Wednesday, 16 June 2021
Treasury Laws Amendment (COVID-19 Economic Response) Bill 2021; Second Reading
That this bill be now read a second time.
This bill makes some important changes to facilitate COVID-19 disaster payments. Schedule 1 to the bill extends the existing power in the Income Tax Assessment Act 1997 that allows the Treasurer to declare eligible state and territory COVID-19 business support grant program payments to be free from income tax. This legislation will extend eligibility to grants provided in the 2021-22 financial year, in recognition of the ongoing economic impacts of COVID-19, as evidenced by the recent Victorian lockdowns.
Under the existing measure, payments received by small and medium businesses under eligible state and territory grant programs are free from income tax. As this treatment can only apply to payments received in the 2020-21 financial year it is necessary to extend this to the 2021-22 financial year so that it can apply to future payments.
These changes are consistent with the government's broader commitment to support those businesses and individuals impacted by the public health directives put in place from time to time to curb the spread of COVID-19.
All states and territories are eligible to apply for the same tax treatment where they have grant programs focused on supporting small and medium businesses facing exceptional circumstances in relation to COVID-19.
Schedule 2 to the bill amends the tax secrecy provisions in the Taxation Administration Act 1953 to allow the ATO to share protected taxpayer information with Services Australia to assist Services Australia with administering the COVID-19 disaster payment.
To minimise the number of ineligible applicants receiving payments, Services Australia will conduct integrity checks on applications for disaster payments using data provided by the ATO.
This amendment will help ensure that only those eligible for COVID-19 disaster recovery payments receive them and that COVID-19 disaster recovery payments are properly targeted to individuals impacted by the COVID-19 pandemic.
Full details of the measures are contained in the explanatory memorandum.