The Minister for Revenue and Assistant Treasurer, Peter Dutton, today introduced legislation to implement a range of changes and improvements to Australia's taxation system. The Bill will amend the taxation laws to:
Provide tax exemption of F-111 deseal/reseal ex-gratia lump sum payments:
This measure exempts from income tax ex-gratia lump sum payments made to certain F-111 aircraft maintenance personnel by the Department of Veterans' Affairs. This will ensure that those who receive this ex-gratia payment will receive the full benefit of the payment.
As announced by the former Minister for Veterans' Affairs and the former Minister for Defence in August 2005, the Government is making one off ex-gratia lump sum payments from the 2005‑06 income year to certain personnel who experienced a unique working environment in the maintenance of F-111 aircraft fuel tanks. These payments are being made in response to the Study of Health Outcomes in Aircraft Maintenance. Eligible personnel are entitled to a lump sum payment of $40,000 or $10,000.
The payments are made in recognition of the difficulties eligible personnel suffered in the environment in which they worked regardless of whether there is evidence of any adverse health impacts from that work environment.
Add two new organisations to the current list of deductible gift recipients:
This measure adds two new organisations to the current list of deductible gift recipients.
Modify CGT treatment of options:
This measure broadly reinstates the position in the Income Tax Assessment Act 1936 in relation to options.
Provide taxation relief for compulsory acquisitions:
This measure defers the taxing point for capital gains tax and uniform capital allowance purposes if a private entity, such as a mining company, compulsorily acquires an asset. This will operate in a way similar to when a government agency compulsory acquires an asset.
Limit the circumstances in which the franking deficit tax offset is reduced:
Under the current income tax law a company that is liable to pay franking deficit tax is entitled to a tax offset. To discourage companies from passing excessive franking credits to shareholders, the amount of the tax offset is reduced in certain circumstances.
This measure will ensure that the tax offset reduction applies only if a company has made, directly or indirectly, a franked distribution in the relevant income year. In addition, the Commissioner of Taxation will have the discretion to disregard the tax offset reduction if the deficit in the franking account arose because of events outside the company's control. This will have effect from 1 July 2002.
Provide choice of superannuation fund for employees covered by State laws:
This amendment will allow more employees to choose the fund to which their employer makes compulsory superannuation contributions on their behalf.
The Government will override state superannuation laws which require employers that are constitutional corporations to make contributions to a fund specified in that law. This will particularly benefit coal miners in Queensland, Western Australia and NSW as employers will be able to contribute to a superannuation fund of an employee's choosing from 1 July 2006.
Make technical corrections and amendments:
This Bill makes various technical corrections and amendments to the taxation laws and also some general improvements to the law of a minor nature. These corrections and amendments include fixing duplicated definitions, missing asterisks from defined terms, incorrect numbering and referencing and outdated guide material.
While not implementing any new policy, the technical corrections and amendments in this Bill are an important part of the Government's commitment to improving the taxation laws.