Second Reading Speech
Mr SUKKAR (Deakin - Assistant Treasurer and Minister for Housing)I move:
That this bill be now read a second time.
This bill gives effect to the tax arrangements required to support the entry into force of the Treaty between Australia and the Democratic Republic of Timor-Leste Establishing their Maritime Boundaries in the Timor Sea.
The treaty was signed on 6 March 2018 and is a historic agreement for Australia and Timor-Leste. This treaty establishes permanent maritime boundaries between our two countries and, importantly, lays the foundation for a new chapter in our relationship with one of our closest neighbours.
The treaty provides benefits for both countries. The government recognises its significance for Timor-Leste and as Timor-Leste's leading economic partner we are committed to supporting them in their economic development.
Under the treaty, certain oil and gas fields in the Timor Sea will transition from joint Australian and Timor-Leste jurisdiction or exclusive Australian jurisdiction to Timor-Leste's exclusive jurisdiction.
This bill fulfils Australia's taxation related obligations under the treaty and provides certainty and security for those affected companies carrying out offshore petroleum operations in the Timor Sea.
This bill ensures that taxation arrangements applying to these transitioned petroleum activities will continue in accordance with annex D to the treaty, which sets out the transitional arrangements for the treaty coming into force.
This establishes a stable framework for resource development in the Timor Sea and provides Timor-Leste with new opportunities for income and continued resource development. It will also strengthen our bilateral relationship with Timor-Leste into the future.
The tax amendments contained in the bill have been prepared, as you'd expect, with substantial consultation with Timor-Leste and the affected companies.
(Quorum formed) I was just saying the full details of the amendments are contained in the explanatory memorandum.
Debate adjourned.
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