Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) Share this | Hansard source

This is absolutely true, Senator Boswell. The previous government at the time that it introduced these measures did not understand the impacts because, as we heard at the Senate inquiry last week, there was no sectoral analysis of the previous measure either. So this is an unintended consequence of something that we have inherited and which we are now looking to address and we will address. I am very pleased to hear that the opposition is supporting those amendments.

The government’s amendments to the bill will now ensure employees in the charitable and not-for-profit sector are not affected by the previous government’s 2006 budget measure related to the third stage of the child support reforms that are due to come into effect on 1 July 2008. The government’s amendments will restore the use of the net value of reportable fringe benefits in the definition of adjusted taxable income of family assistance. This will ensure that staffing not-for-profit organisations will not suffer a loss of family tax or childcare benefits after 1 July 2008 if the circumstances have not otherwise changed.

We all acknowledge that these are very complex issues with flow on effects to employees far beyond the not-for-profit sector receiving family assistance. Therefore, we think that the most appropriate way of getting a very clear, precise, thorough and appropriate assessment of the impacts used to refer this issue to the Henry commission to examine the complexity of existing fringe benefits arrangements and to make recommendations to improve equity and simplicity in the longer term.

As a result of the government’s amendment concerning the treatment of fringe benefits in determining adjusted taxable income, the government will be opposing two minor technical amendments originally included with this bill. These technical amendments were designed to help families avoid debts by taking into account the previous government’s changes to the treatment of fringe benefits and obviously these amendments will no longer be needed.

Question agreed to.

Original question, as amended, agreed to.

Bill read a second time.