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senate vote 2023-06-20#7
Edited by
mackay staff
on
2023-09-15 10:40:53
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Title
Bills — Treasury Laws Amendment (2022 Measures No. 4) Bill 2022; in Committee- Treasury Laws Amendment (2022 Measures No. 4) Bill 2022 - in Committee - Keep schedule 2
Description
<p class="speaker">Katy Gallagher</p><p>GALLAGHER (—) (): I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill, which I think have been circulated.</p>-
- The majority voted in favour of a [motion](https://www.openaustralia.org.au/senate/?gid=2023-06-20.171.3) that schedule 2 remain as it is. This vote was put after NSW Senator [Andrew Bragg](https://theyvoteforyou.org.au/people/senate/nsw/andrew_bragg) (Liberal) proposed that that schedule be removed.
- When proposing the amendment to oppose the schedule, he [explained that](https://www.openaustralia.org.au/senate/?gid=2023-06-20.159.1):
- > *As I foreshadowed in my contribution to the second reading debate, this amendment excises the section which deals with the taxation treatment of digital currencies. It does that on the basis that there is a separate process underway through the Board of Taxation and this would introduce unnecessary regulatory risk in a very sensitive area. It will also do it on the basis that it won't be removing any consumer protections or, indeed, driving any new innovation.*
<p>I move amendment (2) on sheet PZ104:</p><p class="italic">(2) Schedule 7, page 119 (line 1) to page 120 (line 18), to be opposed.</p><p>This parliamentary amendment removes schedule 7 of the bill. Schedule 7 proposed to amend the Income Tax Assessment Act 1997 to update the list of specifically listed deductible gift recipients. In order to ensure expedited passage of the measure to update the list of specifically listed deductible gift recipients, schedule 7 to the bill was reintroduced as schedule 1 to the Treasury Laws Amendment (2022 Measures No. 5) Bill 2022. As a result, schedule 7 no longer needs to be progressed as part of this bill.</p> <p class="speaker">James McGrath</p><p>The opposition will support this amendment, but only to correct the gross incompetence of the government's Assistant Treasurer in his coordination of this bill.</p> <p class="speaker">Andrew McLachlan</p><p>Are there any other contributions? I'll put government amendment (2) on sheet PZ104. The question is that schedule 7 stand as printed.</p><p>Question negatived.</p> <p class="speaker">Katy Gallagher</p><p>I move amendment (1) on sheet PZ104:</p><p class="italic">(1) Clause 2, page 2 (table item 4), omit the table item.</p><p>This amendment is essentially consequential to the first one.</p><p>Question agreed to.</p> <p class="speaker">Nick McKim</p><p>At the request of Senator Rice, I move amendment (1) on sheet 1831, standing in the name of Senator Rice:</p><p class="italic">(1) Schedule 1, item 2, page 11 (after line 18), after subparagraph 378-25(7)(c)(i), insert:</p><p class="italic">(ia) a game that contains, or allows access to, a digital container of randomised virtual items that can be obtained for consideration (commonly known as a loot box);</p> <p class="speaker">James McGrath</p><p>McGRATH () (): I note this amendment is substantially the same as an amendment moved by the member for Clark in the House of Representatives. On the basis of an assurance of the government that was given in the House of Representatives, the coalition will be opposing this amendment.</p> <p class="speaker">Katy Gallagher</p><p>The government will also be opposing this amendment. The key purpose of the DGTO is to promote the growth of the digital games industry in Australia and enhance the industry's international competitiveness. In our bill, games that are a gambling service, gambling or gambling like are already excluded.</p><p>Question negatived.</p> <p class="speaker">Andrew Bragg</p><p>I move opposition amendment (1) on sheets 1858:</p><p class="italic">(1) Schedule 2, page 32 (line 1) to page 35 (line 23), to be opposed.</p><p>As I foreshadowed in my contribution to the second reading debate, this amendment excises the section which deals with the taxation treatment of digital currencies. It does that on the basis that there is a separate process underway through the Board of Taxation and this would introduce unnecessary regulatory risk in a very sensitive area. It will also do it on the basis that it won't be removing any consumer protections or, indeed, driving any new innovation.