Senate

Suplementary Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)

General outline and financial impact

Amendments to the Minerals Resource Rent Tax Repeal and Other Measures Bill 2014

The amendments to the Minerals Resource Rent Tax Repeal and Other Measures Bill 2014 (the Bill):

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further adjust the proposed amended timetable for increasing the superannuation guarantee (SG) charge percentage to 12 per cent by pausing the SG rate at 9.5 per cent for financial years up to and including 2020-21. The SG charge percentage will then increase by half a percentage point each year, until it reaches 12 per cent for years starting on or after 1 July 2025;

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change the repeal date for the low income superannuation contribution (LISC) so that it applies to concessional contributions made for the 2017-18 financial year and later financial years;

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change the repeal date for the income support bonus (ISB) to 31 December 2016 and make minor technical and consequential amendments as a result of the delayed repeal; and

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change the repeal date of the schoolkids bonus (SKB) to 31 December 2016, and apply an income test for payments of the bonus between Royal Assent of the Bill and the new repeal date.

Date of effect: The amendments to the timetable for increasing the SG charge percentage apply from 1 July 2015.

The repeal of the LISC applies to concessional contributions made for the 2017-18 financial year and later financial years.

The repeal of the ISB applies from 31 December 2016.

The amendments to introduce an additional income test for the SKB apply from Royal Assent and the repeal of SKB applies from 31 December 2016.

Proposal announced: The amendments have not been previously announced.

Financial impact: Amendments to Schedules 7, 8 and 9 will have a financial impact of -$6.6 billion over the forward estimates period.

The amendment to Schedule 6 to the Bill will begin to have a positive impact to the Budget beyond the current forward estimates. By 2022-23 the package of amendments is expected to be Budget neutral.

Human rights implications: The amendments do not raise any human rights issue. See Statement of Compatibility with Human Rights at the end of Chapter 1.

Compliance cost impact: The amendments will result in no additional compliance impacts for individuals, business or other entities.