Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

I also rise to support the Tax Laws Amendment (2008 Measures No. 3) Bill 2008. It is certainly a sensible measure to address two problems that have arisen. As Senator Coonan described, the first one is in the corporate sector where put and call options and the treatment of their income has been made a little uncertain. The Senate Standing Committee on Economics did get submissions from a couple of people requesting that the government go further in the treatment of this and also in clarifying non-renounceable share rights. This certainly addresses the issues arising out of the McNeil case and does clarify that the proceeds for those put options in particular, and call options, are not income on a year-by-year basis; they are not assessable income as such but only assessable as capital when those rights are exercised. Therefore it restores, the government believes, the original intent of that legislation. It will also apply retrospectively for those that have acquired put or call options to 1 July 2001.

The remaining issues that were raised by the Institute of Chartered Accountants and also by the Taxation Institute of Australia, the committee believed, would be dealt with by Australian Taxation Office interpretation of those laws. A number of these matters have already been raised in a submission to the Tax Design Review Panel, which was set up on 2 February 2008 by the government. Indeed, as Senator Coonan said, schedule 2 of this bill deals with GST payments where the court found that they were not treated as supply, and this called into question the treatment of GST refundability. The government believes that this bill maintains the integrity and original intent of the GST system. It applies whether or not the GST payment was held to be in relation to supply. It also deals with the issue of the four-year limit for both taxpayers and the tax office, and gives certainty in that respect. The committee recommended that these bills be passed—that they were both very sensible measures and any request to go further would be dealt with by the review panel set up by the government. That would restore the balance of the tax bills. I am pleased to support the bill.

Debate (on motion by Senator Ludwig) adjourned.