Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I table a revised explanatory memorandum relating to the Crimes Legislation Amendment (Psychoactive Substances and Other Measures) Bill 2014 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—

CRIMES LEGISLATION AMENDMENT (PSYCHOACTIVE SUBSTANCES AND OTHER MEASURES) BILL 2014

This Bill will ban the importation of new psychoactive substances and deliver on the key Government election commitment to implement tougher penalties for gun-related crime.

The Bill will also improve Australia's criminal justice arrangements by:

It will also make minor edits to the Commonwealth's drug regime and arrangements for policing in certain airports.

NPS

New psychoactive substances are designed to mimic the psychoactive effects of illicit drugs, however their chemical structures are not captured by existing controls on those drugs. These substances are often presented as 'legal highs'. This may suggest that they are somehow safer than illicit drugs, and that they have been tested or assessed by the government.

This is incorrect. These substances are potentially very dangerous. They have been directly linked to deaths and serious injury. They are untested chemical compounds which masquerade as illicit drugs, but are presented as being legal analogues of those drugs.

New psychoactive substances have been a growing problem for governments in Australia and overseas in recent years. Governments progressively ban these substances as evidence about their use and harm becomes available, yet manufacturers can alter the composition of these substances to avoid the law. The large number of potential new psychoactive substances and their rate of appearance means that we cannot stay ahead of the market.

This Bill changes the dynamic. From now, the Government will be in front. The Bill will introduce offences into the Criminal Code to ban the importation of substances based on their psychoactive effect and where they are presented as alternatives to illicit drugs. It will also amend the Customs Act to allow officers of the Australian Customs and Border Protection Service and the Australian Federal Police to stop these drugs, seize them and destroy them before they can be put on the market.

It will be up to a person whose goods have been seized on suspicion of being a new psychoactive substance to show why they should be returned to them. If an importer cannot do this—for example, by showing that the goods have a legitimate use—their goods will be destroyed.

These measures will not apply to imports for a legitimate purpose. Foods, medicines, industrial, agricultural and veterinary chemicals may all be psychoactive, but they serve important functions in our society and economy. They should not, and will not, be caught up in this regime.

Stopping the sale of new psychoactive substances requires a cooperative effort between the Commonwealth, States and Territories to ensure that health, law enforcement and education initiatives are all aligned. This Bill will complement the national framework for new psychoactive substances that the Law, Crime and Community Safety Council announced on 4 July 2014.

The Bill will stop people from importing these dangerous chemicals for use as alternatives to illicit drugs and pretending they are legal or safe. In combination with State and Territory initiatives under the national framework, we can prevent new psychoactive substances from becoming as great a challenge as other illicit drugs.

Firearms

In the lead up to the 2013 election, the Coalition undertook to implement tougher penalties for gun-related crime. As the Government, we are following through on that promise by creating a more comprehensive set of offences and penalties for the trafficking of firearms and firearm parts.

The entry of illegal firearms into the Australian community can have a significant impact on the size of the illicit market. This growing pool of firearms can be accessed by groups and individuals to commit serious and violent crimes that can result in death. For example, in 2012 firearms were identified as being the type of weapon used in 25% of homicides in Australia [Australian crime: Facts and figures 2013, Australian Institute of Criminology].

Currently, criminals could potentially evade firearms trafficking offences and penalties by breaking firearms down and trafficking their constituent parts. This Bill will close this gap by enabling the conviction of those who engage in the trafficking of firearm parts.

This Bill will also create a new offence in the Criminal Code for international trafficking of firearms and firearm parts, complementing those international trafficking offences already in existence in the Customs Act. This will extend the current cross-border firearms trafficking offences in the Criminal Code, which are limited to trafficking within Australia, to capture the trafficking of firearms (and firearm parts) into and out of Australia.

Finally, the Bill will introduce mandatory minimum sentences of five years' imprisonment for offenders charged for these offences under the Code. The introduction of this type of penalty is appropriate to ensure that high culpability offenders receive sentences proportionate to the seriousness of their offending. However, this mandatory minimum sentence will not carry with it a specified non-parole period, nor will it apply to minors. This will clearly signal the seriousness of the offence, while providing courts with discretion to set custodial periods consistent with the particular circumstances of the offender and the offence.

These amendments create a more comprehensive set of offences and penalties, reflecting the seriousness with which this Government views gun-crime, and the gravity of supplying firearms and firearm parts to the illicit market.

