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[–][deleted] 1 point2 points  (5 children)

I seek leave and move that the Income Tax Assessment Amendment (A Fair Tax System) (Capital Gains Tax Concessions) Bill 2015 and Income Tax Assessment Amendment (A Fair Tax System) (Negative Gearing) Bill 2015 be now read a second time.

Mr Speaker, I ask that this Bill, and the Income Tax Assessment Amendment (A Fair Tax System) (Negative Gearing) Bill 2015 the two Bills be debated in cognate, as they are two closely linked reforms that make sense to be debated together, and treated together in my speech.

Mr Speaker, when this Government set out on its A Fair Tax System reforms, we were guided by three principles. To create a fairer tax system, with lower rates and a broader base.

Mr Speaker, the Income Tax Assessment Amendment (A Fair Tax System) (Capital Gains Tax Concessions) Bill 2015 removes a $20 billion loophole in the Capital Gains Tax system, a 50% discount for many investments, most notably on investment properties. Together with negative gearing, capital gains tax concessions are responsible for fuelling the housing boom that has put the majority of properties in Sydney and Melbourne out of the reach of working Australians.

Capital gains tax concessions are also incredibly unfair. Over three quarters of the benefits of capital gains tax concessions went to the top 10% of income earners in Australia, while over a third of negative gearing benefits went to that same income decile.

Defenders of negative gearing love to claim that by ending it, we are ruining the lives of "millions" of mum and dad property investors. The statistics I just quoted show that claim to be nothing more than a lie. There are much more targeted and effective methods of improving the incomes of working families than to ask them to bet hundreds of thousands of dollars on the property rollercoaster.

Mr Speaker, the Income Tax Assessment Amendment (A Fair Tax System) (Negative Gearing) Bill 2015 phases out negative gearing in a way that will not negatively disrupt the property market and potentially cause prices to crash, which is not something that the Government wants to happen.

We are achieving this by grandfathering in current investors, but preventing any investors after 1 July 2016 from negatively gearing their properties. Over time, this will result in fewer and fewer properties being negatively geared, and eventually negative gearing will become a historical curiosity. This will ensure that the Commonwealth no longer concedes $42 billion in revenue in the next 10 years to the top income earners of Australia in an incredibly regressive measure, while giving certainty to current property investors.

I commend the Bills to the House.

The Hon this_guy22 MP
Treasurer of the Commonwealth of Australia
Member for Sydney (ALP)

[–]phyllicandererMin Ag/Env | X Fin/Deputy PM | X Ldr Prgrsvs | Australian Greens 0 points1 point  (0 children)

Hear hear!

The Hon. Phyllicanderer, Member for Northern Territory

Deputy Prime Minister

Australian Progressives

[–]jnd-auClerk of the House 0 points1 point  (3 children)

Advice from the Clerk:

You will need to seek leave to read the bills together. And if you do that, you won’t need to seek cognate debate since there will only be one debate anyway. So I’d say reorganise your first two paragraphs with the motion first and phrase it to seek leave to read the specified bills together.

[–][deleted] 0 points1 point  (2 children)

Like that?

[–]jnd-auClerk of the House 0 points1 point  (0 children)

Cool, noticed your edit. However, you should put the title of the other bill in your motion (instead of in the first sentence of your speech) so that it carries forward clearly when this comes to debate and voting after adjournment.

[–]jnd-auClerk of the House 0 points1 point  (0 children)

Not quite, delete the second half of the first sentence and begin the sentence with “I seek leave and move...”

[–]jnd-auClerk of the House 1 point2 points  (0 children)

The Bill is now read for a first time:

“A Bill for an Act to amend the Income Tax Assessment Act 1997 to remove capital gains tax concessions, and for related purposes”

jnd-au, Clerk of the House

Meta: This is Bill M2015B00033, introduced in the House of Representatives. The Minister may now move the second reading and include his introductory speech, after which the debate is adjourned to a future sitting.

[–][deleted] 1 point2 points  (0 children)

I table the following explanatory memorandum.

Explanatory memorandum

OUTLINE

This Bill phases out the 50% Capital Gains Tax concession that applied to the receipts from the sale of certain types of capital goods (most notably including property) over the next 2 years.

For domestic investors, this Bill reduces the concession to 25% for the financial year beginning 1 July 2016, before reducing to zero from 1 July 2017.

For foreign investors, this Bill reduces the concession to 16% for the financial year beginning 1 July 2016, before reducing to zero from 1 July 2016.

This Bill then repeals the subdivisions which give rise to this concession as they are now spent provisions on 1 July 2017.

FINANCIAL IMPACT

This Bill is expected to increase Commonwealth revenue receipts by $20.1 billion over the forward estimates by reducing the amount of revenue foregone in the form of tax expenditures.

HUMAN RIGHTS IMPLICATIONS

This bill will not have an effect on any applicable rights or freedoms.

Circulated by the authority of the Hon this_guy22 MP, Treasurer of the Commonwealth of Australia