Tax expert slams Oz's legislative system

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That so many tax measures were announced by previous governments and then gathered dust unlegislated is a “damning indictment” on the effectiveness of Australia’s legislative system, says a tax expert.

In an announcement at the start of November, the Coalition government said 18 out of 92 unlegislated tax and superannuation measures would proceed, three would be amended and seven would not go ahead – including the $2,000 cap on self-education expenses.

Then on Saturday, Assistant Treasurer Arthur Sinodinos announced:
  • 16 of the measures will proceed, with no net financial impact over the forward estimates, and
  • 48 measures will not proceed, at a net revenue cost of $67.9m.
Many of these are relatively minor and have been in limbo for years, said Taxpayers Australia head of tax Mark Chapman.

“The problem lies in the fact that so many measures could be announced by previous governments and then remain un-enacted for so long. This is a damning indictment on the effectiveness of our legislative system.

“Unfortunately, whilst the backlog has now been cleared, the system which caused it remains and there is a real risk that new announcements from the new government will simply build up over time in the same way.”

The measures proceeding include the capital gains tax treatment of earn-out arrangements, the income tax treatment of instalment warrants, and the GST reverse charge for going concerns.

Those not proceeding include quarterly credits for the research and development tax incentive, CGT relief for taxpayers affected by natural disasters, and symmetric treatment of bad debts.

A number of superannuation measures – including the acquisition and disposal of certain assets between self-managed superannuation funds, Stronger Super reforms and the take-up of deferred lifetime annuities – have also been resolved.

It is expected the bulk of legislation will be passed by Parliament sometime next year.

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