Senator FIFIELD (Victoria) (Deputy Manager of Opposition Business in the Senate) (12:35 PM) -I rise to speak on the Tax Laws Amendment (Transfer of Provisions) Bill 2010. This bill makes no policy changes; this bill is about a rewrite. Specifically it seeks to rewrite five provisions from the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953. Essentially the rewritten provisions relate to the collection and recovery of income tax, commercial debt forgiveness, luxury car leases, farm management deposits and general insurance. The bill deals with five schedules which I will outline very briefly.
Schedule 1 of the bill rewrites the remaining sections of part 6 of the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953. Part 6 contains rules about the collection and recovery of income tax including rules about when income tax becomes due and payable, rules allowing the commissioner to make estimates of certain tax debts and to take recovery action based on those estimates and rules imposing penalties on directors of a company that fails to pay certain tax debts.
The rewritten rules of collection and recovery include giving the commissioner power to seek security from a taxpayer for an existing or future tax liability in certain situations such as a serious risk of tax liability not being paid. It also includes expanding security deposit rules to cover all taxes administered by the commissioner and new machinery rules and higher penalties for non-compliance.
Schedule 2 relates to commercial debt forgiveness. It rewrites the remaining schedule 2E to the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997 and contains the rules of the income tax treatment of the gains made when a taxpayer’s debt is forgiven. I know you have been hanging out for that one, Madam Acting Deputy President.
The ACTING DEPUTY PRESIDENT (Senator Hurley)-Indeed!
Senator FIFIELD -Schedule 3 relates to luxury car leases and rewrites the remaining schedule 2E to the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997. Schedule 2E ensures that a lessor and a lessee of a luxury car get the same income tax treatment they would have got had the lessor sold the car to the lessee and lent the lessee the money for the purchase. It is not something I am personally acquainted with or have to do myself, I must say.
Schedule 4 is on farm management deposits. It rewrites the remaining schedule 2G to the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997. This schedule 2G establishes the Farm Management Deposit Scheme that allows eligible primary producers to set aside pre-tax income in profitable years for subsequent withdrawal in low-income years.
The last schedule, schedule 5, relates to general insurance and rewrites the remaining schedule 2J to the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997. Schedule 2J ensures that general insurance companies are taxed on premium income received and can deduct liabilities for outstanding claims over the period of risk under the policies to which the income and deductions relate.
As I stated at the outset, this bill is not about policy change; it is a rewrite. It is about rewriting the archaic and often difficult to interpret rules from the 1936 act into the 1997 plain English act. The coalition supports this bill.
Question agreed to.
Bill read a second time.