Second Reading Speech
Mr JONES (Whitlam - Assistant Treasurer and Minister for Financial Services)I move:
That this bill be now read a second time.
Schedules 1, 3 and 4 of this bill will amend our tax laws to provide targeted support to low-income households, primary producers, and small- and medium-sized businesses.
In line with our commitment to provide targeted cost-of-living relief in this year's budget, the bill increases the Medicare levy low-income thresholds for singles, families, seniors and pensioners by 3.9 per cent.
This means that singles with a taxable income of up to $24,276 will not be liable for the Medicare levy. This is an increase of almost $1,000. Similarly, seniors and pensioners will now be able to earn up to $38,365 a year and families can earn up to $40,939 a year without being liable.
The change to thresholds reflects CPI increases, is consistent with increases introduced by previous governments and will support approximately 1.1 million Australians.
The bill also assists our primary producers to reduce their carbon emissions. It does this by providing concessional tax treatment for Australian Carbon Credit Unit income.
These changes will allow more primary producers to access income-averaging schemes that help to distribute uneven income across multiple financial years, and reduce their tax liabilities. Doing so will support primary producers to diversify their businesses into carbon abatement activities.
The bill will also change the taxing point for eligible primary producers holding ACCUs. Instead of being taxed as the value changes each year, they will be taxed in the year of sale - that is, when the capital gain is realised. Doing so will support primary producer's cash flow by ensuring they are only taxed in years where they have received income, further incentivising the use of Australian Carbon Credit Units.
The final tax measure presented in this bill reduces the GDP adjustment factor used to work out the amount of pay-as-you-go and GST instalments payable for the financial 2023-24 income year from 12 per centto six per cent.
Small businesses are the backbone of our nation's economy. They're at the heart of local communities, employ millions of Australians and contribute more than $430 billion to our nation's economy every year. But the Albanese government knows that deadly flooding, bushfires and the COVID-19 pandemic have hit our small businesses hard. That's why our budget delivers for small business.
There will be more small business measures passed in this place in the months to come - but these amendments will provide much needed cash flow relief for small- and medium-sized businesses from as early as 1 July this year.
The reduced GDP adjustment factor of six per cent strikes a balance: it will minimise cash flow impacts, while helping businesses avoid tax debts through the contribution of reasonable tax instalments through the year.
Schedules 2 and 5 of the bill amend access to government guarantees.
As part of the privatisation of the Commonwealth Bank, the Australian government provided a guarantee to ensure that pre-privatisation members would not risk losing their superannuation following a privatisation.
The bill ensures that these members will continue to benefit from the existing guarantees following a planned merger involving CBA super group. This will enable the merger to go ahead, as a superannuation fund trustee can only transfer its members to another fund without their consent if it is satisfied that those members will enjoy 'equivalent rights' in the new fund. This bill is essential to enable those equivalent rates guarantees to be given.
The government supports consolidation in the superannuation industry, where appropriate, as a driver for better member outcomes.
Finally, the bill enables the National Housing Finance and Investment Corporation, soon to be renamed Housing Australia, to provide assistance to more Australians in need.
The previous government's failure to act seriously on housing has led to significant challenges across the economy. Homeownership is out of reach for many ordinary Australians.
The bill will expand assistance to those who have not held a property interest in Australia in the preceding 10 years.
The important thing about this is it will allow those who have fallen out of homeownership, often due to financial hardship or a relationship breakdown, to re-enter the property market with government assistance.
It also expands eligibility for single parents to include single legal guardians of children, such as aunts, uncles and grandparents.
This change recognises the important role guardians play, and the importance that access to housing has for this group. It will help ensure families of different sanctuaries will have a safe and secure place to call home.
The expansion in eligibility recognises the importance of stable and secure housing in providing a foundation for social and economic wellbeing.
Full details of the measures are contained in the explanatory memorandum, and I commend the bill to the House.
Debate adjourned.