Monday, 20 June 2011
Tax Laws Amendment (2010 Measures No. 5) Bill 2010; Second Reading
Debate resumed on the motion:
That this bill be now read a second time.
I firstly want to acknowledge my colleague Senator McLucas, who was handling this before the lunch adjournment. I will conclude the government's contribution to the second reading debate. Senator McLucas had referred to schedule 3, which will benefit affected taxpayers by insuring they will not be left worse-off by effectively losing some of their main residence exemption if part of their adjacent land is compulsorily acquired without the dwelling also being acquired.
Schedule 4 amends the tax laws to allow superannuation funds and retirement savings account providers to claim a income tax deduction for the cost of insuring the liability to provide terminal medical condition benefits to superannuation fund members and RSA holders. The amendment rectifies an anomaly in the tax law. The superannuation law was amended in February 2008 to include the terminal medical condition of release. This allows superannuation funds and RSA providers to provide benefits to members if the member is expected to pass away due to a terminal medical condition within 12 months. Superannuation funds and RSA providers are able to deduct the cost of providing benefits relating to the permanent incapacity condition of release and for the payment of death benefits. However, no associated deduction has been allowed for the cost of providing terminal medical condition benefits. Accordingly, this amendment will provide consistent tax treatment for similar insurance arrangements. Schedule 4 also makes some minor amendment to reflect the drafting convention that a human being should be referred to by the term 'individual' rather than the term 'person'.
The amendments contained in schedule 5 confirm the Commissioner of Taxation's interpretation of the GST law in allowing non-profit subentities to access the GST concessions available to their parent entity. As part of the amendments, non-profit subentities will be allowed to access the higher registration turnover threshold of $150,000 for non-profit bodies. The amendments take effect from the start of the first tax period after royal assent.
Schedule 6 amends the taxation administration legislation to provide that it will not be mandatory for the Commissioner of Taxation to apply a payment, credit or running balance account surplus against a tax debt that is a BAS amount unless the amount is due and payable. The schedule gives effect to recommendation 39 of the Board of Taxation's review of the legal framework for the administration of the goods and services tax, reducing compliance costs and unnecessary complexity for taxpayers.
Schedule 7 provides additional assistance for education expenses for eligible parents and carers of school age children. These amendments will expand the education tax refund to allow parents and carers to receive a refundable tax offset of up to 50 per cent for school uniform expenses from 1 July 2011. Extending the education tax refund to school uniforms builds on the education tax refund the government first introduced in July 2008, allowing parents and carers to claim a refund for laptops, home computers, printers, computer software, stationary and trade tools. The government is conscious that exactly what comprises a school uniform will vary from school to school, and has provided flexibility in the legislation to deal with various arrangements. As the education tax refund is a refundable tax offset, even if you do not pay tax you will be able to benefit from the government's decision to extend the education tax refund to cover school uniforms. The bill deserves the support of the parliament. I commend the bill to the Senate.
Question agreed to.
Bill read a second time.