I rise to lend my support to the Tax Laws Amendment (2011 Measures No. 6) Bill 2011. The bill is not controversial. It is broken up into three segments. The first schedule amends the Income Tax Assessment Act 1997 in order to ensure that certain payments made under the Better Start for Children with Disability initiative are exempt from income tax—and I will expand on the benefits of that later on in my speech. Schedule 2 amends the Fringe Benefits Tax Assessment Act 1986 to exempt from fringe benefits tax the cost of transport for Australian residents travelling to and from remote overseas places of employment. Schedule 3 amends the list of deductible gift recipients, DGRs, in the ITAA 1997 to make gifts to the Christchurch Earthquake Appeal Trust and Cancer Australia tax-deductible. According to the explanatory memorandum, the sole financial implication of the bill is a $0.68 million cost to revenue in the 2011-12 financial year.
Looking at schedule 1 in more detail, the Better Start for Children with Disability initiative, which we refer to as Better Start, provides funding for early intervention for particular disabled children. The aim of the initiative is to intervene early in the lives of such children because intervention at that stage is considered to be more effective than later treatment. In particular, it is hoped that early intervention will prepare this cohort of children for school. The disabilities covered by the initiative are cerebral palsy, Down syndrome, fragile X syndrome, and moderate or greater vision and hearing impairments including deaf-blindness. To be eligible for funding under the initiative, the family must provide evidence of the child's age; a confirmed, written diagnosis of a relevant disability; evidence of residential status; and the child's Centrelink customer number—relatively easy things for parents to comply with. In addition to the general benefits available to all eligible children and their parents and/or carers, those living in remote and regional Australia will also be eligible for a further, one-off payment of $2,000. This is to reflect the additional expenses associated with accessing early intervention services, including travel and home visits. My seat of Wright includes an element of remoteness, so those funds will be well sought after by people in my electorate.
I am sure we would all agree that parents of severely disabled children have one of the toughest gigs in the world. Coping with the additional amount of physical and emotional care is a challenge. Children with disabilities may need regular medical attention, time in hospital or regular therapy in addition to extra care at home. These pressures, the sense of isolation and, indeed, desperation that can accompany high levels of care can place a lot of emotional as well as financial stress on a parent. The difficulties of that responsibility are only magnified if they happen to live in a regional or remote area where access to services and support are naturally harder to come by. In those circumstances, a bit of extra assistance will never go astray. To that end, the amendments contained in schedule 1 will ensure that the outer regional and remote payment will be exempt from income tax. I personally believe these amendments are entirely appropriate for families to whom every extra dollar counts.
Schedule 2 speaks to the overseas fly-in fly-out FBT exemption. The bill gives an exemption from fringe benefits tax for transport from an employee's usual place of residence to their usual place of employment where the employee is an Australian resident employed in a remote area overseas under fly-in fly-out arrangements. Current FBT arrangements expressly exempt transport from an employee's usual place of residence to their usual place of employment, where the employee is employed under what is commonly known as a fly-in fly-out arrangement and the usual place of employment is a remote location in Australia, on an oil rig or on another installation at sea.
As we reflect on the booming resources sector that Australia is incurring at the moment, we have more people who are choosing to reside on the eastern seaboard while there is a greater demand for their skills either in remote parts of Australia or offshore. Schedule 2 extends the exemption to Australians whose usual place of employment is overseas specifically where they work at a remote location that is not in a state or internal territory of an Australian employer.
The extension will apply to fringe benefits provided since 1 July 2009, which is when the foreign employment income of Australian residents became assessable in certain circumstances. Previously, foreign employment income was exempt from income tax paid by the taxpayer if they had been employed overseas for more than 91 days in a continuous period. However, in 2009 the Rudd government tightened the eligibility requirements for the exemption in section 23AG of the Income Tax Assessment Act 1936 so that only foreign income that is 'directly attributable' to particular activities, such as the delivery of Australia's official development assistance or the person's deployment as a member of an Australian 'disciplined force', is exempt.
Since 2009 the foreign employment income of Australians not engaged in any of those specific activities has been subject to Australian income tax. Similarly, any fringe benefits provided by the employer, including fly-in fly-out transport, has also been subject to taxation.
Under the proposed amendments, while foreign employment income will still be subject to Australian income tax, the provision of transport will become exempt from FBT. Extending the exemption will ensure that Australian residents working for Australian employers in remote areas on fly-in fly-out arrangements are taxed consistently, regardless of whether they are working in Australia or overseas, as well as eliminate any possible double taxation on such benefits. The extension of the exemption will only apply to Australian resident taxpayers because foreign resident taxpayers are not taxable in Australia on their foreign sourced income.
This amendment clears up an oversight from a previous tax law change. This is a fairly obvious technical oversight to previous changes that the government should not have allowed to happen in the first place. However, with the number of Australians working under fly-in fly-out arrangements increasing, it is satisfying to see that we are finally rectifying a loophole which unfairly disadvantaged those Australians who operated under similar circumstances in an overseas location.
Schedule 3 speaks to deductible gift recipients. The income tax laws allow income tax deductions for taxpayers who make gifts of $2 or more to organisations registered as deductible gift recipients. To be considered a DGR, an organisation must fall within one of the general categories set out in division 30 of the Income Tax Assessment Act 1997 or be specifically listed by name in that division. DGR status assists eligible funds and organisations to garner public support for their activities.
The amendments in schedule 3 add the New Zealand government's Christchurch Earthquake Appeal Trust, established following the 22 February 2011 Christchurch earthquake, and Cancer Australia to the list of DGRs and makes other minor changes to the DGR listings. Both charities well deserve a place on that register.
In my electorate of Wright, we know a thing or two about natural disasters and we can truly sympathise with the tough time the people of Christchurch have been through over the past six months or so. Recovering from a natural disaster is an ongoing process and no doubt it will be some time yet before the physical and emotional scars have healed. Later this year I look forward to catching up with the mayor of Christchurch to discuss the personal hardship that he went through, similar to that which we went through in the Grantham area. I understand the Earthquake Appeal Trust is doing fantastic work repairing schools, restoring the city's parks and sporting facilities and laying the groundwork for the construction of an interim 'cardboard cathedral' to temporarily replace the iconic Anglican cathedral in the city centre. I know that many Australians have donated generously to their Kiwi cousins and it is only fair that their generosity is acknowledged in this way on this register.
Cancer Australia was established in 2006 to provide national leadership in cancer control and to benefit all Australians, their families and carers who are affected by cancer. The organisation works to reduce the impact of cancer and improve the wellbeing of those diagnosed by ensuring that evidence informs cancer prevention, screening, diagnosis, treatment and supportive care. Everybody knows at least one person who has been tragically touched by cancer and it is the one cause to which almost everyone is happy to donate. For that reason alone, I am happy to see the Cancer Australia gift fund included on the list of DGRs.
In conclusion, the coalition believes the amendments contained in the bill are worth while and, for that reason, it carries my full support.