Second Reading Speech
Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration)I move:
That this bill be now read a second time.
Schedule 1 to the bill contains measures to ensure that neither land developers nor government agencies that give approval for land development incur a GST liability when capital works or other things are transferred or supplied by a developer to a government agency, or another party, in return for the provision of the development approval.
The schedule contains a measure to allow a transitional special input tax credit to rental car businesses that held rental cars on 1 July 2000 and disposed of them before 1 July 2002. These businesses were adversely impacted by the transition to the GST compared to other businesses. This special credit will partially compensate rental car businesses for these adverse effects. The amount of the special credit will be equal to the GST payable on the sale of cars that were held on 1 July 2000 by rental car businesses.
The schedule also contains measures to allow companies to transfer tax losses, net capital losses and excess foreign tax credits under the income tax legislation without attracting GST. The income tax legislation allows companies to transfer these income tax amounts to members of the same group in certain circumstances. Without this amendment these transfers could be subject to GST.
Schedule 2 amends the income tax law affecting general insurance companies to ensure that the provision for outstanding claims is worked out on a present value basis and that gross premium income is included in assessable income in the year it is received or receivable and net premium income that relates to risk exposure in subsequent years is appropriately deferred.
The schedule also ensures that the provision for outstanding claims of self-insurers in respect of workers compensation liabilities is taxed consistently with the provision for outstanding claims of general insurance companies.
The amendments confirm a longstanding view of the law and protect a substantial amount of revenue that would otherwise be at risk as a result of an adverse court decision.
Schedule 3 broadens the eligibility requirements for accessing the intercorporate dividend rebate for unfranked dividends paid between members of the same wholly owned group.
The proposed amendment extends the eligibility requirements. At the moment, there is a `whole of income year' rule. This will be amended to include cases where the company paying the dividend and the company receiving it are part of the same wholly owned group at all times during the period of 12 months ending on the day on which the dividend was paid.
Full details of the measures in this bill are contained in the explanatory memorandum.
I commend the bill to the chamber and present the explanatory memorandum.
Debate (on motion by Mr Sidebottom) adjourned.