House of Representatives

Second Reading Speech

Mr JONES (Whitlam - Assistant Treasurer and Minister for Financial Services)

I move:

That this bill be now read a second time.

Schedule 1 to the bill delivers on the government's 2022 election commitment to double financial penalties that relate to foreign ownership of residential property in Australia.

Noncompliance with the residential land obligations by foreign persons has flow-on implications for Australia's housing stock and housing affordability.

This increase to residential penalties will ensure that these penalties effectively deter foreign persons from contravening the residential land provisions in the Foreign Acquisitions and Takeovers Act 1975.

Schedule 2 to the bill amends the taxation secrecy provisions to enable the ATO to share taxation information with an Australian government agency, including state and territory governments, for the purposes of administering major disaster support programs.

This measure will assist Australian government agencies to address the needs of individuals and businesses significantly disrupted by a major disaster event more efficiently and effectively.

The sharing of taxation information will only be authorised if the Treasurer is satisfied that the program supports individuals and businesses affected by a major disaster.

Schedule 3 to the bill extends the operation of a temporary mechanism that has been operating during the COVID pandemic which allows arrangements for complying with information and documentary requirements under Commonwealth legislation to be altered, including requirements to give information in writing and produce, witness and sign documents.

These provisions address continuing difficulties experienced by individuals, businesses and government agencies in complying with information and documentary requirements, including requirements to witness and sign documents.

The mechanism is temporary. It will expire at the end of 2022. The effect of this measure will be to continue the operation of these provisions until the end of 31 December 2023. Any determination made under the mechanism will cease to operate after 31 December 2023.

Schedule 4 to the bill makes amendments to set out tax arrangements of foreign resident workers participating in the Pacific Australia Labour Mobility, also known as the PALM scheme.

The PALM scheme will help meet workforce shortages in Australia as well as support the economic development of Pacific nations and Timor-Leste.

Under the new PALM scheme, eligible businesses can recruit workers to help fill unskilled, low and semi skilled workforce shortages in any sector, including the agriculture, meat processing, hospitality and tourism sectors, mostly in rural and regional areas.

Schedule 4 specifies that foreign resident workers participating in the PALM scheme will pay a final withholding tax of 15 per cent for each dollar of income earned under the scheme from the 2022-23 income year. PALM scheme workers who are Australian residents for tax purposes will, of course, pay ordinary resident tax rates.

This ensures that such workers pay tax at an appropriate rate on program income, consistent with similar migration programs.

Schedule 5 to the bill will require the Australian Prudential Regulation Authority to take account of religious obligations when conducting the performance test on superannuation products.

Trustees will now be able to apply to have their faith based products face a supplementary test that considers their faith based investment strategy if they fail the original test. A faith based product that passes this supplementary test will not be subject to the consequences of failure.

Faith based products will not escape scrutiny under this amendment. Products will be assessed to ensure that their investment is in accordance with their faith based investment strategy. Faith based products that fail both the original and supplementary test will face the same consequences as any other product.

This measure was a 2022 election commitment, reflecting Labor's commitment to working with communities of faith.

In developing this measure, I met and spoke with faith leaders around Australia. They spoke to me about the importance of being able to live their faith in every part of their lives.

This is why this measure is so important. It will ensure that Australians of faith are able to participate fully in our superannuation system without compromising on their values or on performance standards.

I know that many Australians of faith are watching today to see whether this parliament supports them.

These changes to the performance test will strike a balance. The amendments give members back the ability to invest in faith based products while continuing to hold trustees to account for the investment performance they deliver and the fees they charge to members.

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

Debate adjourned.