Rod Kemp (Victoria, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

I table a revised explanatory memorandum relating to the Tax Laws Amendment (Personal Tax Reduction and Improved Depreciation Arrangements) Bill 2006 and move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

ASIO LEGISLATION AMENDMENT BILL 2006

This bill amends Division 3 of Part III of the Australian Security Intelligence Organisation Act 1979 which deals with ASIO’s terrorism-related questioning and detention powers.

Those powers were introduced into Parliament in 2002 as part of the Government’s broad legislative package to counter the threat posed by terrorism.

After extensive parliamentary debate, the powers commenced in July 2003.

The regime permits ASIO to seek a warrant to question, and in limited circumstances detain, a person where there are reasonable grounds for believing that doing so will substantially assist the collection of intelligence in relation to a terrorism offence.

The powers are only used where other methods of gaining that intelligence would be ineffective.

Experience with the questioning regime has shown that it is yielding valuable information in an environment of stringent safeguards and accountability mechanisms, and is proving to be a useful tool in the fight against terrorism.

Parliament enacted ASIO’s questioning and detention powers subject to a review by January 2006 by what is now the Parliamentary Joint Committee on Intelligence and Security (PJC), and a sunset clause by which the powers would cease to operate after 22 July 2006.

During 2005, the PJC conducted a comprehensive review of the operation, effectiveness and implications of the powers.

I thank the Committee for its detailed examination of the issues and welcome its report which was tabled in November 2005.

I note that the PJC concluded that for the foreseeable future there are threats of possible terrorist attacks in Australia and that some people in Australia might be inclined or induced to participate in such activity.

I am pleased that the PJC recognised that the questioning regime has been useful in dealing with this situation, and that the powers have been used within the bounds of the law and they have been administered in a professional way.

On this basis, the PJC recommended that the powers should continue beyond the sunset period, and made 19 recommendations aimed at improving the operation of the regime.

The Government has given careful consideration to all the PJC’s recommendations, and is responding in a way that addresses the Committee’s concerns so far as possible.

The Government has agreed to clarify the regime and enhance rights and safeguards where doing so would not undermine the fundamental nature and purpose of the regime, nor impact unduly on its operation.

The Government has responded positively to the bulk of the recommendations.

In addition, we have sought to address concerns in alternative ways where the PJC’s recommendation is unable to be implemented in the terms proposed.

This bill implements the Government’s response to the PJC’s report.

A key feature of the bill is to amend the current sunset provision, which would otherwise cause the questioning and detention powers to cease after 22 July 2006.

The Government accepts the PJC’s arguments about the need for ongoing review and a further sunset period, but considers that the 5½ year period recommended by the PJC is insufficient.

We consider a 10 year period to be more appropriate.

Recent experience with statutory reviews has demonstrated they are resource-intensive and have an impact on operational priorities.

The 10 year period is consistent with State and Territory Government views about the time needed to properly make an assessment of recently enacted anti-terrorism legislation.

The longer period will also ensure that the legislation can be used over a period the Government assesses there is likely to be a need for these powers.

Accordingly, the bill extends the sunset and PJC review period by 10 years, so that the PJC will be required to review the legislation by 22 January 2016 and the legislation will cease to have effect on 22 July 2016.

Of course the Government will also continue to assess the operation of the legislation in light of practical experience and will review its effectiveness on an ongoing basis.

In responding to the PJC recommendations, the bill also seeks to improve the clarity and operation of the two types of warrant regime—warrants for questioning, and warrants for questioning and detention.

Schedule 1 of the bill renumbers the provisions, and more clearly sets out provisions dealing with only questioning from those that deal with questioning and detention.

The items in Schedule 1 do not affect the substantive operation of the regime.

Schedule 2 of the bill contains amendments that will strengthen and clarify rights under the regime.

One of the key amendments involves making explicit rights of contact for the subject of a warrant.

The bill will insert a positive right of a subject to contact a lawyer under both types of warrant, whereas at present there is only an explicit right to do so under a warrant authorising detention.

This does not mean that the subject of a questioning-only warrant is not currently entitled to contact a lawyer—in fact they are able to do so; it is just that the right is not explicit in the legislation.

Consistent with the existing policy rationale and the PJC’s recommendation, ASIO will be able to challenge a lawyer being present during questioning on security grounds where the subject is detained in connection with a questioning-only warrant.

The bill will also insert a provision to make it clear that communications between a subject and their lawyer are not required to be made in a way that can be monitored in the case of questioning-only warrants (unless there is detention in connection with that warrant).

In addition, the ability of the subject’s lawyer to address the prescribed authority during breaks in questioning will be made clear in the legislation.

This enables a subject to raise any matter with the prescribed authority through their lawyer.

The bill will also clarify and better facilitate the ability of subjects of both kinds of warrants to make complaints, particularly in the questioning-only context, and to a wider range of complaints bodies.

As part of this package of amendments, the secrecy provisions will be amended to cater for disclosures to State and Territory complaints bodies.

The secrecy provisions will also be amended to require the prescribed authority, the Director-General, and the Attorney-General to take into account certain issues in deciding whether to permit disclosures.

