The Government has introduced Tax Laws Amendment (2008 Measures
No. 1) Bill 2008 to implement a number of improvements to Australia’s
taxation system, including the following:

Superannuation Lump Sums Paid to the Terminally Ill
The Bill will ensure that superannuation lump sum payments that are
paid to a persons suffering from a terminal medical condition will be
tax free, subject to conditions.

The Rudd Government has brought forward the date of effect for the
measure so that it applies to payments made on or after 1 July 2007
rather than the 12 September 2007 that was originally announced by the
former government.

Tax Deductibility for Trees Established in Carbon Sink Forests
This measure will encourage the establishment of carbon sink forests
and highlights the Government’s commitment to addressing climate change.

Under the changes the establishment costs will be immediately
deductible for trees established in carbon sink forests in the 2007-08
to 2011-12 income years inclusive.  After this initial period,
establishment costs will be deductible over 14 years and 105 days at a
rate of 7 per cent per annum.

To be eligible for the deduction, the taxpayer must be carrying on
a business and the carbon sink forest must meet Environmental and
Natural Resource Management Guidelines.

Political Donations
The Government will remove the tax deductibility of political
donations made on or after 1 July 2008 in line with its election
commitment.

The  Government is repealing the specific deduction provisions in Division 30 of the Income Tax Assessment Act 1997,
which currently allow deductions for contributions and gifts to
political parties and to independent candidates and independent members
up to a maximum of $1,500.

In addition, to ensure that a deduction is not available, these
amendments also remove general deductions for business taxpayers for
contributions and gifts to political parties, members and candidates.