Internation al Transfer of Prisoner Scheme

Australia's international transfer of prisoner scheme promotes the successful rehabilitation and reintegration into society of a prisoner, whilst preserving the sentence imposed by the sentencing country in the prisoner's home country. The scheme is important for community safety as it ensures that prisoners can be reintegrated into that country's community and appropriately monitored, supervised and supported during the enforcement of the sentence.

The International Transfer of Prisoners Act 1997, which governs our international transfer of prisoner scheme, came into operation nearly 20 years ago. While it has been effective in enabling prisoners to be transferred back to Australia and out of Australia to their home country, there are opportunities to make the existing processes governing this scheme more efficient, timely and simplified.

The existing processes will be streamlined by:

These amendments will alleviate existing time and resource burdens whilst appropriately maintaining prisoner's rights.

Slavery

The Bill also makes clear that the slavery offences in section 270.3 of the Criminal Code have universal jurisdiction. Slavery is amongst the most abhorrent of all crimes and this amendment will ensure that Australian law enforcement agencies have the appropriate tools to target this crime wherever it occurs.

Minor Amendments

This Bill will also enhance Australia's anti-money laundering regime though amendments to the Financial Transaction Reports Act 1988 that will simplify the obligations of cash dealers under Australia's anti-money laundering regime, removing duplication and red tape.

The Bill will also validate investigatory action, if any, of the AFP and special members, in relation to State offences having occurred in certain Commonwealth airports during the period between the repeal and passage of Regulations. This Bill will also make a number of minor amendments to correct inaccurate references and grammatical errors in the Code and the Customs Act.

[Conclusion]

The Crimes Legislation Amendment (Psychoactive Drugs and Other Measures) Bill 2014 contains important measures that will ensure that Commonwealth criminal law remains up to date and effective in combating new and emerging illicit drugs, firearms trafficking and corruption, as well as ensuring existing processes for Australia's international transfer of prisoners' scheme are efficient and timely.

TAX AND SUPERANNUATION LAWS AMENDMENT (2014 MEASURES NO.6) BILL 2014

Today I introduce a Bill that implements a range of improvements to Australia's tax laws.

Importantly, this Bill will also help clear more of the backlog of the 92 unenacted tax and superannuation measures we inherited when we came to Government. This, in turn, will provide investment certainty and allow Australian business to actually get on with doing business. And where there is business, there is opportunity.

This Bill includes two measures that were left unlegislated by the former Government: One concerns business restructures, the other concerns investments in managed investment trusts. By taking action on these measures, the Government is delivering much-needed certainty to businesses and investors. Under the Abbott Government, Australia is open for business.

This Bill also supports the reintroduction of fuel duty indexation by ensuring that businesses who claim Fuel Tax Credits or receive grants under the Cleaner Fuels Grants Scheme continue to receive the appropriate level of credits or grants.

Fuel duty indexation will provide a predictable and growing source of revenue that the Commonwealth will use to help deliver the Government's new road infrastructure projects. In the long run, this will assist all businesses by reducing the costs of transporting goods around the country.

This Bill will make it easier for firms to restructure by extending the business restructure roll-over provisions. In the usual course of growing a business, a firm may reach a point where it needs to restructure. However, in some cases, this could result in an income tax liability for the owners of the firm, even though no real change in ownership will take place.

This is where roll-overs are important, because they make it possible for businesses to defer the income tax consequences from a restructure.

These amendments will extend some of the existing roll-over provisions to revenue assets and trading stock, and will also improve how the law operates. By removing income tax barriers to restructuring, the Government is supporting Australian businesses — large and small — to grow and succeed.

This Bill will also make amendments to the Managed Investment Trust withholding tax regime, which will increase certainty and reduce red tape for investors.

This Bill amends the Income Tax Assessment Act 1997 so that foreign pension funds can access the managed investment trust withholding tax regime, as well as the associated lower rate of withholding tax on income from certain Australian investments.

Under the current law, the managed investment trust withholding tax regime does not apply to payments made to a trust without 'presently entitled' beneficiaries.

This means that a payment from an Australian managed investment trust to a foreign pension fund may not fall within the managed investment trust withholding tax regime. As a result, a payment from an Australian managed investment trust to a foreign pension fund may be taxed at the highest marginal tax rate.