</p><p>Of course, the Treasury itself could not even explain whether there would be a quantifiable gain or loss to revenue. So I think it's a reasonable amendment for the Senate to consider in light of the evidence from industry that this is not a concept that they support at this point in time because it has been cherrypicked out of a broader reform agenda which should be, frankly, a higher priority for the government, because I think all of us want the government to be promoting new investment, new ideas and new competition, and we also want our governments to be protecting consumers as far as possible. So we think it's an appropriate and proportionate amendment to this bill, on the basis that we'll come back and provide a set of regulations and laws for digital assets as part of a comprehensive agenda rather than something that's being cherrypicked out of nowhere.</p> <p class="speaker">Katy Gallagher</p><p>This is the amendment on sheet 1858?</p> <p class="speaker">Andrew McLachlan</p><p>Yes.</p> <p class="speaker">Katy Gallagher</p><p>We will be opposing this. Schedule 2 will provide taxpayers with clarity following El Salvador's decision to adopt bitcoin as legal tender from September 2021, which created uncertainty about the tax status of bitcoin in Australia. Schedule 2 should not be removed. It seeks to maintain the status quo in the taxation of transactions involving digital currency. Repealing schedule 2 would pose a revenue risk, as ongoing uncertainty could see taxpayers in similar situations adopting different tax treatments, with some deliberately choosing the most favourable interpretation.</p> <p class="speaker">Andrew McLachlan</p><p>This is one of those ones where I have to put the question in the affirmative. Even though the government are opposing what Senator Bragg wants, they will be voting yes and the opposition are voting no.</p><p>You're able to ask a question. I'm just clarifying. You can continue questions on this matter in committee. I haven't closed it off.</p> <p class="speaker">Andrew Bragg</p><p>I guess my main question is whether Treasury now knows how much revenue might be gained or lost.</p> <p class="speaker">Katy Gallagher</p><p>Because the measure is to keep the tax treatment the same, it is difficult to cost. I think we did go through this at estimates, so there is no update to what was covered—or it might have been another committee, but it's certainly been discussed.</p> <p class="speaker">Andrew Bragg</p><p>The point here, then, is that this measure is designed to be an integrity measure, but the Treasury have no idea what revenue is at stake here. Is that right?</p> <p class="speaker">Katy Gallagher</p><p>Senator Bragg is right about it being an integrity measure, so that is the point of this amendment. I am advised that that decision by El Salvador has created uncertainty about the tax status of bitcoin in Australia and specifically whether it can be considered a foreign currency for tax purposes. This uncertainty could affect a large number of taxpayers. Over one million Australians are expected to report on crypto assets in their 2022-23 tax returns, and bitcoin is the most popular crypto asset in Australia.</p> <p class="speaker">Andrew Bragg</p><p>Minister, can you provide some more information on the regulation-making power that the bill includes and maybe explain what you think that might be used to do?</p> <p class="speaker">Katy Gallagher</p><p>The digital currency space is constantly evolving. We are confident that the legislation is broad enough to capture the digital currency it needs to. However, having a regulation-making power allows us to quickly deal with unforeseen circumstances—for example, if a country adopts digital currency that may not be captured by the proposed definition. The policy for the legislation is clear: digital currencies are not foreign currency for tax purposes.</p> <p class="speaker">Andrew Bragg</p><p>Can those regulation-making powers be used in the future to determine that a particular asset is either an asset or a currency? How will that be used in the future? Will it be used to allocate, effectively, and define digital assets?</p> <p class="speaker">Katy Gallagher</p><p>I'm advised that the regulation power doesn't determine whether something is a currency but whether something is a foreign currency.</p> <p class="speaker">Andrew Bragg</p><p>Sorry, is that what the regulation-making power does or is that what the bill does? I'm just unclear on what the regulation-making power therefore is.</p> <p class="speaker">Katy Gallagher</p><p>Yes.</p> <p class="speaker">Matt O'Sullivan</p><p>Senator Bragg, just to be clear, and so that it's on <i>Hansard</i>: you asked a question and there was a response.</p> <p class="speaker">Katy Gallagher</p><p>Yes, sure. My understanding, and I'll be corrected if I'm wrong, is that we believe the legislation is broad enough to capture the digital currency it needs. However, in the event that there is a similar situation to the one that has arisen, which has led to this amendment, then the regulation power would allow us to deal with that. It is, in a sense, an unforeseen circumstance that is yet to occur.</p> <p class="speaker">Andrew McLachlan</p><p>The question before the chair is that schedule 2 stand as printed.</p><p></p><p></p> -
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