Michael Sukkar (Deakin, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Schedule 1 to the bill makes it easier for small businesses to comply with their record-keeping obligations. If a business is genuinely struggling to keep appropriate tax records, then the Commissioner of Taxation, under this bill, will be able to offer the business the choice of undertaking a record-keeping course rather than paying financial penalties.

The education course will be free, take approximately two hours to complete, and is expected to be delivered online.

Schedule 2 to the bill is part of a package of commitments to secure the FIFA Women's World Cup in 2023. The bill therefore provides an income and withholding tax exemption to FIFA and a local Australian subsidiary, confined to income in relation to the event.

This will maintain Australia's strong reputation as a host for major international sporting events and, in particular, help promote women's sport.

Schedule 3 of the bill amends the depreciation regime for certain depreciable intangible assets—including patents, copyrights and in-house software—by allowing taxpayers the option to self-assess the assets' tax-effective lives.

Currently, these assets must be depreciated according to an effective tax life set by the law. Allowing businesses to claim depreciation deductions in line with a relevant asset's economic life, instead of its prescribed taxable life (which may be longer), makes it more attractive to invest in these assets.

This also aligns the tax treatment of depreciating intangible assets with that of most tangible assets.

This measure will apply to eligible assets acquired from 1 July 2023, after temporary full expensing ends.

Schedule 4 to the bill strengthens the existing protections against unfair contract terms in the Australian Consumer Law and the Australian Securities and Investments Commission Act 2001, improving small business and consumer confidence when entering into standard-form contracts.

The existing unfair contract terms protections provide that where a court finds a term is unfair, the term is merely void. This approach has not provided sufficient deterrence against the use of unfair terms, which remain common in standard-form contracts.

The amendments introduce civil penalty provisions prohibiting the use of, and reliance on, unfair terms in standard form contracts. This will enable a regulator to seek a civil penalty from a court. The existing definition of an unfair term remains unchanged.

The government's expectation is that regulators will continue to take a reasonable and proportionate approach to enforcing the unfair contract terms protections, including affording businesses an opportunity to respond to allegations of unfair terms before commencing any legal proceedings.

The Legislative and Governance Forum for Corporations was notified in relation to the amendments in schedule 4 to the bill as required under the Corporations Agreement 2002.

Schedule 5 to the bill provides an income tax exemption for qualifying grants made to primary producers and small businesses affected by Tropical Cyclone Seroja, which had a devasting impact on communities in Western Australia in April last year.

On 29 July 2021, the Prime Minister announced that primary producer and small business recovery grants of up to $25,000 would be activated under thejoint Commonwealth-State Disaster Recovery Funding Arrangements 2018. Schedule 5 makes these qualifying grants non-assessable non-exempt income for tax purposes, assisting affected communities as they begin and continue to rebuild and recover.

Schedule 6 to the bill makes amendments to reduce the effective tax rate on certain income earned by foreign resident workers participating in the Australian Agriculture Worker Program or the Pacific Australia Labour Mobility scheme from 32.5 per cent to 15 per cent.

The amendments seek to increase Australia's attractiveness as a destination of choice for foreign resident workers, while ensuring that workers of all skill levels pay tax at an appropriate rate on their earnings in Australia.

Schedule 7 to the bill amends various laws in the Treasury portfolio to ensure those laws operate in accordance with the policy intent, make minor policy changes to improve administrative outcomes or remedy unintended consequences and correct technical or drafting defects.

The amendments further the government's commitment to the care and maintenance of Treasury laws and will make it easier for Australians to comply with current laws.

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

Debate adjourned.