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senate vote 2018-03-19#1
Edited by
mackay staff
on
2023-07-21 09:42:05
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Title
Bills — Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017; in Committee- Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017 - in Committee - No exploration incentive for thermal coal
Description
<p class="speaker">Zed Seselja</p><p>I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill.</p>-
- The majority voted against an [amendment](https://www.openaustralia.org.au/senate/?gid=2018-03-19.22.1) introduced by Queensland Senator [Andrew Bartlett](https://theyvoteforyou.org.au/people/senate/queensland/andrew_bartlett) (Greens), which means it failed.
- ### Amendment text
- > *(1) Schedule 1, item 2, page 7 (line 3), after "*petroleum", insert ", thermal coal".*
- ### What did this amendment attempt to do?
- Senator Bartlett [explained that](https://www.openaustralia.org.au/senate/?gid=2018-03-19.22.1):
- > *As the bill currently stands—and as we all know this bill will become law fairly soon, as it is going to pass—it exempts the incentive from being made available to exploration or prospecting for petroleum or oil shale. All this amendment seeks to do is to ensure that thermal coal is also exempt from being eligible for this exploration incentive.*
- >
- > *The time for coal in Australia is over, and we need to be recognising that. We need to be recognising that we do not need to be putting any more public resources into continuing to explore for new thermal coal deposits. We need to be transitioning away from coal. We need to be ensuring that all of our communities that in the past have had some economic benefit from these industries are able to transition effectively, that the workers are able to transition effectively and the communities are able to be provided with other economic opportunities, many of which are already there and many of which need support and investment to develop more effectively and more sustainably.*
<p class="speaker">Glenn Sterle</p><p>We will move to schedule 1, items 2 and 66.</p> <p class="speaker">Zed Seselja</p><p>I move:</p><p class="italic">That the House of Representatives be requested to make the following amendment:</p><p class="italic">(1) Schedule 1, item 2, page 8 (lines 13 to 23), omit section 418-82, substitute:</p><p class="italic">418 -82 When does an entity have an <i>unused allocation of exploration credits </i> from an income year</p><p class="italic">(1) An entity has an <i>unused allocation of exploration credits </i>from an income year if each of the following:</p><p class="italic">(a) the entity's *exploration credits allocation for the income year;</p><p class="italic">(b) the total credits issue for investment in the entity for the income year;</p><p class="italic">exceeds the total amount of all *exploration credits created by the entity for the income year.</p><p class="italic">Parliamentary Counsel</p><p class="italic">Statement of reasons: why certain amendments should be moved as requests</p><p class="italic">Section 53 of the Constitution is as follows:</p><p class="italic">Powers of the Houses in respect of legislation</p><p class="italic">53. Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law.</p><p class="italic">The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government.</p><p class="italic">The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people.</p><p class="italic">The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modifications.</p><p class="italic">Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws.</p><p class="italic">Amendment 1</p><p class="italic">Division 418 of the <i>Income Tax Assessment Act 1997 </i>(the <i>ITAA 97</i>) provides a refundable tax offset under section 67-23 of the ITAA 97 to taxpayers who invest in a minerals explorer, by allowing the minerals explorer to issue those investors with exploration credits.</p><p class="italic">The Bill extends the refundable tax offset for a further 4 years. Under the Bill, the minerals explorer may apply for an exploration credits allocation for a particular year and cannot issue more credits than allocated. The minerals explorer also cannot issue more exploration credits for an income year than would relate to investment in the minerals explorer during that year. However, if allocation is not used up in one year, investors in that year are given priority in the following year, up to the limit of the unused allocation of exploration credits. Because the allocation of exploration credits for the first year may exceed the amount of exploration credits that would relate to investment in that year, investors in the second year may miss out on exploration credits that could never have been issued to first year investors anyway.</p><p class="italic">Amendment 1 addresses this problem by redefining the unused allocation of exploration credits. Under the amendment, exploration credits are not "wasted" and are instead available to investors in the second year. As a result, the amount of exploration credits that may result in a refundable tax offset is greater under the amendment than it would be under the Bill (and, given that the Bill extends the offset over 4 more years, under the Act).</p><p class="italic">The refundable tax offset could entitle a taxpayer to a refund under Division 3A of Part IIB of the <i>Taxation Administration Act 1953</i>. This would increase the amount of expenditure out of the Consolidated Revenue Fund under the standing appropriation in section 16 of the <i>Taxation Administration Act 1953</i>. It is for this reason that the amendment is covered by section 53.</p><p class="italic">Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000</p><p class="italic">Amendment (1)</p><p class="italic">This amendment will allow the unused allocation of exploration credits for an income year to be available to investors in the subsequent year, thereby increasing the amount of exploration credits available as a refundable tax offset.</p><p class="italic">The statement of reasons for moving the amendment as a request advises that it will increase expenditure under the standing appropriation in section 16 of the <i>Taxation Administration Act 1953</i>.</p><p class="italic">The Senate has long followed the practice that it should treat as requests amendments that would result in increased expenditure under a standing appropriation. If that is the effect of the amendment, then it is in accordance with the precedents of the Senate that it be moved as a request.</p><p>I move amendment (2) on sheet GU143:</p><p class="italic">(2) The amount of the <i>unused allocation of exploration credits </i>from the income year is the lesser of:</p><p class="italic">(a) the amount by which the amount mentioned in paragraph (1) (a) exceeds the total amount of all *exploration credits created by the entity for the income year; and</p><p class="italic">(b) the amount by which the amount mentioned in paragraph (1) (b) exceeds the total amount of all *exploration credits created by the entity for the income year.</p><p class="italic">(3) If neither the amount mentioned in paragraph (1) (a) nor (1) (b) exceeds the total amount of all *exploration credits created by the entity for the income year, there is <i>no unused allocation of exploration credits</i> from the income year, and the amount of any <i>unused allocation of exploration credits</i> from the income year is nil.