Paul Scarr (Queensland, Liberal Party) | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Wong. Yesterday, my friend and colleague Senator Dean Smith asked you about the impact of Labor's proposed trust tax on Australian charities and not-for-profit organisations. It has been estimated that these changes could cost charities and not-for-profits $2.9 billion in lost giving over the next five years. Minister, you've now had overnight to get the answer. I recognise it's not your portfolio. Will you guarantee today that Australian charities and not-for-profits will not lose out because of Labor's tax changes? Yes or no?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

I thank Senator Scarr for the question. I have a great deal of respect for that senator, but I would disagree; I thought I answered it—in relation to Senator Smith's question. I'm not sure I do have anything further to add, but I will just reiterate what I have been advised. First, the government has made amendments to ensure deductible gifts and donations reduce capital gains that are subject to the minimum tax, to maintain tax incentives in relation to charitable giving. I think I mentioned in response to Senator Smith that the budget papers did make clear that minimum tax would not apply to charitable trusts. I also made clear that DGR status would continue to be tax deductible for discretionary trusts. I think I also said that we are consulting on a range of implementation details around the minimum tax on trusts, and that includes the appropriate arrangements for donations, distributions to charities and other tax exempt entities.

I'm not sure there's anything further I can give you on that, because this is subject to the consultation process that I referenced when I responded to Senator Smith. But, as always, if you would like me to see if there's anything further I can add, I would be happy to do so.

Sue Lines (President) | Link to this | Hansard source

Senator Scarr, first supplementary?

Paul Scarr (Queensland, Liberal Party) | Link to this | Hansard source

Minister, I would like you to obtain further advice because it is concerning that the advice you're being given is not engaging with the fundamental point, that this arises out of a change to the tax arrangements on discretionary trusts. The majority of charitable giving is not made on a tax deductible basis. It's estimated that 70 per cent of donations fall outside that category. So why did the government announce this tax change without first working out what it would mean for the charitable sector?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

I think that's what I was referencing in my first answer—that is, the amendments that the government has made to ensure that donations and deductible gifts reduce capital gains subject to the minimum tax. The purpose of that, as I understand it—obviously, these are matters in the Treasury portfolio—is to maintain the taxation incentives which currently exist in relation to charitable giving.

Sue Lines (President) | Link to this | Hansard source

Senator Scarr, second supplementary.

Paul Scarr (Queensland, Liberal Party) | Link to this | Hansard source

Again, Minister, with all due respect—though you acknowledge, and I recognise, it's not your portfolio—it's not engaging with the fundamental point. Seventy per cent of charitable giving is not on a deductible gift basis. That's the issue. So the change in the taxation of discretionary trusts will have a negative impact estimated at $2.9 billion. Again, I ask you: will you guarantee today that not $1 of charitable giving will be lost because of Labor's tax changes?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

Thank you for the outline of the issue. As you would know, a number of these changes do not come in for some time, and I have outlined in response—

Anne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) | Link to this | Hansard source

Yes or no?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

Senator Ruston—I'm looking forward to her contribution in this debate.

Honourable senators interjecting—

Sue Lines (President) | Link to this | Hansard source

Order!

Senator Ayres, order applies to you.

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

A number of these changes do not come in for some time, as you would know. The advice I have is the government is—

Honourable senators interjecting—

Sue Lines (President) | Link to this | Hansard source

Senator Bragg, I've called for order.

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

Actually, it was Senator Smith.

Sue Lines (President) | Link to this | Hansard source

I beg your pardon, it was Senator Smith. Apologies, Senator Bragg.

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

He was actually quiet. As I indicated, we are consulting on a range of implementation details around the minimum tax on trusts, and that includes the— (Time expired)