TAX LAWS AMENDMENT (2008 MEASURES NO. 2) BILL 2008

I rise to support the Tax Laws Amendment (2008 Measures No. 2) Bill 2008. Like the member for Blair I feel bound to comment on the extraordinary contribution made by the member for Bowman, the previous speaker from the opposition, to this debate. The member for Bowman managed to say nothing about the bill before the House and spent his time railing against imagined faults in the budget announced last night. By contrast, the member for Blair has addressed the bill and I propose to do the same thing.

I rise to support the Tax Laws Amendment (2008 Measures No. 2) Bill 2008. Like the member for Blair I feel bound to comment on the extraordinary contribution made by the member for Bowman, the previous speaker from the opposition, to this debate. The member for Bowman managed to say nothing about the bill before the House and spent his time railing against imagined faults in the budget announced last night. By contrast, the member for Blair has addressed the bill and I propose to do the same thing.

This is a bill which will amend Australian tax laws to fairly recognise the loss a taxpayer receives as a result of having an amount misappropriated from them. Secondly, it is a bill which will improve Australian superannuation laws by ensuring that employers are not harshly penalised for failing to pay their superannuation contributions on time. Thirdly, the bill will ensure that taxpayers are treated fairly by only paying their capital gains tax on the amount they actually receive from a transaction. The bill will also ensure consistency in taxation treatment of Endeavour Awards, a merit based scholarship program administered by the Department of Education, Employment and Workplace Relations.

I want to deal first with schedule 2 of the bill because that amends the Superannuation Guarantee (Administration) Act 1992 to further extend the period within which an employer can make the required superannuation guarantee contributions after the formal due date and still be eligible to use the superannuation guarantee late payment offset. Effectively, this means that employers who make a very late superannuation guarantee payment will not be required to pay twice the required amount. At present, an employer who fails to make the required superannuation guarantee payment after the due date is potentially liable to pay the required superannuation guarantee contributions twice. This occurs where the employer makes a late payment into their employees’ superannuation fund after the end of the second 28-day period and is then liable to pay the ATO the relevant superannuation guarantee charge.

The amendment contained in the bill has as its aim the removal of an anomaly in the superannuation guarantee system that imposes harsh penalties on employers who pay their superannuation contributions late. This was a very common complaint from employers to Labor’s superannuation spokesman when we were in opposition. Labor pushed the then coalition government for the changes that are contained in this bill in relation to superannuation guarantee contributions. As with so much else, the coalition promised to act on the matters that employers and industry were calling for but had not done so at the time that the last election was called. The measure in relation to superannuation guarantee contributions, which forms part of this bill, is part of Labor’s agenda of supporting small business. It removes an anomaly that many employers had been concerned about. Labor is listening to small business and the concerns of employers.

This bill also seeks to exempt income tax from the first $1,000 of early completion bonuses received by apprentices from state governments. As the member for Blair has already pointed out, this is a Queensland initiative, which I acknowledge. It is a good initiative and it is something that I hope will be extended by other state governments for the early completion of apprenticeships. The tax measure now being introduced will assist other state governments to introduce the scheme introduced in Queensland. The amendment ensures that apprentices will not have to pay tax on the bonus they receive for completing their apprenticeships early.

The amendment is needed because income tax law would otherwise treat remuneration for services, which is what this is, as part of ordinary income. That would mean that payments that are very much one-off and in the nature of a bonus, like this early completion bonus, would be taxable as ordinary income. And of course what that means is that some of the incentive that is sought to be provided by schemes of this nature for early completion will be removed. This amendment ensures that the full amount of the bonus remains in the hands of the apprentice who is keen enough to finish her or his apprenticeship early.

In a time such as now of skills shortages in critical areas it is essential that we provide as many incentives as possible for workers to receive training and to speedily complete their training. We face a shortage of more than 200,000 skilled workers in Australia over the next five years. The Rudd Labor government is committed to closing the skills gap by expanding places in a more responsive vocational education and training system. As announced in the budget last night, the government will provide $1.9 billion over five years to deliver up to 630,000 new training places and that includes of course 85,000 apprenticeship places.

We are also committed to ensuring that not only programs like that but also associated legislation such as this bill are put in place to ensure that training to help ease the skills shortage is delivered in a way that ensures that those who are training are not worse off. As the Treasurer has stated on numerous occasions, we face significant inflationary pressures and that has driven up the prices of petrol, housing and groceries. The government understands how this affects working families. We realise that every single dollar counts and amendments like this, which seek to tax-exempt the bonus for early completion of an apprenticeship, will ensure that there is more money back in the pockets of workers and working families, including apprentices.

The other part of this bill that I wanted to address is some, but not all, of the deductible gift recipients who are now to be added to schedule 30 of the legislation. I will take some time to discuss how all of these recipients are very deserving organisations for deductible gift recipient status, but I want to deal with some in particular.

The first is the Amy Gillett Foundation. It is a fact that the manner in which cyclists and motorists share the roads is the subject of negative media stories more often than one would wish to see. I am convinced that the majority of motorists do show cyclists the due respect that they deserve. But unfortunately, as we have seen from a spate of recent stories from Sydney, there are always individuals who disappoint. Road rage incidents surrounding cyclists are entirely unacceptable and there does need to be an active education and awareness campaign for the public. I am very glad therefore to see that the Amy Gillett Foundation is one of the deductible gift recipients that has been added to the tax legislation by this bill.