</p><p class="italic">(4) In this section:</p><p class="italic"><i>total credits issue</i> <i>for investment </i>in the entity (the <i>minerals explorer</i>) for an income year means the total of all *exploration credits that may be issued by the minerals explorer to all other entities in relation to *exploration investment made by those other entities in the minerals explorer in the income year if section 418-120 is complied with.</p><p class="italic">(2) Schedule 1, item 66, page 31 (lines 16 to 20), omit subitem (1), substitute:</p><p class="italic">(1) Despite subsection 418-100(2) of the <i>Income Tax Assessment Act 1997</i>, as inserted by item 2 of this Schedule, an application to the Commissioner for a determination allocating exploration credits to an entity for the 2017-18 income year must be made during the period of one month starting on the later of:</p><p class="italic">(a) the eleventh business day after the day on which this Act receives the Royal Assent; and</p><p class="italic">(b) the day on which this item commences.</p><p>These two technical amendments are proposed to clarify the operation of the new scheme. The amendments adjust the application period for the 2017-18 income year. The bill previously provided that junior explorers could apply to the ATO from 1 February 2018 for an allocation of credits. It is necessary to adjust the application period as this time frame has passed. The new application period will begin on 11th business day after this bill receives royal assent, or the day of the commencement of the amendments if this is later. Applications will be open for a month. Under the JMEI, the Commissioner of Taxation allocates credits between junior explorers on a first come, first served basis until the annual exploration cap for an income year is reached. The amendments clarify the definition of 'unused allocation of exploration credits' to ensure the scheme operates as intended. Where an explorer raises less capital than expended, they will not be prevented from issuing credits to investors in the following year, to the extent of the shortfall. For example, where an explorer receives an allocation of credits to raise $1 million of capital but is only able to raise $600,000 of capital, only those credits that relate to the $600,000 can be issued to investors. Those credits need to be issued to first-year investors before credits can be issued to investors in subsequent years.</p> <p class="speaker">Deborah O'Neill</p><p>Labor will support these government amendments to the Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill. The first amendment will be to the 2017-18 credit year, as indicated by the minister, reflecting the date on which the bill passes the parliament. The start date of the scheme is linked to royal assent, and that is appropriate and Labor will support it. The other amendment, we understand, is to clarify the use and availability of credits by junior explorers, according to the intent of the bill. Therefore, Labor will also support that amendment.</p> <p class="speaker">Chris Ketter</p><p>The question is that the request for amendment (1) be agreed to.</p><p>Question agreed to.</p><p>The TEMPORARY CHAIR: The question now is that amendment (2) be agreed to.</p><p>Question agreed to.</p> <p class="speaker">Andrew Bartlett</p><p>I move Greens amendment (1) on sheet 8384, as circulated in my name:</p><p class="italic">(1) Schedule 1, item 2, page 7 (line 3), after "*petroleum", insert ", thermal coal".</p><p>It is a very simple amendment, on which I elaborated to some extent in my second reading contribution, so I won't go over all of that again. As the bill currently stands—and as we all know this bill will become law fairly soon, as it is going to pass—it exempts the incentive from being made available to exploration or prospecting for petroleum or oil shale. All this amendment seeks to do is to ensure that thermal coal is also exempt from being eligible for this exploration incentive.</p><p>The time for coal in Australia is over, and we need to be recognising that. We need to be recognising that we do not need to be putting any more public resources into continuing to explore for new thermal coal deposits. We need to be transitioning away from coal. We need to be ensuring that all of our communities that in the past have had some economic benefit from these industries are able to transition effectively, that the workers are able to transition effectively and the communities are able to be provided with other economic opportunities, many of which are already there and many of which need support and investment to develop more effectively and more sustainably. There is a lot of debate of course in my own state of Queensland—an argument regarding the future of the thermal coal industry. The Greens' position on that is unequivocally clear, and we think it's about time the parliament's position on that was made unequivocally clear.</p><p>There are alternative economic futures for regional communities. They are ones that are better both in terms of employment opportunities and in terms of more solid and stable communities. So much of the profit from coal in the past has gone to overseas corporations, many of which have managed to avoid tax. The harm done by the boom-bust component of the last mining boom to communities in regional Queensland is quite significant. I know my Greens colleagues could talk about other states as well. But it caused quite significant social and community damage.</p><p>We've got $100 million-plus available here. That money could be invested far more effectively in economic opportunities that are far more stable and suited for communities. It also should not be being spent in any way to encourage further exploration of thermal coal. We should not be opening up existing coal deposits that have already been identified. We still do not have a clear position from the Queensland government about whether they do or do not support the Adani coalmine. We do not have a clear position from the Queensland government on whether they do or do not support opening up the whole new massive coal deposits in the Galilee Basin. As I said in my second reading contribution, any further expansion of that will predominantly have a harmful effect on existing coal jobs. We need to be supporting people who are in existing employment and providing assistance for a smooth transition for those workers, many of whom are already being inappropriately exploited by overseas mining corporations, due in part to the inadequacies under our existing so-called Fair Work Act and the inadequacies of our existing industrial relations laws. The last thing we should be doing is providing more taxpayer money to subsidise exploration to identify more thermal coal deposits. That's why the Greens are moving this amendment. It's a pretty straightforward one and I certainly would encourage other parties to support it.</p> <p class="speaker">Deborah O'Neill</p><p>For clarification, Senator Bartlett: you read some numbers that I don't know actually align with what had been circulated. You are moving the amendment on sheet 8384, aren't you?</p> <p class="speaker">Andrew Bartlett</p><p>Yes.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>-
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