The amendments in this Bill mean that foreign pension funds will be treated as the final beneficiary of a fund payment and will have access to the concessional managed investment trust withholding tax.

Allowing foreign pension funds to access the managed investment trust withholding tax regime is both consistent with the original purpose of the regime and with industry practice.

By applying this measure from July 2008 (the date the regime commenced), industry will have certainty about the treatment of foreign superannuation funds that invest in Australian managed investment trusts.

It's all about certainty.

This Bill will also amend the law to give effect to certain taxation arrangements for the United States force posture initiatives, first announced in 2011 by the then-Prime Minister and the President of the United States.

The United States force posture initiatives in Australia currently involve annual rotational United States Marine Corps deployments, and better aircraft cooperation activities in northern Australia. This represents a significant development in Australia's alliance and defence cooperation with the United States.

The Force Posture Agreement, which was signed on 12 August 2014, provides a legal, policy and financial framework to govern United States force posture initiatives in Australia. It contains important protections and assurances for both countries.

For example, it provides an exemption from Australian tax for Australian source income derived by United States contractors in connection with the initiatives in Australia. A legislative amendment to the tax law is required to give effect to this aspect of the Agreement.

The legislative amendment introduced by this Bill will apply only to United States contractors performing duties directly connected with the force posture initiatives in Australia, and not to United States contractors in Australia performing other unrelated duties for the United States Government. The exemption from Australian tax will only apply if the relevant income is taxable in the United States.

The Government remains strongly committed to ensuring that Australian workers and service providers are able to maximise the potential benefits of the United States force posture initiatives in Australia.

This commitment is embodied in the Force Posture Agreement, which obligates United States forces in Australia in connection with the force posture initiatives to strive to use Australian suppliers of goods, products, and services, including Australian workers and Australian commercial enterprises, to the greatest extent practicable, in accordance with United States laws and regulations.

As a result of these United States force posture initiatives, small businesses are likely to benefit from the increased demand for goods and services from the presence of United States personnel on rotational deployment in northern Australia.

The Government is also getting on with calmly and methodically implementing the Budget.

The Government has decided to give practical effect to the fuel excise indexation Budget measure by way of tariff proposals to be validated by Parliament within 12 months.

The Government announced as part of the 2014-15 Budget that it would reintroduce the indexation of fuel duty excise.

Funding constraints at all levels of government have become a significant impediment to the provision of the infrastructure that Australia needs to bolster the productive capacity of the economy and prosperity for the 21st century.

To provide a secure funding source for road infrastructure, the Government is committed to reintroducing the bi-annual indexation of fuel excise to the Consumer Price Index.

To give effect to this commitment, earlier today the Government tabled fuel excise and customs Tariff Proposals.

In difficult budget circumstances, this is the responsible way to immediately start building the productivity-boosting roads Australia needs.

This Bill will make important amendments so that when a tariff proposal increases the rate of fuel duty being collected, businesses who claim Fuel Tax Credits or grants under the Cleaner Fuels Grants Scheme continue to receive the appropriate credit or grant.

These amendments will apply to the tariff proposals tabled earlier today and any future fuel duty tariff proposal.

The amendments to Fuel Tax Credits will continue to ensure that fuel duty is a tax on final consumption of fuel rather than a tax on business inputs.

For those businesses using fuel in off-road operations or operating a vehicle with a gross vehicle mass in excess of 4.5 tonnes, indexation of fuel duty will not increase their business costs. This is because these businesses are able to receive fuel tax credits to offset the fuel duty paid.

This removes the incidence of fuel duty for these business activities and avoids imposing additional costs on business.

If passed quickly, these amendments will ensure businesses will be able to receive Fuel Tax Credits equal to the rate of fuel tax duty specified in the tariff proposal straight away. This will save businesses from having to claim extra Fuel Tax Credits at a later date and avoid any negative cash flow consequences that result from the use of tariff proposals.

The Bill will also make similar amendments to the operation of the Cleaner Fuels Grant Scheme.

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

The measures in this Bill are part of the Government's plan to secure Australia's future. The Government is committed to building a future that is just and prosperous, which means creating the right environment in which Australian businesses can grow and flourish.

The measures in this Bill are part of the Government's commitment to help investors, small business and corporate Australia get on with their jobs and create opportunities so that all Australians can benefit.

Debate adjourned.

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