House of Representatives

Second Reading Speech

Mr Shorten (Assistant Treasurer and Minister for Financial Services and Superannuation)

I move:

That this bill be now read a second time.

This bill amends various taxation laws to implement a range of improvements to Australia's tax laws.

Schedule 1 amends the list of deductible gift recipients or DGRs in the Income Tax Assessment Act 1997. Taxpayers can claim income tax deductions for certain gifts to organisations with DGR status. DGR status will assist the listed organisations to attract public support for their activities.

This schedule adds two new organisations to the act, namely, the Charlie Perkins Trust for Children & Students and the Roberta Sykes Indigenous Education Foundation. The Charlie Perkins trust was established in 2002 in memory of the late Dr Charlie Perkins AO, and its purpose is to advance the education of Aboriginal and Torres Strait Islander people through the provision of scholarships to Indigenous people for study at overseas institutions, such as Oxford and Cambridge universities.

The Roberta Sykes Indigenous Education Foundation works to advance the education and life opportunities for Aboriginal and Torres Strait Islanders, and provides additional assistance to female Indigenous scholars undertaking programs overseas, such as assisting with the cost of relocating families and partners.

Schedule 2 amends the Superannuation Industry (Supervision) Act 1993 to allow regulations to prescribe rules in relation to investments in collectables and personal use assets by self-managed superannuation funds.

During the 2010 election the government committed to allowing self-managed superannuation fund trustees to continue to invest in collectables and personal use assets provided that they comply with tighter legislative standards. This commitment balanced the recommendations made by the panel of the recently concluded Super System Review, chaired by Jeremy Cooper, and concerns raised by the self-managed superannuation funds industry.

The amendments will allow the regulations to make rules relating to how self-managed superannuation fund trustees make, hold and realise investments in collectables and personal use assets. The purpose of the rules will be to ensure that these investments are made for retirement income purposes, not current day benefit. The content of the regulations is being developed in consultation with the industry.

The amendments will also remove a reference to a provision that was repealed on 24 September 2007.

Schedule 3 allows superannuation fund trustees and retirement savings account providers to use tax file numbers to locate fund member accounts without first using other methods and to facilitate the consolidation of multiple accounts.

These amendments will be subject to appropriate privacy safeguards.

This measure is a part of the government's Stronger Super reforms, which I announced on 16 December 2010. Allowing for greater use of tax file numbers is the first of a number of initiatives from that package that will improve the administrative efficiency of the superannuation industry.

Regulations will be enacted to support the use of tax file numbers in facilitating the account consolidation process. This will include requirements for member consent and other procedures and processes that superannuation fund trustees and retirement savings account providers must follow before consolidating accounts.

In keeping with the current guidelines governing the use of tax file numbers, it will remain voluntary for individuals to provide their tax file number to their superannuation fund or retirement savings account provider.

Schedule 4 replaces the current mechanism for ensuring Australian taxes, fees and charges are not subject to the GST, with a legislative exemption.

The government's decision to replace the current mechanism was announced in the 2010-11 budget on 11 May 2010.

This schedule replaces this inefficient system by amending the GST Act to allow entities to self-assess the GST treatment of a payment of an Australian tax or an Australian fee or charge.

Under these amendments, government entities will no longer need to have Australian taxes or Australian fees or charges listed on the determination in order for them to not be subject to GST.

Finally, schedule 5 includes minor amendments to the tax laws.

These amendments ensure that the law operates as intended by correcting technical or drafting defects, removing anomalies, and addressing unintended outcomes. These amendments are part of the government's commitment to the care and maintenance of our tax laws.

This package also includes some legislative issues raised by the public through the Tax Issues Entry System, or TIES for short.

Full details of the measures in this bill are contained in the explanatory memorandum.

Debate (on motion by Mr Turnbull) adjourned.