Additional Comments from Labor Senators


Additional Comments from Labor Senators

1.1        Labor Senators support the following schedules:

  1. Schedule 1—OECD Hybrid Mismatch Rules
  2. Schedule 2—Other effects of foreign income tax deductions
  3. Schedule 4—Income tax and withholding exemptions for the ICC World Twenty20
  4. Schedule 5—Deductible gift recipients

Schedule 3: Strengthening the integrity of the film producer offset

1.2        Labor Senators note comments by the Media Entertainment and Arts Alliance (MEAA) that there was a lack of consultation on this measure and the measure will be applied retrospectively:

MEAA is concerned that this measure has been developed without any apparent consultation with industry participants. We are also aware that the measure will have retrospective application. MEAA opposes changing the rules mid-stream. It is the epitome of bad faith and could only have a negative impact on affected projects.[1]

1.3        Screen Producers Australia (SPA) made similar comments:

SPA has two preliminary concerns with the Bill as proposed:

  • the absence of any precise identification of a problem that needs to be

fixed, and

  • a lack of industry consultation..

...

3) Retrospective application: The Bill commences on 1 July 2017. This raises constitutional problems through potential acquisition of property and interfering with the value of contracts entered into in good faith. This leaves the Commonwealth potentially liable to pay “just terms” for any property acquired.[2]

1.4        Matchbox Pictures also made the point that a Regulatory Impact Statement (RIS) has not accompanied this measure:

The proposed amendments do not appear to be supported by a regulatory impact statement; and may have significant unintended consequences. We are especially concerned that these changes could have retrospective application and have not been able to calculate any potential effect on our business.[3]

1.5        Given the evidence received, Labor Senators believe that  the bill should be amended to remove the retrospective application of Schedule 3 and that the government consider a post-implementation review of Schedule 3 in order to evaluate the impacts of the integrity measure.

Recommendation 1

1.6        That the bill be amended so that the start date for the Schedule 3 measure, relating to strengthening the integrity of the film producer offset, is 1 July 2018 in order to remove retrospectivity.

 Recommendation 2

1.7        That consideration be given to a post-implementation review of the Schedule 3 measure at the earliest appropriate time.

Recommendation 3

1.8        That the amended bill be passed.

Senator Chris Ketter Senator Jenny McAllister
Deputy Chair Senator for New South Wales

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