The Amy Gillett Foundation was inspired by the life of Amy Gillett, who was tragically killed while training in Germany in July 2005. She was an Olympic rower who moved to cycling, and her life was ended at the tragically young age of 29. The terrible accident in which she was killed severely injured and jeopardised the careers of Katie Brown, Lorian Graham, Kate Nichols, Alexis Rhodes and Louise Yaxley—all then members of the Australian Institute of Sport’s elite cycling squad. The Amy Gillett Foundation seeks to reduce the incidence of injury and death caused by interaction between cyclists and motorists. It does that by raising awareness, educating cyclists, conducting research, fundraising and influencing public policy. It also conducts an annual ride called Amy’s Ride, which is a fundraising ride held in Victoria on the Bellarine Peninsula around Geelong. It is also designed to promote key messages of safe and responsible road use.

As a keen amateur cyclist myself, I am well aware that these messages and their education campaigns save lives. They ensure that motorists and cyclists are constantly aware that they should be accommodating of each other on busy roads. For that reason, the Amy Gillett Foundation is a very worthy recipient of deductible gift recipient status.

There are some other organisations that have been added to the list that invoke the commemorations that we have just had in the last few weeks both of Anzac Day and, in the last couple of days, in this House, of the Battles of Fire Support Bases Coral and Balmoral. About three weeks ago, the whole country celebrated the spirit of the Anzacs at dawn services and marches across Australia, taking time to reflect on how, on 25 April 1915, young soldiers landed in Anzac Cove in Gallipoli. On that day, we remembered the 1.5 million Australians who have served their country proudly. The deductible gift recipient status has been conferred on the AE2 Commemorative Foundation because it is appropriate to recognise some of the lesser-known stories of Gallipoli, sometimes referred to as the ‘silent Anzacs’.

The HMAS AE2 was the first allied submarine to successfully dive and evade the heavily mined areas off the Gallipoli Peninsula. As the Anzacs prepared to storm the beaches, it was her mission to create a diversion, to draw fire away from the soldiers and to ‘run amok in the shallows’. The AE2 was then ordered to enter the inland Sea of Marmara and cut off supply lines to the Ottoman Empire. Other allied submarines had tried and failed, yet a characteristically Australian approach allowed the crew to evade capture for five days. They supported their Army brothers until finally succumbing to Turkish fire. Her 32 crew were taken prisoner of war and the AE2 lay on the seabed, unfound until 1992. The AE2 Commemorative Foundation’s objective is to protect and preserve the AE2 and to tell the uniquely Australian story of her brave crew as part of the great Anzac tradition, to remind Australians that for every well-known story you hear about the Anzacs there are many others you have not heard, which should not be forgotten.

Over 100,000 Australian servicemen and servicewomen died in the horrors of the two world wars. The Memorials Development Committee, which is also to be given deductible gift recipient status, seeks to ensure that their deaths are not forgotten and that the sacrifices they made on the battlefield are remembered in our nation’s capital on its most spectacular avenues. The Memorials Development Committee seeks to place two separate but complementary national memorials on Anzac Parade, leading up to the Australian National War Memorial, to commemorate the sacrifices that these service men and women made to their country. These memorials will honour the men and women who gave up so much so that we can continue to live in this great country of ours.

The night before last, I stood in the Great Hall of Parliament House to commemorate the Battles of Fire Support Bases Coral and Balmoral, Australia’s largest and most protracted engagement of the Vietnam War campaign. It was a humbling experience to stand alongside the veterans and their families. Yesterday, they attended a ceremony at the Australian Vietnam Forces National Memorial on Anzac Parade. I look forward to attending a ceremony on Anzac Parade to commemorate those who have fallen in both world wars, when the Memorials Development Committee project is complete in 2010. The Memorials Development Committee is another worthy recipient of deductible gift recipient status.

The member for Melbourne Ports has spoken in detail about the Council for Jewish Community Security, which is also a worthy recipient of the deductible gift recipient status. The measure is an adjunct to the $20 million school security plan for all schools that was announced by Kevin Rudd during the election campaign last year and confirmed in January of this year by the Deputy Prime Minister. As the member for Melbourne Ports explained, the Council for Jewish Community Security does wonderful work. It relies on a large number of volunteers from the community who provide protection for community institutions. It is a matter of regret that in our country there should be a need for a community security organisation at all for any community. But since there is, regrettably, then deductible gift recipient status is an appropriate governmental response.

Finally, I will briefly comment on the deductible gift recipient system. It is my hope that the review of the tax system, which has been announced by the government and which is to take place later this year, will look closely at the somewhat cumbersome system of using legislative identification of particular organisations—which is what we see here in this bill—where there is added, to an already long list of organisations which receive deductible gift recipient status, some further organisations. Using this system potentially causes a long delay between the establishment of a charitable organisation and confirming the tax deductible status of gifts that are made to that organisation. A system which identifies eligible classes and enables quick administrative approval of deductible status would be desirable.