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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer and Copyright Details
A New Tax System
(Family Assistance) (Consequential and Related Measures) Bill
(No.2) 1999
Date Introduced: 9 June 1999
House: House of Representatives
Portfolio: Family and Community Services
Commencement: For the most part immediately
after the commencement of several other Acts including the A New
Tax System (Family Assistance) Act 1999 and A New Tax System
(Family Assistance)(Administration) Act 1999, which commence after
the commencement of specified goods and services tax legislation
proposed to commence on 1 July 2000. However, transitional
provisions may commence as early as 1 January 2000.
Purpose
The purpose of
the A New Tax System (Family Assistance)(Consequential and Related
Measures) Bill (No.2) 1999 (the Bill), is to accompany three other
family assistance Bills(1) to facilitate the introduction of a new
simplified structure and delivery mechanism for the provision of
family assistance from 1 July 2000.
The Bill proposes to:
-
- amend the Social Security Act 1991 to omit references
relating to existing payments that have been combined into the
three new payments under the A New Tax System (Family Assistance)
Bill 1999
-
- amend the A New Tax System (Family Assistance) Act
1999 to clarify some aspects of the new family assistance
structure including inserting a reference to the family tax benefit
advance, and
-
- amend the A New Tax System (Family
Assistance)(Consequential and Related Measures) Act (No.1)
1999 to insert a further transitional provision that allows
the use or disclosure of information between agencies (Australian
Taxation Office, Centrelink and Health Insurance Commission) for
transitional purposes in respect of the family assistance package.
This will facilitate a more ordered approach in preliminary
correspondence and communications with recipients of family
assistance.
Background
- Tax Reform Package
On 13 August 1998 the Federal Government
released proposals for reform of the Australian tax system(2) of
which, a goods and services tax (GST) was the centrepiece.
The tax reform plan proposes to:
-
- Introduce a GST which eliminates sales tax and a range of nine
other indirect taxes
-
- Change Commonwealth-State financial relations by providing
States and Territories with an independent revenue base
-
- Implement significant changes to individual marginal tax
rates
-
- Implement a major rationalisation of family assistance
-
- Replace the various existing taxation payment and reporting
systems of company tax, provisional tax, PAYE,(3) PPS(4) and RPS(5)
by one quarterly tax payment system, PAYG(6)
-
- Introduce a new universal business number system
-
- Move toward an entity taxation system which is directed toward
the elimination of tax advantages between different business
structures, and
-
- Simplify the imputation system and introduce refunds for excess
franking credits.
As part of the tax reform package to implement a
major rationalisation of family assistance the Government proposes
to simplify the structure and delivery of family assistance.
Accordingly, twelve family benefits are proposed to be reduced to
three and a new Family Assistance Office will deliver the new set
of simplified family assistance programs.(7)
On 25 November 1998, the Senate referred issues
relating to the GST and the new tax system to a Select Committee
and three of its Reference Committees.(8) In February 1999 the
Senate Select Committee produced its First Report.(9) The three
Reference Committees produced their reports in March 1999.(10) In
April 1999 the Senate Select Committee released its second
report.(11)
Background - Family Assistance
Package
1.
Summary of the A New Tax System (Family Assistance) Bill 1999
The A New Tax System (Family Assistance) Bill
1999 introduces a proposed new family benefits structure that will
reduce the existing payment mechanisms from twelve to three.
It also relocates Maternity Allowance from the
Social Security Act 1991 to the A New Tax System (Family
Assistance) Bill 1999. This is to ensure that all family assistance
benefits are located in one Act.
It is proposed that there will be three distinct
family benefits:
- Family Tax Benefit Part A
Family Tax Benefit Part A (FTB-Part A) will provide assistance to
families to raise children.
- Family Tax Benefit Part B, and
Family Tax Benefit Part B (FTB-Part B) will provide additional
assistance for single income families with children
- Child Care Benefit
Child Care Benefit (CCB) will provide assistance with the costs of
childcare outside the home.
An individual's annual rate of family tax
benefit is the sum of FTB-Part A and
FTB-Part B.
Maternity Allowance (MA), assistance in the form of a one-off
payment to meet additional costs at the time of the birth of a
child, will continue to be available with some minor changes.
2. Further
background information on family benefits
For further information please refer to the
Bills Digest for the A New Tax System (Family Assistance) Bill
1999, No. 175 of 1998-99, and in particular to the sections on
family assistance initiatives and family benefits found on pages 2
to 5 inclusive. It includes a summary of family assistance from
1941 to 1999 in table format.
