GST by instalments and who subsequently move into a net refund position can continue to pay their GST by instalments if they wish to do so. It provides certainty for those small business entities that use the GST instalment system and it ensures that as their business moves from doing well to doing less well they will be able to continue to use the instalment system they are familiar with. It is a logical change. It came about because a member of the public asked for it through the tax issues entry scheme, which allows the public to put forward suggestions for major policy changes. This is community consultation at the most grassroots level working. It is a very good change and has been quite welcomed by number of small businesses in my area.

Schedule 4 amends the Income Tax Assessment Act 1997 to include a few more organisations on the list of DGR's, deductible gift recipients, which allows tax deductibility for donations. Is that what it means?

An honourable member: Tax deductible.

I knew it was something like that. I knew what it did. The Conversation Trust is a charity that publishes analysis and commentary on current affairs from the university and research sector. It delivers directly to the public through its website, Twitter and Facebook. That one is backdated to 21 November 2012. The National Congress of Australia's First Peoples Ltd, which is a national representative organisation of Aboriginal and Torres Strait Islander peoples also goes on the list. The National Boer War Memorial Association goes on the list. The Anzac Centenary public fund, which collates donations to fund a range of Anzac Centenary initiatives and projects as agreed by government goes on the list. The Australian Peacekeeping Memorial Fund Project Inc., which seeks donations to build a memorial on Anzac Parade in Canberra to recognise the service of Australians who have served in peacekeeping missions goes on the list and is also backdated to 31 December 2012. Philanthropy Australia, which is the national membership body for the philanthropic sector primarily servicing Australia's philanthropic trusts and foundations also goes on the list. Almost every TLAB or TSLAB has a number of organisations of that quality and calibre added to the DGR list.

Schedule 5 relates to the merging of multiple accounts in a superannuation entity. Most people would know that the Labor government has engaged in a number of reforms designed to make superannuation more transparent and simpler to manage. We found ourselves in a position in this country of people having many superannuation accounts, sometimes being unaware that they do. As they moved from one employer to the other over the past decades it was sometimes easy for superannuation account to be left behind somewhere and for it to be eaten up in fees.

We have done a considerable amount of work through the lost super, MySuper and other reforms to reintroduce people to their lost accounts. This one deals with a particular set of circumstances where a person will have more than one account with the same superannuation entity. As of June last year there were almost 32 million superannuation accounts in Australia—that is almost three accounts for every worker. We all know that if an account sits there for a while it is possible for fees and insurance costs to start to eat up the account. So this one places a general duty upon superannuation trustees to identify members with multiple accounts within their fund on an annual basis and to consider whether it would be appropriate to merge them, having regard to the best interests of members. This will apply regardless of the balances of the accounts concerned.

There was considerable consultation in the early days of putting this policy together. A number of kinds of accounts have been exempted from this, but it is a very good measure that should result in a more rational approach to multiple accounts within superannuation entities. And I will point out that a number of the major entities have already begun the process of finding ways to join accounts where it seems clear that the person has two accounts either without their knowledge or because that is the way it happened at the time, without a conscious choice.

Schedule 6 deals with the superannuation co-contribution and, again, it is part of a larger reform. The federal government has introduced a new way to contribute to the superannuation savings of eligible low- and middle-income earners. It was announced in the 2010-11 budget and is called the low income super contribution. It provides a payment of up to $500, not indexed annually, into the superannuation accounts of low-income earners. By the way, the schedule I am talking about is not about the new contribution; it is about the old one, which I will get to in a moment. The purpose of this new one is to compensate low-income earners for the fact that when they contribute to their superannuation account they do not receive the same tax benefit as a person earning a higher income receives. Essentially, the payment of up to $500 compensates a low-income earner and gives them a reasonable tax advantage for putting money into super, which those on higher incomes get automatically.

Part of the change is that we are reducing the contributions that made through the Howard government's superannuation co-contribution, which was introduced in 2003. Under that scheme, individuals were matched at a 100 per cent—dollar for dollar—rate up to $1,000 for people with incomes up to $31,920. Unfortunately, only about one in five people who were eligible to claim that actually did. The views of the industry were quite clear in the submissions they made on this bill: they preferred the low-income superannuation contribution, which went to all low-income earners, rather than the co-contribution, which was only being claimed by one in five.

