House of Representatives

Second Reading Speech

Mr Bowen (Minister for Competition Policy and Consumer Affairs, and Assistant Treasurer)

I move:

That this bill be now read a second time.

This bill abolishes income tax deductions for political contributions and gifts. It was an election commitment by the new government to remove tax deductibility for donations made to political parties. Independent candidates and independent members would also be covered. This commitment was made as part of 'Labor's $3 Billion Savings Plan', which was announced on 2 March 2007.

This measure saves just over $10 million per annum.

In addition, this bill ensures that political parties, independent members and independent candidates will not lose access to certain GST concessions to which they may be currently entitled as a consequence of the removal of income tax deductibility for gifts or contributions.

This measure was introduced as part of Tax Laws Amendment (2008 Measures No. 1) Bill 2008 earlier this year but was rejected in the other place.

I strongly urge the opposition to reconsider their approach to this measure which forms part of the government's response to inflationary pressures in the economy and our savings plan. This measure and other savings measures are an important component of our effort to put downward pressure on inflation and interest rates.

Full details of the bill are contained in the explanatory memorandum. I strongly commend the bill to the House.

Debate (on motion by Mrs Bronwyn Bishop) adjourned.