Monday, 21 June 2021
Biosecurity Amendment (Strengthening Penalties) Bill 2021, Treasury Laws Amendment (2021 Measures No. 4) Bill 2021, Farm Household Support Amendment (Debt Waiver) Bill 2021; Second Reading
That these bills be now read a second time.
I seek leave to have the second reading speeches incorporated in Hansard.
The speeches read as follows—
Biosecurity Amendment (Strengthening Penalties) Bill 2021
This Bill is about sending a clear message to individuals and companies who put at risk Australia's $61 billion agriculture industry and over $1 trillion in environmental assets by contravening the Biosecurity Act 2015.
A strong biosecurity system is critical to Australia's prosperity. Biosecurity laws protect agriculture, tourism and other industries, plant and animal health, the environment, and our market access. They are necessary to allow us to trade and for our nation to continue to thrive.
Australia's biosecurity system faces growing regional and global threats such as African Swine Fever and hitchhiker pests like khapra beetle and Brown Marmorated Stink Bug. As we look towards our economic recovery from COVID-19, the growth in trade and travel will only further emphasise these biosecurity threats.
This Bill increases a number of civil and criminal penalties under the Biosecurity Act to ensure they are appropriate, adequate and fit the crime. It targets key provisions of the Biosecurity Act where non-compliance has the potential to cause a significant and unacceptable risk for Australia's biosecurity status.
While we all play a role in protecting Australia's biosecurity, these amendments focus on individuals and businesses, such as commercial importers and biosecurity industry participants, that have a particular responsibility to know and understand their obligations under the Act and take the steps required to comply with the law.
This Bill ensures that penalties are set at a level that means they are not merely a cost of doing business. These maximum penalties, in some cases up to $1.1 million, reflect the potential gains someone might obtain or seek to obtain through non-compliance with our biosecurity laws, as well as devastating impact that contraventions may have on Australia's biosecurity status, market access and economy.
The increased civil penalties introduced by this Bill will serve as a significant deterrent to anybody considering undermining our biosecurity laws and the criminal penalties will allow a proportionate and appropriate punishment for contraventions of the Act.
The biosecurity system is constantly evolving, with new threats from pests and diseases emerging. We are continually reviewing the effectiveness of the Biosecurity Act to respond to these threats and are committed to the management of biosecurity risks associated with imported goods.
This Bill aligns with recommendations of the Inspector-General of Biosecurity for stronger penalties for serious non-compliance and builds on our continued commitment to ensuring adequate penalties for non-compliance, as demonstrated by the amendments in the Biosecurity Amendment (Traveller Declarations and Other Measures) Act 2020 which were passed last year to enable increased infringement notice amounts for travellers who fail to declare high risk goods on their incoming passenger card.
This Bill will further enable a stronger penalty system that reflects the seriousness of any breach of the Biosecurity Act so that those who flout our biosecurity laws feel the full force of the law in a manner that reflects the seriousness of their actions.
Treasury Laws Amendment (2021 Measures No. 4) Bill 2021
This Bill contains a number of important measures which are designed to:
• incentivise employers to retrain and reskill redundant employees;
• encourage greenfields minerals exploration;
• protect older Australians and people with a disability from financial abuse and exploitation;
• support ASIC to proactively address consumer harm;
• ensure that New Zealand maintains its primary taxing right in respect of New Zealand sporting teams; and
• deliver tax relief to around 10.2 million taxpayers.
Schedule 1 to the Bill will introduce an exemption from fringe benefits tax for employer-provided retraining and reskilling benefits provided to redundant, or soon to be redundant employees where the training is not related to the employee's current employment. This change will apply from 2 October 2020.
This will incentivise employers to retrain and reskill redundant (or soon to be redundant) employees so that they are better prepared to transition to their next career. This incentive supports the Government's skills reform agenda and current programs and assistance for education and training.
Schedule 2 to the Bill extends the Junior Minerals Exploration Incentive for a further four years from 2021-22 to 2024-25, with a minor amendment to allow unused exploration credits to be redistributed a year earlier than under current settings.
The Junior Minerals Exploration Incentive provides a tax incentive for new investment in junior exploration companies undertaking greenfields minerals exploration in Australia. Eligible companies can create exploration credits by giving up a portion of their tax losses relating to exploration expenditure, which can then be distributed to new investors as a refundable tax offset or a franking credit.
Greenfields minerals exploration underpins the Australian resources sector by finding new mineral deposits and ensuring a strong investment pipeline of new projects that will support our economy in the future. It is a high-risk activity that can involve large up-front costs and long timeframes before any return on the exploration is made.
In conjunction with Australia's broader support for resources development, the Junior Minerals Exploration Incentive will help to open up new opportunities for the sector into the future.
Schedule 3 to the Bill provides a targeted capital gains tax exemption for granny flat arrangements where there is a formal written agreement in place.
Capital gains tax consequences are currently an impediment to the creation of formal and legally enforceable granny flat arrangements. When faced with a potentially significant capital gains tax liability, families often opt for informal arrangements, which can lead to financial abuse and exploitation for example, following a family or relationship break down.