I am nearly out of time so I had better be very fast. Schedule 7 consolidates eight existing dependency tax offsets into a single streamlined offset and schedule 8 deals with the TOFA arrangements to clarify the operations, with lower compliance costs, and to provide additional certainty to affected taxpayers. So there are eight schedules—sorry I did not get enough time on 7 and 8—with very interesting amendments to tax law covering a broad range of areas. Again, there is something in there for everyone.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I would like to speak very briefly on the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill. In particular, I would like to speak on schedule 4, which amends the Income Tax Assessment Act 1997, to update the list of deductible gift recipients by adding six entities, which are the Conversation Trust, the National Congress of Australia's First Peoples Limited, the National Boer War Memorial Association Incorporated, the ANZAC Centenary Public Fund, the Australian Peacekeeping Memorial Project Incorporated, and Philanthropy Australia Incorporated.

I note that the member for Canberra took the opportunity to speak about the National Boer War Memorial Association Incorporated. I would like to speak about the ANZAC Centenary Public Fund, and in particular the ANZAC Day celebrations that will be coming up in the next two years. I note in the schedule that the donations collected in the ANZAC Centenary Public Fund will be used to fund a range of ANZAC centenary initiatives and projects as agreed by government for the commemoration of the ANZAC centenary and Australia's involvement in World War I—1914 to 1918.

I certainly support the inclusion of the ANZAC Centenary Public Fund as a deductible gift recipient. We are approaching a most important ceremony—the commemoration of ANZAC Day in two years time—and I know that many of the communities around Australia are now actively working towards the celebrations that will take place on that day.

My electorate of McPherson is certainly preparing already. We have four RSLs in that community—Coolangatta-Tweed, Currumbin, Mudgeeraba and Burleigh Heads—and I am sure that many people around Australia would be aware of the ceremony at Elephant Rock on the Gold Coast every ANZAC Day, and particularly the dawn service that is held there. I know that the Currumbin RSL will be working towards making the centenary celebration events which we will all remember—as will many of the RSLs throughout Queensland and Australia, particularly the four in my electorate.

Having the ANZAC Centenary Fund included in the deductible gift recipients gives many people the opportunity to contribute to that fund. Having it tax deductible is absolutely wonderful, because it gives us the opportunity to recognise and publicly demonstrate our commitment to those people who have served in Australia and overseas, and who have done so much to support our nation in the past, and to support those who will continue to do so in the future.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the legislation before the House, and to support it. I would like to make some comments with regard to four of the schedules that are before us this afternoon. Firstly, I would like to comment in relation to the taxation treatment in terms of film tax offsets. One of the great joys of being an Australian is to be able to travel around the world and know that people have seen our country and have some understanding of our quirky sense of humour through the films that we produce. I know, from my own children's viewing habits, that documentaries about places are a really important part of their education about the world.

This particular offset is established to encourage expenditure on films in Australia if they meet certain criteria. It does not seek to define the term 'documentary', but we are responding to ensure that when this tax offset is applied it is genuinely for pieces of work that are documentaries. I doubt that we could ever say that a game show would constitute a documentary in the same sense that you and I might understand the normal use of that word; however, I understand that this piece of legislation ensures that the offsets that we are hopefully going to put through the parliament with the passage of this bill will encourage the sorts of film and television programs that they were intended to encourage rather than genres that were definitely intended to be excluded when the legislation was first put before the House. By our doing so, those who watch us from afar will be able to find out what Australia is really like and get the flavour of Australian documentaries.

The third schedule of the bill is a very significant improvement which answers to a point so often raised in my conversations with local small businesses in my area—that is, the burden that they have carried ever since they were asked, with the imposition of a GST under the Howard government, to become tax collectors. This schedule seeks to amend the GST act to enable those small-business taxpayers who are paying their GST by instalments and subsequently moving to a net refund position to continue to use the GST instalments if they wish to do so. At the moment, small-business taxpayers who are not using the instalment option and are already in a net refund position remain ineligible to pay their GST by instalments while they remain in the refund position. The change we are proposing will allow taxpayers who move into a net refund position to continue to access the instalment system and to retain the accompanying compliance cost advantages of submitting their BAS statement annually if they choose to do so. The great thing about this proposed change is that it has come from the suggestion made by a member of the public through the Tax Issues Entry System. Never let it be said that an Australian with a brilliant idea is unable to participate in the fine processes of this place. Putting ideas forward, looking to the future and solving some of the problems that face our small businesses in order to improve our productivity and the life of those working in small business are all very worthy activities. This government has responded to suggestions from the public for minor tax policy changes.

In the fourth schedule before us in this bill, I, like the member for McPherson, am very pleased to see the Anzac Centenary Public Fund listed. In my own electorate preparations for the centenary of ANZAC are well underway, and the $100,000 grants from the federal government to each of the electorates around this fine country will enable a broad vision of how we want to celebrate. We are beginning a collective journey as a community in our unique and different ways across this country. The Anzac Centenary Public Fund's receiving DGR status will allow those who make contributions to the fund a certain degree of tax deductibility on their contributions.