Those issues are the person’s family and employment interests, the public interest, and the risk to security if the disclosure were made.

The bill will make other changes to enhance the rights of the subject.

These include requiring the prescribed authority to more clearly explain his or her role, so that the subject is aware of the independent supervisory role of the prescribed authority in the proceedings.

The bill will also provide for a person to have a statutory right to apply for financial assistance for reasonable legal and related costs arising from the questioning proceedings.

These measures, combined with some other changes in response to the PJC and other minor corrective changes, will clarify and strengthen the effectiveness of ASIO’s questioning and detention regime.

At the same time, the measures contained in the bill maintain an appropriate balance with civil liberties by enhancing safeguards and conferring more explicit rights on persons questioned or detained under the regime.

The questioning and detention regime needs to operate effectively if ASIO is to continue to have the best suite of tools at its disposal for working together with other agencies to prevent a terrorist attack in Australia.

For these reasons, I commend this bill.

TAX LAWS AMENDMENT (PERSONAL TAX REDUCTION AND IMPROVED DEPRECIATION ARRANGEMENTS) BILL 2006

Personal Income Tax Reductions

The measures contained in this bill will cut personal income tax for all Australian taxpayers from 1 July 2006. The tax cuts are another step in comprehensive tax reform that has seen income tax cut previously in 2000, 2003, 2004 and 2005.

From 1 July this year, the Government will reduce the 47 and 42 per cent rates to 45 and 40 per cent respectively. This builds on reductions to lower income rates in earlier years.

In addition, the Government will increase the thresholds so that the 15 per cent rate will apply up to $25,000, the 30 per cent rate up to $75,000, the 40 per cent rate up to $150,000 and the 45 per cent rate will apply to income above that.

The Government will cut the fringe benefits tax rate from 48.5 per cent to 46.5 per cent to ensure that the FBT rate aligns with the top marginal tax rate, including the Medicare levy.

The low income tax offset will be enhanced by increasing it from $235 to $600. It will begin to phase out at $25,000 from 1 July 2006, compared to $21,600 currently. This means that those eligible for the full low income tax offset will not pay tax until their annual income exceeds $10,000.

The Medicare levy low income phase-in rate will be cut from 20 per cent to 10 per cent, ensuring more low income taxpayers pay a reduced rate of Medicare levy.

Senior Australians who are eligible for the Senior Australians Tax Offset will now pay no tax on their annual income up to $24,867 for singles and up to $41,360 for couples.

Overall, in percentage terms, the greatest tax cuts have been provided to low income earners. These tax changes will ensure that more than 80 per cent of taxpayers face a top marginal tax rate of 30 per cent or less over the forward estimates period.

The increase in the 30 per cent threshold and the low income tax offset will provide more incentive for those outside the workforce to re-enter it and those on part-time work to take additional hours.

Moreover, a taxpayer will need to earn $121,500 to pay an average tax of 30 per cent.

From 1 July 2006, the top marginal tax rate will apply to around two per cent of taxpayers. Taxpayers will not reach the highest marginal tax rate until they earn more than three times average weekly earnings.

Reducing the top marginal tax rate and significantly increasing the top threshold will improve the competitiveness of Australia’s tax system compared with other OECD countries. Australia’s top marginal tax rate will be in line with the OECD average and the increase in the top threshold will place Australia tenth highest in the OECD.

Six years ago, the threshold for the top marginal tax rate was $50,000. If the threshold for the top marginal tax rate had been indexed in 1996, it would have stood below $64,000 by 1 July this year. Under the Government’s reforms, by 1 July this year that threshold will be $150,000.

This package provides $36.7 billion of benefit to taxpayers over four years and reinforces Australia’s reputation as a low-tax country. These tax cuts significantly restructure the personal income tax system, to increase disposable incomes, to enhance incentives for participation and to improve Australia’s international competitiveness.

Business Tax

This bill also implements the 2006-07 Budget measure that will substantially improve Australia’s depreciation arrangements by increasing the diminishing value rate for determining depreciation deductions from 150 per cent to 200 per cent. This will cut business tax by $3.7 billion over the next four years.

The effect of the measure is to provide the equivalent of a 33 per cent increase in the allowable depreciation rate for all eligible assets.

This will increase incentives for Australian business to invest in new plant and equipment and make it easier for businesses to keep pace with new technology and remain competitive. Investment is a key element of productivity growth and hence of economic growth.

The increased depreciation rates under the diminishing value method align depreciation deductions for tax purposes more closely with the actual decline in the economic value of an asset which will lead to improved resource allocation in the economy. This is consistent with the Government’s tax policy strategy of ensuring that the tax system has minimal effect on the allocation of resources in the economy.

The measure will apply to assets acquired on or after 10 May 2006 and includes appropriate integrity measures to ensure assets held prior to that date are not able to be brought into the new arrangements.

Full details of these measures in this bill are contained in the explanatory memorandum.

I commend the bill.

Debate (on motion by Senator Kemp) adjourned.

Ordered that the resumption of the debate be an order of the day for a later hour.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.