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Clean Energy (Income Tax Rates and Other
Amendments) Bill 2013 [No. 2]
Portfolio:
Treasury
Introduced: House of
Representatives, 23 June 2014
Purpose
1.1
Clean Energy (Income Tax Rates and Other Amendments) Bill 2013
[No. 2] seeks to amend the Clean Energy (Income Tax Rates Amendments)
Act 2011 to repeal the personal income tax cuts legislated to commence on 1
July 2015.
1.2
The bill also seeks to amend the Clean Energy (Tax Laws Amendments)
Act 2011 to repeal associated amendments to the low-income tax offset legislated
to commence on 1 July 2015.
Background
1.3
This bill is a re-introduction of the Clean Energy (Income Tax Rates and
Other Amendments) Bill 2013 which the committee considered in its First
Report of the 44th Parliament.[1]
1.4
The committee considered the Parliamentary Secretary to the Treasurer's
response in its Eighth Report of the 44th Parliament and noted that the
response had not provided a detailed and evidence-based explanation for the
measures in accordance with the committee's usual expectations.[2]
1.5
The committee notes that the second reading of this bill was negatived
by the Senate on 9 July 2014.
Committee view on compatibility
Right to an adequate standard of
living
1.6
The right to an adequate standard of living requires that the state take
steps to ensure the availability, adequacy and accessibility of food, clothing,
water and housing for all people in Australia.
1.7
Australia has two types of obligations in relation to this right. It has
immediate obligations to satisfy certain minimum aspects of the right; not to
unjustifiably take any backwards steps that might affect living standards; and
to ensure the right is made available in a non-discriminatory way. It also has
an obligation to take reasonable measures within its available resources to
progressively secure broader enjoyment of the right to an adequate standard of
living.
Effect of repealing measures
1.8
The bill also seeks to repeal amendments to section 159N of the Income
Tax Assessment Act 1936 that were to apply from 2015-16. Those amendments
were to decrease the maximum amount of the low-income tax offset (LITO) to
$300, increase the threshold in subsection 159N(1) to $67,000, and decrease the
withdrawal rate of the LITO in subsection 159N(2) to one per cent. The
amendments proposed by this bill mean that instead of these changes applying
from the 2015-16 income year, the maximum amount of the LITO remains at $445,
the threshold in section 159N(1) remains at $66,667, and the withdrawal rate of
the LITO in subsection 159N(2) remains at 1.5 per cent.
1.9
As noted in its First Report of the 44th Parliament, neither the
statement of compatibility nor the explanatory memorandum provides any summary
information about or assessment of the impact of these changes, particularly on
persons on lower incomes. Without such information it is not possible to assess
whether the changes will have a significant impact on the right to an adequate
standard of living.
1.10
The committee's usual expectation where a right may be limited is that
the statement of compatibility provide an assessment of whether the limitation
is reasonable, necessary, and proportionate to achieving a legitimate
objective. The committee notes that to demonstrate that a limitation is
permissible, legislation proponents must provide reasoned and evidence-based
explanations of why the measures are necessary in pursuit of a legitimate
objective.
1.11
The committee therefore seeks the Parliamentary Secretary to the
Treasurer's advice as to whether the bill is compatible with the right to an
adequate standard of living.
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