TAXATION LAWS AMENDMENT BILL (NO. 7) 2002: Second Reading
Mr CADMAN (Mitchell) (11.36 a.m.) —It is an honour to be starting this debate somewhat earlier than I expected, and I appreciate the opportunity.
I know that some of the legislation that has just been introduced by the Parliamentary Secretary to the Minister for Finance and Administration in regard to thin capitalisation and other areas has been somewhat delayed by the processes of the House, as has the Taxation Laws Amendment Bill (No. 7) 2002 that we are considering today. It is an exciting title. I can see the gallery is absolutely riveted by the scintillating discussion we are going to have on this bill. There is wild enthusiasm; you may have to remove them—they are so fired up with the anticipation of the liveliness of this debate.
I am not going to speak at length on this legislation. I usually use the opportunity of tax laws to cover a range of topics of concern, but this is a narrowly drafted piece of legislation. It is a simple process that seeks to allow people with expertise and skills who are not normally available to us in Australia to work in Australia as temporary residents, and it provides for exemptions from Australian tax for these temporary residents. Of course they will pay tax in their country of origin. It is not a usual process and one that I did not like very much when I read it. I thought that everybody working in Australia should pay tax and that nobody should be free of taxation.
I have spoken to some of the international companies in my electorate—I will not mention their names. Some it affects, some it does not affect. On balance, I think it is probably sensible. It has come as a recommendation from the Ralph inquiry, and now we are putting it into legislation. The number of companies it is likely to affect is not large. I would like some answers, though, on whether the legislation is going to affect entertainers. For instance, I wonder whether a cameraman or a technical assistant employed by an Australian company to come to Australia to make a film would be affected. I wonder whether some of our internationally known entertainers who come to Australia on a temporary residents visa will be tax free—considering the huge takings some of them make over a short period of time. There are some questions that I have not been able to take the time to seek answers to, but I would appreciate answers to them because these amendments include an exemption from Australian tax law on foreign source income and capital gains for a maximum period of four years to temporary residents. Four years is a fairly long period, and somebody can be here for four years on this basis and be free from Australian taxation.
I have been in consultation with Australian businesses. One business remarked that this legislation would make it generally more attractive for an expat to be favourably received in Australia. For example, somebody who has been residing and working, say, in the United States or in Asia and is returning to Australia for a period on contract and then possibly returning overseas. The recent amendments in May allow temporary residents access to their Australian superannuation on permanent departure, and that was viewed very positively by existing temporary residents. Another comment was that the living away from home allowance provisions have been seen as an attractive option for temporary residents. This company has followed me up to see whether we have enacted the legislation, and it is quite keen to see it go through.
Another foreign based company with a very successful business in the Castle Hill area said that it did not affect them, that it was not relevant as 100 per cent of their employees were local. Only three of their 1,000-odd employees would be affected by these provisions, so they did not regard the legislation as very significant. That having been said, I would like to encourage the government to provide me with answers as to whom they think it can be applied and whether or not there is likely to be a loss of revenue by short-term temporary residents on very high turnaround incomes.
I notice that my colleague has arrived. Without further ado, I will conclude my remarks. The Bills Digest covers a number of provisions that apply to temporary residents, including the concessions that are applicable—such as medical expenses—and the changes that we have made over a period of time to make it attractive for people with expertise to come to Australia to work. I find no flaw in the bill. I would have to say that I was not attracted to it to begin with. As I have said, on balance it is going to make it easier for a number of companies to better operate in Australia when they can draw in the expertise that they need to fulfil particular purposes.
On balance, I think we ought to go ahead with the legislation, but I still have that little feeling in the back of my mind that, if these people are working in Australia, they ought to be contributing to the services that we provide. We are very generous-hearted people. I know that the member for Parramatta, who is at the table, is one of the most generous people in the whole House. I believe he would say that people who are not paying tax are not contributing to the cost of maintaining the services provided by the state of New South Wales, that they are not contributing to the cost of the services provided by the Commonwealth and that perhaps they should be. However, we would hope that the benefit will come from their contribution to their place of work, enlarging the opportunities and employment prospects for the their place of work. I assume that is the basis on which we are granting this concession. If that is the case, it should go ahead.
Author: Alan Cadman MP
Source: House Hansard - 27th March 2003
Release Date: 1 Apr 2003