House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon. P.J. Keating, M.P.)

GENERAL OUTLINE

This Bill will amend:

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the Fringe Benefits Tax Assessment Act 1986 -

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to extend a fringe benefits tax exemption to employers who make contributions to obtain priority of access in certain commercial child care centres (proposal announced in the Budget on 21 August 1990);

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the Income Tax Assessment Act 1936 -

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to modify the availability of capital gains tax roll-over relief for assets acquired before 20 September 1985 and destroyed as the result of a natural disaster (proposal announced in the 1990-91 Budget);

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to extend the availability of the principal residence exemption for capital gains tax purposes during a taxpayer's temporary absence (proposal announced in the 1990-91 Budget);

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to prevent the rollover of the excessive component of an eligible termination payment (ETP) arising from the commutation of the excessive amount of a pension or annuity and to ensure that no part of the unused undeducted purchase price of the pension or annuity can reduce the amount of such an ETP (effective from 1 July 1990);

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to repeal from 1 July 1990, the provisions that reduce the excessive component of an ETP by any non-qualifying component;

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to increase the maximum tax deductions available to people who do not receive any superannuation support from anyone else, with effect from 1 July 1990 (proposal announced in 1989 Budget);

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to remove the discretion given in the law to the Commissioner to treat people who have superannuation support as if they were unsupported (proposal announced 29 June 1990);

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to allow a rebate of tax on superannuation contributions made by employees who do not qualify for tax deductions in respect of their contributions but who, in broad terms, receive only a small amount of superannuation support (proposal announced on 29 June 1990);

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to impose additional tax, by way of penalty, where a taxpayer over-estimates the amount of tax instalment deductions from salary or wages in an application to vary provisional tax (proposal announced in the Budget on 21 August 1990);

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to allow income tax deductions for gifts to The Friends of the Duke of Edinburgh's Award in Australia Incorporated (proposal announced on 20 September 1990);

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to amend the income tax gift provisions to extend until 31 December 1990 the period of tax deductibility for gifts to Australian Vietnam Forces Welcome Home '87 Pty Limited;

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to exempt from income tax the pay and allowances of members of the Australian Defence Force who are allotted for duty in parts of the Middle East in response to Iraq's invasion of Kuwait;

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to ensure that the Act complies, as far as possible, with the provisions of the Sex Discrimination Act 1984 by -

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inserting a definition of "spouse", to include a de facto spouse, to apply generally throughout the Income Tax Assessment Act;

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making certain other amendments to the Act to remove discrimination on the basis of marital status; and

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replacing the daughter-housekeeper rebate with a child-housekeeper rebate;

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the Occupational Superannuation Standards Act 1987 -

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to correct a technical deficiency concerning the time at which a person may quote his or her tax file number to a payer of a superannuation or similar benefit on an Insurance and Superannuation Commission form.

The Bill will also make minor amendments to the Fringe Benefits Tax Assessment Act 1986, the Medicare Levy Act 1986 and the Taxation (Unpaid Company Tax) Assessment Act 1982 as a consequence of the amendments to the Income Tax Assessment Act which the Sex Discrimination Act requires.