House of Representatives
Tax Laws Amendment (2008 Measures No. 2) Bill 2008
Tax Laws Amendment (2008 Measures No. 2) Act 2008
Second Reading Speech
Mr Swan (Treasurer)
That this bill be now read a second time.
This bill makes a number of improvements to Australia's tax and superannuation laws.Schedule 1 addresses a technical inconsistency in the tax law when an amount is misappropriated by an employee or agent after they dispose of an asset on behalf of a taxpayer.
Schedule 2 removes an anomaly in the superannuation guarantee system by extending the superannuation guarantee late payment offset. To reduce the incidence of employers having to pay the same superannuation amount twice, once as a penalty and once the actual superannuation payment has been made, the period within which an employer can make a contribution for their employee after the due date for making the payment and still be eligible to use the late payment offset is extended.
Schedule 3 amends the tax law to ensure that the market value substitution rule does not apply to certain CGT events.
The market value substitution rule ensures capital gains or losses are calculated with reference to the market value of a transaction rather than the actual amount paid. This, in certain circumstances, prevents taxpayers from manipulating the capital proceeds associated with a capital gains tax event, to either reduce capital gains or increase capital losses.
The bill ensures the rule will not apply where a share in a widely held company, or a unit in a widely held unit trust, is cancelled, surrendered or brought to an end in other similar ways when an arms-length transaction has occurred.
This will provide consistency with C2 CGT events and result in fairer treatment of taxpayers who may otherwise end up with a tax bill larger than the proceeds of a cancellation of shares.
Schedule 4 provides an income tax exemption for the Endeavour Executive Award and for all research fellowships under this award.
The amendments allow for consistent tax treatment of the research fellowships by making them all tax free regardless of the full- or part-time status of the recipients.
The program is an internationally competitive, merit based scholarship program, administered by the Department of Education, Employment and Workplace Relations. This program brings leading researchers, executives and students to Australia to undertake study, research and professional development in a broad range of disciplines and enables Australians to do the same abroad.
Schedule 5 exempts from income tax the first $1,000 of eligible early completion bonuses paid by state or territory governments to apprentices where certain conditions are met. For bonuses to qualify for the exemption apprenticeships must be in recognised skill shortage occupations and courses completed within time frames specified in the regulations that will give effect to this measure.
Currently, only the Queensland government pays an early completion bonus to apprentices.
Early completion bonuses seek to alleviate skill shortages in industries that are experiencing strong demand growth by providing an incentive to apprentices to complete their apprenticeships before time. In doing so, this measure will help reduce inflationary pressures caused by skill shortages and improve productivity.
Schedule 6 amends the list of deductible gift recipients in the Income Tax Assessment Act 1997. Deductible gift recipient status will assist the listed organisations to attract public support for their activities. Nine new organisations will be added as deductible gift recipients. Four organisations will have their deductible gift recipient status extended for an additional period of time.
These organisations provide an extremely valuable contribution in various areas of Australian society and I congratulate each of them for their fine work.
I would like to quickly acknowledge each of these organisations by listing the aims of each organisation. In doing so I believe it will become evident why these organisations deserve the support that this amendment will provide them.
The AE 2 Commemorative Foundation Ltd aims to ensure that the Australian World War I submarine HMAS AE 2, currently lying in the sea near Turkey, is preserved and its role in the Gallipoli campaign is appropriately recognised.
The Ian Thorpe's Fountain for Youth Ltd focuses on a range of activities such as:
- improving the health and education outcomes of children, especially Indigenous children;
- improving literacy as a step towards improving the health and life expectancy of children;
- supporting Indigenous cultural education; and
- supporting projects that help to establish or sustain viable business projects for Indigenous communities.
Wheelchairs for Kids Inc. manufactures and distributes wheelchairs to disabled children in many developing countries.
The Amy Gillett Foundation aims to raise awareness of cyclist safety through the use of the media. This foundation's efforts to raise awareness involve a range of communication strategies, conducting education, and funding research.
The Spirit of Australia Foundation is an educational organisation that encourages and facilitates research into and the dissemination of knowledge of Australian history and heritage.
The World Youth Day 2008 Trust is an international youth event to be held in Sydney in July 2008.
The Memorials Development Committee Ltd is an organisation established to develop, design and construct two separate but complementary memorials to World War I and World War II in the Anzac Parade memorials precinct of the Australian Capital Territory.
The Council for Jewish Community Security was established to assist in the provision of security and protection for members and institutions of the Australian Jewish community.
Playgroup Australia Inc. is an organisation which works in conjunction with the eight state and territory peak playgroup bodies to promote playgroup participation for all families with young children. It advocates learning through play and supporting parents through playgroups as an integral part of the early childhood experience.
The Dunn and Lewis Youth Development Foundation was established to assist with the building of a memorial complex dedicated to two victims of the Bali bombing. The complex will provide programs to address chronic issues affecting young people.
The Finding Sydney Foundation is an organisation formed to find the cruiser HMAS Sydney and the German raider HSK Kormoran and to ensure preservation of the war graves and to commemorate the memory with a virtual memorial.
As the House would be aware, HMAS Sydney was finally discovered earlier this week off the coast of Western Australia. The Finding Sydney Foundation will have its DGR listing extended to 1 July 2009 to enable it to help preserve the war graves and commemorate the memory of the men who were lost with these two ships in 1941.
Australia for United Nations High Commissioner for Refugees was established to raise funds in Australia for the UNHCR, and raise awareness locally about the plight of refugees.
Full details of the measures in this bill are contained in the explanatory memorandum.
I commend the bill to the House.
Debate (on motion by Mr Farmer) adjourned.