The conversation trust is also listed in the fourth schedule of the bill. The trust serves a very important public purpose in analysing and providing written commentary by the university and research sectors on current affairs. In a 24/7 cycle of news, of which were all aware and sometimes victims, it is very important that there be those who can stand back, make some considered and sensible observations and contribute their observations to the public space for consideration.

Another listing in the fourth schedule of the bill is for the National Congress of Australia's First Peoples. I do not think there would be any objection to the listing of this agency, which states as its goal a movement towards the recognition of Aboriginal and Torres Strait Islander rights and towards securing a better economic, social, cultural and environmental future. The National Boer War Memorial Association is listed here with DGR status, which will be provided from 1 January 2013, and so is Philanthropy Australia. Philanthropy Australia is a national membership body which pulls together philanthropic agencies, and it is very helpful for members of our community who are seeking to do good works in the community to be able to find out where they might seek philanthropic grants. Philanthropy Australia is serving a vital role in pulling the goodwill of the larger community together into a place where it becomes more accessible for people right across the country rather than perhaps just people in cities who might, by happenstance or friendship or networks, be able to access the good offers of Philanthropy Australia to improve our national wellbeing in a range of ways.

I am more than delighted to see the Australian Peacekeeping Memorial Project Inc. there. It will create a memorial on Anzac Parade in Canberra for Australian peacekeepers. People who have served this country in international peacekeeping operations will be provided with proper recognition of their service to this country and the cause of freedom and peace around the world. I am in my electorate privileged to know a number of these peacekeepers. Indeed, one by the name of Milan Nikolic approached my office the year before last with an idea to honour and acknowledge all those men and women who have served, by providing a badge of honour for their family members to wear. This was a great initiative. It is like the reform we were talking about before, when an individual Australian saw a way to cut red tape for Australian business, brought it to the government and we put it forward. Milan approached me and asked for my assistance in moving forward. I was able to take it to the Prime Minister, and last year, I am delighted to say, we were able to provide an ongoing recognition, in the form of a badge, for the family members of all of those who have served or are serving in our forces. So the kids whose mum or dad might be serving away will be recognised in their school by their teachers and by their friends as doing their own sort of service by doing without their mum and dad. It is similar for the brothers, sisters, fathers, mothers and partners of those who are serving.

I am pleased to have spoken in this place on many occasions about the very significant reform that this government has undertaken in superannuation. We are the party of superannuation. I grew up in a working-class family. Happily my father was able to start his own business. He worked very hard and became quite successful. But I can tell you we did not have many conversations about superannuation around the kitchen table. Those conversations were certainly happening in other houses around the country. The advantage of careful saving for the future and putting that money aside is obvious to all of us now, with trillions of dollars sitting there as the wealth of this nation and an investment for a dignified retirement. The reality is that, for many people, superannuation was not even a word that they knew about, let alone a reality that they could experience and have the comfort of in their later years.

The amendment in this schedule will place a general duty upon superannuation trustees to identify members who have multiple accounts within their particular fund. They need to do this on an annual basis and consider whether it would be appropriate to merge them, having regard to the best interests of the members. This seems like such common sense. If you are a trustee and you are in charge of making sure that somebody's retirement nest egg grows, it would be a terrible thing to find out that moneys were kept in separate accounts with the deliberate intention of increasing revenue flow to the superannuation company at the cost of the people whose money they were supposed to be looking after. This schedule means that the 32 million superannuation accounts in Australia—roughly three for each worker—should begin to reduce in number. With that reduction in number, there should be an increase in the benefit to those account holders as their money is gathered to one nest egg, under the trustees' guidance, which should grow in value without constantly being eroded by servicing fees.

There are a number of other amendments in the schedules before us. Essentially these amendments refine and clarify the operation of the taxation of financial arrangements regime. They collectively lower the compliance costs and they provide additional certainty to affected taxpayers. They are the outcome of ongoing monitoring and implementation of the taxation of financial arrangements, and they have been achieved in consultation with the industry and the Australian Taxation Office. I commend the bill to the House.

