Senate-backed tax review means everyone's a winner: ASA

Senate-backed tax review means everyone’s a winner: ASA

Industry participants have welcomed a Senate recommendation to review the Income Tax Assessment Act, in a bid to ensure pay equity between Australian seafarers and seafarers of other nations when working on foreign-flagged vessels. The Senate Standing Committee on Employment, Workplace Relations and Education’s review into workforce challenges in the transport industry, recommended that section 23AG of the Income Tax Assessment Act 1936, and the meaning of &#8220foreign service&#8221 for income tax purposes, be reviewed. Australian Shipowners Association director for maritime operations, Teresa Hatch, said she was &#8220delighted&#8221 with the findings of the standing committee report. &#8220The recommendation that section 23AG of the tax act be reviewed is one of those rare `everyone’s a winner’ situations &#8211 school leavers, defence, employers, government, offshore industry, oil and gas sector, ports and marine pilots will all benefit,&#8221 she said. &#8220The senators have identified the key issues affecting maritime skills and apportioned responsibility for action in a way that will drive outcomes. &#8220The challenges that the committee has set the industry to sort out are significant and work has already begun on many of them &#8211 we look forward to taking the findings of the report and building on the work currently underway for the training and retention of seafaring skills.&#8221 In its current incarnation, the Act treats Australian residents working overseas on ships differently to Australian residents working overseas. For example, an Australian resident working in Hong Kong for more than three months is taxed at local Hong Kong tax rates, while an Australian resident working for the same period of time on a ship overseas (of any nationality) is subject to Australian tax rates. &#8220The reason is that the Federal Court has held that the exemption from the Act for Australian residents `engaged in foreign service’ applies only to those who work in a `foreign country’ and that `a foreign country’ does not include those who work on the high seas,&#8221 Ms Hatch said. Throughout the inquiry, the committee heard that a major difficulty for operators in managing their workforce was the industry’s low profile. It identified a broad lack of awareness of career options in transport, as well as poor perceptions of the industry as dirty, unsophisticated, blue-collar and generally lacking in appeal, as contributors to skills shortages and problems attracting workers in every sector, from road and rail to shipping and aviation. &#8220The bipartisan nature of the Senate committee should guarantee support for a simple amendment which will throw open the doors of opportunity to young Australians considering a seafaring career,&#8221 Ms Hatch said.

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