House of Representatives

Second Reading Speech

Mr Bradbury (Assistant Treasurer and Minister Assisting for Deregulation)

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 makes a small but important amendment to the definition of 'eligible no-till seeder' for the purpose of the conservation tillage refundable tax offset in subdivision 385-J of the Income Tax Assessment Act 1997. Currently, in order to access the offset, a primary producer must purchase a no-till seeding tool and a cart.

This requirement was included following consultation on the initial measure to ensure that farmers could access the offset on the cart as well. However, it is the ground-engaging tool component that delivers the benefits of conservation tillage practices, while the cart simply carries the seed and fertiliser.

Concerns raised since that initial legislation was passed suggested that the requirement to purchase both the cart and the tool together creates a financial barrier to participation in the tax offset or, conversely, could encourage wasteful behaviour.

The amendment remedies this by ensuring that an eligible no-till seeder can comprise either the tool alone or the combination of the cart and the tool. The measure will apply from the same time as the original measure, 1 July 2012, to the benefit of primary producers wishing to upgrade just their seeding tool.

Schedule 2 phases out the mature-age worker tax offset (MAWTO) from 1 July 2012 for taxpayers who were not already 55 or older on 30 June 2012-that is, those born on or after 1 July 1957.

Those currently eligible because they were aged 55 years or older on 30 June 2012 are unaffected by the change and remain eligible for the MAWTO.

By closing off the MAWTO to new recipients and investing in better targeted participation programs the government will improve value for money while protecting those who have built the MAWTO into their household budgets.

The government is encouraging workforce participation by older Australians through the $26 million Mature Age Participation-Job Seeker Assistance Program. This will provide eligible mature age job seekers aged 55 and over with a peer based environment in which to develop their IT skills, to undertake job specific training and to prepare for work.

The government's $41 million response to the final report of the Advisory Panel on the Economic Potential of Senior Australians includes $10 million for new jobs bonuses that will encourage businesses to employ older Australians who want to stay in the workforce. The $1,000 bonuses will be paid to employers who recruit and retain a mature age job seeker for three months.

The government is also providing a $15.6 million extension of the successful Corporate Champions program to provide support to employers who wish to promote mature aged employment at their workplace.

Schedule 3 amends the excise law by putting in place a robust and sustainable compliance regime for gaseous fuels-that is, liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG)-that recognises that the fuel tax regime applied to these fuels is different from that applying to liquid fuels.

The liquid fuels, petrol and diesel are all subject to fuel tax before leaving licensed premises and entering the market. Fuel tax is subsequently removed if the fuel is used for non-transport purposes by way of fuel tax credits.

However, LPG and LNG that are destined for non-transport use are subject to automatic remissions of tax while non-transport use CNG receives an exemption when it enters the market.

As a result of the different approach for gaseous fuels where untaxed gaseous fuels can be held on unlicensed premises, a different administrative approach is required to ensure that fuel excise is paid when it should be.

The amendments ensure that for duty-free gaseous fuels there are requirements on suppliers, whether licensed or unlicensed, for record-keeping and providing access to ATO officials. There is also an appropriate penalty regime to encourage compliance.

This regime will have lower compliance costs for the gaseous fuels industry than applying fuel tax to all gaseous fuels that enter the Australian market, with subsequent fuel tax credits where appropriate. Businesses that currently comply with their excise and excise-equivalent duty obligations should already be keeping the required records.

The remaining amendments in schedule 3 clarify the tax treatment of gaseous fuels used in forklifts and make it clear that gaseous fuel not directly used in fuel manufacture is subject to duty.

The amendments in schedule 4 make clear how fuel blends will be treated in the future. This is done by clarifying the Commissioner of Taxation's power to make legislative instruments to deal with these situations, rather than relying on legislative rules for exemption. This will provide certainty for the industry, as well as a more flexible and robust approach.

The amendments commence on 1 December 2012.

Schedule 5 amends the list of deductible gift recipients (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 organisation to attract public support for their activities.

Schedule 5 adds one new organisation to the act, namely, the Diamond Jubilee Trust Australia. The Diamond Jubilee Trust Australia has been established to raise funds in Australia for the commemoration of Her Majesty Queen Elizabeth II's Diamond Jubilee. It will collect funds for the purpose of delivering charitable projects for the support and advancement of individuals of all ages, with a focus on the poor and disadvantaged, through supporting the work of the Queen Elizabeth Diamond Jubilee Trust in the UK.

Schedule 6 amends the wine equalisation tax producer rebate provisions to ensure that a wine producer cannot claim a rebate for wine used in manufacture, unless the previous producer or supplier provides a notice that a previous producer is not entitled to the rebate on that wine.

The changes protect the integrity of the rebate by removing the opportunity existing under current legislation for multiple rebates to be claimed on the same quantity of wine. The government has responded to the wine industry's concerns about inappropriate access to the rebate.

The amendments reduce the amount of rebate a producer can claim for acquired wine used in manufacture, unless a notice is received. The amendments provide a voluntary system of notification, where notices state the extent to which the rebate has not been claimed on a sale of wine.

The amendments also prevent multiple claims of the rebate with respect to wine purchased from a New Zealand participant.

The amendments apply to assessable dealings on or after 1 December 2012 or the day on which this act receives royal assent, whichever is the later.

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

Debate adjourned.