David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Link to this | Hansard source

I acknowledge those who have contributed to this debate, in particular the member for Casey, the member for Canberra, the member for Parramatta, the member for McPherson and most recently the member for Robertson, and I thank her for her genuine interest in these matters. Schedule 1 of the Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013 makes some amendments to ensure that the meaning of 'documentary' in the film tax offset provisions is consistent with the meaning explained in the Australian Communications and Media Authority's guidelines—that meaning applied for tax purposes until the decision of the Administrative Appeals Tribunal in 2011—so that these amendments restore the previously understood meaning. Restoring the original meaning ensures that the taxation incentives for the production of film and television in Australia continue to encourage the sorts of productions the Commonwealth intends to support. Schedule 2 exempts from income tax certain disaster relief payments. This includes the ex gratia payment equivalent to the Australian Government Disaster Recovery Payment made to New Zealand special category visa holders and the Disaster Income Recovery Subsidy.

In the wake of recent disasters, it is important that these payments are tax free. Exempting these payments from tax maximises the value of the payments so that people can get on with the job of cleaning up after the floods and fires and, hopefully, get on with their lives. Exempting these payments from tax also ensures consistency with previous disaster relief payments that were also tax exempt. It also ensures the New Zealand special category visa holders who have been affected by recent disasters receive the same support as Australians.

Schedule 3 allows small business taxpayers using the GST instalment system to temporarily move into a net refund position to continue to use the instalment system if they choose to do so. These amendments aim to assist such entities that consider the compliance cost advantages of submitting their business activity statement annually outweigh the cash flow cost of delayed refunds. The amendments will ensure greater certainty for those small business taxpayers who use the GST instalment system. These amendments will apply in relation to GST instalment quarters starting on or after 1 July, following royal assent of this bill.

Schedule 4 adds six entities to the list of named deductible gift recipients in division 30 of the Income Tax Assessment Act 1997. Taxpayers can claim an income tax deduction for gifts to organisations that are DGRs. Therefore, DGR status will assist these bodies in attracting public support. The new DGRs listed are the Conservation Trust, the National Congress of Australia's First Peoples Limited, the National Boer War Memorial Association Incorporated, the Anzac Centenary Public Fund, the Australian Peacekeeping Memorial Project Incorporated and Philanthropy Australia Incorporated.

Schedule 5 to this bill amends the Superannuation Industry (Supervision) Act 1993 to require trustees to establish procedures for consolidating multiple superannuation accounts they hold for the same member on an annual basis when it is in the member's best interests. Defined benefit interest accounts, accounts supporting an income stream and first home saver accounts will all be exempt. The measure will commence on 1 July 2013, with the first round of consolidations to occur by 30 June 2014. This will apply regardless of the balances of the accounts concerned. The amendments will contribute to a steady reduction in the number of unnecessary accounts in the superannuation system. This measure was developed in consultation with industry and was released as an exposure draft on two occasions prior to introduction, with the views of stakeholders being incorporated at each stage. Schedule 5 provides a flexible regulatory framework for a process that many fund trustees are already undertaking. The amendments will simply ensure that the process is an industry-wide practice.

Schedule 6 of this bill will freeze the income threshold above which the maximum contribution phases down at $31,920 for 2012-13. The income threshold above which no cocontribution is payable will be reduced to $15,000 above the lower income threshold—that is, $46,920 for the 2012-13 income year.

These changes are supported by the low-income superannuation contribution. From 1 July 2012 the low-income superannuation contribution allows most people with income up to $37,000 to effectively pay no tax on their super contributions, by providing a benefit of up to $500 a year. This is better targeted, more widely available than the current co-contribution and does not require individuals to make additional after-tax contributions.

The opposition has publicly stated that it will discontinue the low-income superannuation contribution. This will result in 3.6 million low-income earners effectively paying more tax. The co-contribution scheme continues to be generous and provides a significant incentive for low-income individuals to make voluntary contributions into superannuation. The government is deeply concerned by these attempts to cut away at this important concession that has been reducing taxation levels for low-income earners.

Schedule 7 consolidates eight separate tax offsets for dependants into one new tax offset that is available to taxpayers who maintain a dependant who is unable to work because of invalidity or carer obligations. The eight tax offsets to be consolidated are the: carer spouse, invalid relative, parent, parent-in-law, child-housekeeper, child-housekeeper with child, housekeeper, and housekeeper-with-child tax offsets. Consolidating the dependency tax offsets removes out-dated barriers to dependants seeking employment. It builds on the government's participation agenda and allows the government to target more assistance to dependants who are genuinely unable to work.

Schedule 8 refines and clarifies the operation of the taxation and financial arrangements regime. The amendment's lower compliance costs provide certainty for effective taxpayers. The amendments respond to issues raised by industry and the Australian Taxation Office as part of ongoing monitoring of the implementation of the taxation and financial arrangements regime. The amendments have been developed following extensive consultation with industry. I commend the bill to the House.

Question agreed to.

Bill agreed to.

Ordered that this bill be reported to the House without amendment