Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 delivers measures announced in the 2023-24 budget to ease pressure and boost resilience for small businesses, also reducing compliance costs, and encouraging philanthropic giving. The bill also extends the existing Global Infrastructure Hub income tax exemption and clarifies certain arrangements relating to superannuation and insurance.

The first two schedules of the bill are other demonstrations of the government's commitment to supporting small business.

Schedule 1 to the bill amends the Income Tax (Transitional Provisions) Act 1997 to increase the instant asset write-off threshold to $20,000 until 30 June 2024, to improve cash flow and reduce compliance costs for small businesses.

Under this measure, small businesses with aggregated annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000 from 1 July 2023 and until 30 June 2024.

The $20,000 threshold will apply on a per asset basis, so that small businesses can instantly write off multiple assets.

Assets costing $20,000 or more can be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.

Schedule 2 to the bill amends the Income Tax (Transitional Provisions) Act 1997 to introduce the Small Business Energy Incentive to help small and medium businesses electrify and save on their energy bills.

Up to 3.8 million businesses with aggregated annual turnover of less than $50 million will have access to a bonus 20 per cent tax deduction for eligible assets supporting electrification and more efficient use of energy.

The new tax incentive applies from 1 July this year and until 30 June 2024. Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000.

The Small Business Energy Incentive will help small and medium businesses make investments like electrifying their heating and cooling systems, upgrading to more efficient fridges and installing batteries and heat pumps.

This incentive helps ensure these businesses share in the benefits and opportunities of the energy transition that's now underway. I thank the Minister for Small Business for bringing these measures forward.

Small businesses have a unique place in our economy and face unique challenges. With these two measures, the government is backing them in once again.

Schedule 3 to the bill provides a pathway for up to 28 community foundations to be endorsed by the Commissioner of Taxation as deductible gift recipients, subject to them complying with ministerial guidelines setting out the purposes for which they may use gifts. This will support foundations to undertake important work in their communities and contribute to the government's goal of doubling philanthropy by 2030. I thank the Assistant Minister for Competition, Charities and Treasury for his tireless work and advocacy in this area.

Schedule 4 to the bill amends the income tax law to specifically list the Justice Reform Initiative Limited and Transparency International Australia as deductible gift recipients, and extends the existing listing for the Australian Sports Foundation Charitable Fund and the Victorian Pride Centre Ltd. This encourages philanthropic giving and supports the not-for-profit sector as donors may claim income tax deductions for donations to organisations with DGR status.

Schedule 5 to the bill extends the Global Infrastructure Hub's (GI Hub) income tax exemption for an additional year, from its current expiry date of 30 June 2023 until 30 June 2024. The extension will ensure that all contributions and other income of the GI Hub received during the period from 1 July 2023 until 30 June 2024 will be exempt from income tax.

As the GI Hub is funded by contributions from G20 members, tax exempt status is granted to avoid subjecting these payments to income tax. This one-year extension will cover the GI Hub while it utilises current funding from G20 members.

Schedule 6 to the bill amends the income tax law with respect to general insurance to maintain broad alignment between accounting and tax. This avoids the income tax compliance burden on the general insurance industry that would be caused by the misalignment between the new accounting standard and existing tax requirements.

Schedule 7 to the bill replaces the current non-arm's length expense rules for superannuation entities. The measure introduces new arrangements for general expenses and better targets the application of these provisions. This will address the potential for very disproportionate outcomes while at the same time maintaining the broader integrity of the superannuation tax system.

Finally, schedule 8 to the bill clarifies that the Australian Financial Complaints Authority has jurisdiction to consider complaints that 'relate to superannuation'. This measure is important and necessary in reversing the effect of the Federal Court's decision in MetLife v AFCA [2022] FCAFC 173 and will provide consumers with greater access to external dispute resolution.

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

Debate adjourned.