Main Provisions
1. Schedule 1 - Amendments to the
Social Security Act 1991
Schedule 1 contains amendments
to the Social Security Act 1991 which:
-
- omit references to repealed payments, and
-
- substitute new and equivalent references to family assistance
law payments and concepts.
2. Schedule 2 - Amendments to the
A New Tax System (Family Assistance) Act 1999
Schedule 2 contains amendments
to the A New Tax System (Family Assistance) Act 1999
which:
-
- include 'family tax benefit advance' in the definition of
family assistance (Item 1)
-
- change references to a 'calendar year' to a 'financial year' in
provisions concerning Child Care Benefit (Items 3
to 8, 10, 34 and
35), and
-
- make technical amendments, including the insertion of the word
'approved' before the various types of care service, for example
'approved family day care service' rather than 'family day care
service' (Items 9, 18,
19, 22, 24,
30 and 31).
Schedules 3 to
9 make amendments to seven other Acts.
-
- Child Care Act 1972 (Schedule 3)
-
- Child Support (Assessment) Act 1989 (Schedule
4)
-
- Data-matching Program (Assistance and Tax) Act 1990
(Schedule 5)
-
- Farm Household Support Act 1992 (Schedule
6)
-
- Health Insurance Act 1973 (Schedule
7)
-
- Health Insurance Commission Act 1973 (Schedule
8), and
-
- Veterans' Entitlements Act 1986 (Schedule
9)
Basically the amendments:
-
- insert references to family assistance law payments and
concepts including definitions of those new elements and
legislative references
-
- delete references to current payments and substitute equivalent
references to family tax benefit, and;
-
- amend terms and definitions to reflect those in the family
assistance law.
Schedule 10 makes amendments to
ten taxation laws including:
-
- the Income Tax Assessment Act 1936
-
- to enable the Australian Taxation Office to give information to
Centrelink and the Health Insurance Commission for the purpose of
administering the new scheme (Item 8)
-
- to facilitate collection of Tax File Numbers for the purpose of
administering the family assistance law (Item 22),
and
-
- to allow tax deductibility of fees and commissions related to
family tax benefit claimed through the tax system, paid to
recognised tax advisers (Item 30).
Item 2 of Schedule
11 amends the A New Tax System (Family
Assistance)(Consequential and Related Measures) Act (No.1) 1999 to
insert further transitional provisions that allow the use or
disclosure of information between agencies (Australian Taxation
Office, Centrelink and the Health Insurance Commission) for
transitional purposes in respect of the family assistance law.
It is expected that such cooperation will enable
identification of shared customers so those customers receive only
one letter explaining the new arrangements instead of
three.(12)
Endnotes
-
- A New Tax System (Family Assistance) Bill 1999; A New Tax
System (Family Assistance)(Administration) Bill 1999 and A New Tax
System (Family Assistance)(Consequential and Related Measures) Bill
(No.1) 1999.
- Treasurer, Tax Reform: not a new tax - a new tax
system; Tax Reform Plan, 13 August 1998, Commonwealth of
Australia.
- Pay As You Earn.
- Prescribed Payments System.
- Reportable Payments System.
- Pay As You Go.
- Treasurer, Tax Reform: not a new tax - a new tax
system; Tax Reform Plan, 13 August 1998, Commonwealth of
Australia, pp. 52-5.
- Senate Select Committee on A New Tax System; Senate Community
Affairs References Committee; Senate Employment, Workplace
Relations, Small Business and Education References Committee and
Senate Environment, Communications, Information Technology and the
Arts References Committee.
- Senate Select Committee on A New Tax System, First
Report, February 1999.
- Senate Community Affairs References Committee, The Lucky
Country Goes Begging, Report on the GST and a New Tax System,
March 1999; Senate Employment, Workplace Relations, Small Business
and Education References Committee, Report of the Inquiry into
the GST and A New Tax System, March 1999 and Senate
Environment, Communications, Information Technology and the Arts
References Committee, Inquiry into the GST and a New Tax
System, March 1999.
- Senate Select Committee on A New Tax System, Main
Report, February 1999.
- Warren Truss MP, A New Tax System (Family
Assistance)(Consequential and Related Measures) Bill (No.2) 1999,
Second Reading, 9 June 1999, p 1.
Lesley Lang, Dale Daniels & Peter Yeend
24 June 1999
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ISSN 1328-8091
© Commonwealth of Australia 1999
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