House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello MP)

General outline and financial impact

Project Wickenby taskforce

Schedule 1 to this Bill amends the secrecy and disclosure provisions in the Taxation Administration Act 1953 to allow the Commissioner of Taxation to make disclosures of taxpayer information to Project Wickenby taskforce officers and to officers in other taskforces that may be prescribed in the regulations. Project Wickenby is a multi-agency taskforce addressing alleged tax avoidance and evasion involving the use of offshore entities.

Date of effect: These amendments apply to disclosures of information to Project Wickenby and other prescribed taskforces made on or after the date of Royal Assent.

Proposal announced: These amendments were announced in the Treasurer's Press Release No. 91 of 17 August 2006.

Financial impact: Nil.

Compliance cost impact: Nil.

Disclosure of information relating to superannuation guarantee complaints

Schedule 2 to this Bill amends the Superannuation Guarantee (Administration) Act 1992 to enable the Commissioner of Taxation or an officer of the Australian Taxation Office to provide information to an employee in response to a complaint that an employer has not complied with its obligations under the Act.

Information may be disclosed for the purposes of the Superannuation Guarantee (Administration) Act 1992 or in the performance of duties under the Act.

Date of effect: These amendments apply to records made, or information divulged or communicated, on or after 1 July 2007.

Proposal announced: This measure was announced in the 2006-07 Budget by the Minister for Revenue and Assistant Treasurer in Press Release No. 15 of 9 May 2006.

Financial impact: This measure has a budgetary cost of $19.2 million over four years.

Compliance cost impact: Nil.

Employee share schemes and stapled securities

Schedule 3 to this Bill amends the Income Tax Assessment Act 1936 and other tax Acts to extend the employee share scheme (ESS) concessions and related capital gains tax treatment to certain stapled securities that include an ordinary share, and that are listed for quotation on the official list of the Australian Securities Exchange.

When a company does not have any unstapled ordinary shares on issue (because all of the company's ordinary shares have been stapled to other interests) it is difficult to provide employees with access to the ESS concessions because the components of the stapled security will need to be treated separately - shares under the ESS provisions, and other interests being subject to fringe benefits tax.

This measure allows more employers to offer ESS to their employees by extending access to the concessions and reducing the associated complexity.

Date of effect: 1 July 2006.

Proposal announced: This measure was announced in the 2006-07 Budget and in the Treasurer's Press Release No. 039 of 9 May 2006.

Financial impact: This measure is estimated to cost a total of $70 million over the period 2006-07 to 2009-10 as follows:

Compliance cost impact: This measure is expected to reduce complexity and compliance costs.