The changes mean that capital gains tax will not apply to the creation, variation or termination of a formal written granny flat arrangement providing accommodation for older Australians or people with disability. The measure encourages the take up of formal agreements between families, reducing the risk of abuse to vulnerable Australians.
Schedule 4 to the Bill makes technical amendments to the Australian Securities and Investments Commission's product intervention power, so that it can continue to proactively address consumer harm caused by financial and credit products.
This schedule ensures the Australian Securities and Investments Commission can make a product intervention order which imposes conditions relating to the costs (fees, charges or other considerations) of a financial or credit product to a consumer where the product is suspected to cause significant consumer detriment.
The Legislative and Governance Forum on Corporations was notified of the measure as required under the Corporations Agreement 2002 and the National Credit Law Agreement 2009.
Schedule 5 to the Bill ensures that New Zealand maintains its primary taxing right under the Convention between Australia and New Zealand for the Avoidance of Double Taxation with Respect to Taxes on Income and Fringe Benefits and the Prevention of Fiscal Evasion (the Convention). This is in respect of members of New Zealand sporting teams and support staff that spend an extended period of time in Australia to participate in league sporting competitions because of the COVID-19 pandemic.
Due to the circumstances of the COVID-19 pandemic, in order to compete in league competitions in Australia, members of New Zealand sporting teams and support staff may have been required to spend more than 183 days in Australia in a 12-month period. This has led to Australian income tax and fringe benefits tax liabilities which normally would not arise in non-COVID circumstances.
The measure ensures that the Convention operates as intended in this situation by relinquishing Australia's taxing right that has arisen due to COVID-19. This applies to income in the 2020-21 and 2021-22 income years only.
Schedule 6 to the Bill delivers tax relief to low and middle-income earners to support household incomes and create jobs as the economy recovers.
It retains the low and middle income tax offset in 2021-22. The low and middle income tax offset is worth up to $1,080 for individuals and $2,160 for dual income households, which is paid on assessment after taxpayers lodge their tax return.
It is estimated that around 10.2 million taxpayers will benefit from retaining the low and middle income tax offset in 2021-22, with the majority of the benefits delivered to those earning less than $90,000.
This is on top of the $25.1 billion in tax relief flowing to households in 2021-22 that has been announced in previous budgets.
Retaining the low and middle income tax offset will put more money in taxpayers' pockets, allowing them to spend more and strengthen the economic recovery.
Full details of the measures are contained in the Explanatory Memorandum.
Farm Household Support Amendment (Debt Waiver) Bill 2021
The Australian Government is committed to backing our farmers. The Farm Household Allowance (FHA) is a key element of this, ensuring we're looking out for our farmers when times get tough.
Since FHA was introduced in 2014, over $621 million in support payments have been made to over 16,500 farmers and their partners. The FHA is available to farmers and their partners for a total of 1,460 days (4 years) in every 10 years.
As conditions have improved, a cohort of FHA recipients no longer require access to this payment and are now able to preserve access to it for use again, if or when conditions deteriorate.
Right now, there are more people preserving their FHA allocations than there are new entrants.
We have said repeatedly, the story of agriculture is 'just add water'. The government is proud of the resilience of the farming community and their ability to bounce back.
When the 2018 independent review of the FHA recommended improvement, we stepped up. Our response has made it easier for farmers to access the payment when needed, and we increased the support available. These changes are having a real impact for our farming families:
The FHA story is one of change and improvement. Over 90% of respondents to the FHA exit survey advise that they have finished the program with clear expectations for their future. This is what some of them have said:
"It has been a lifesaver, providing basic financial household support which has alleviated depression and anxiety."
"This has been an unbelievable help to improve our viability as a farming business."
"Receiving the FHA helped us educate our son who will more than likely take over the farm with more education than my husband or I had."
Feedback like this demonstrates why it was so important to remove the confusing policy setting of business income reconciliation (BIR) from 1 July 2020.
Farming income is volatile, based on uncertain yields and prices, and unpredictable weather. We asked farmers to make difficult predictions about this income for the year ahead. When farmers, acting in good faith, got this wrong, BIR would make them liable for a debt.
The Farm Household Support Amendment (Debt Waiver) Bill 2021 will address historic BIR cases. We will permanently waive repayment of the majority of BIR debts between 1 July 2015 and 30 June 2020. This will give debt relief to up to 5,300 farmers and their partners.
The Bill will also ensure fairness among recipients by maintaining the 1,460 day limit on payment. FHA recipients who were re-credited days from a previously raised debt, will have the option to trade these days back in order to access the waiver. This means that no one will be able to 'double dip' on their benefit.
Importantly, this Bill will maintain the integrity of the program. It will not allow debts arising from other sources, such as undeclared wages and rental income, to be waived. Existing reporting obligations and regular compliance activities will be maintained.
Though the quantum of the debts to be waived through this Bill are modest, this measure will provide breathing space as our farming families recover from the drought, bushfires, floods and global pandemic of the last few years.
Waiving these debts will ensure that these families retain every dollar possible to help them recover, build resilience and grow their businesses.