Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

I rise to speak on the Tax Laws Amendment (2012 Measures No.5) Bill 2012. The coalition has a number of amendments to this legislation, which I understand the government is quite sympathetic to. My parliamentary colleague the member for Groom will be detailing those in much greater sophistication than I am able to at this time.

The bill does a number of things. It deals with the conservation tillage refund tax offset and some amendments to the definition about what is an eligible no-till seeder. It also phases out the mature-age worker tax offset, something I am particularly alert to, having been involved with the development of what was known as the mature age employment advantage in my electorate, where men and women over the age of 45 were finding it particularly challenging entering the workforce.

Through a local initiative that we organised through the Peninsula Job Team, we were able to bring together a range of providers to help mature-age people to re-enter the workforce with encouragement, which ultimately led to Prime Minister Howard announcing the mature-age worker tax offset in my electorate.

There are also some provisions dealing with gaseous fuels, and I am pleased that the coalition continues to be highly alert and receptive to the concerns of the LP gas industry, and the gaseous fuel industry more generally, about the impact of tax and compliance regimes on this important part of the economy. I am delighted that the member for Groom has arrived, and I might conclude my remarks at that point and thank the House for accepting that gripping contribution to the bill.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

Thank you very much, Mr Deputy Speaker—and, as this is my first opportunity at the dispatch box to do so, can I congratulate you on your election to Deputy Speaker. It has been some time coming, but good always prevails and right always comes to the fore.

I will be moving an amendment to this bill in the consideration in detail stage, as circulated, which particularly relates to the LPG component of the bill. I will now speak to that. Whilst the coalition and opposition in general supports the amendments proposed under the TLAB, we certainly do not support the sections of the bill as they relate to the introduction of a huge compliance cost, particularly to small business, in relation to the taxation and the levying of an excise on gaseous fuels. These fuels are LPG, LNG, CNG—or compressed natural gas. These fuels are of course not only clean-burning fuels, and therefore something that is helpful in terms of the environment—and I would have thought those in government would understand that—but, secondly, these are fuels which Australia is overly endowed with; in fact, we are exporters of these fuels. We export LNG from the North-West Shelf and we have an excess of natural gas in its forms of compressed natural gas and liquefied natural gas. Australia is heading towards being the largest exporter of that gas in the world.

What we are short of in Australia, unfortunately, is liquid fuel—that is, crude oil or condensate—and so it makes absolutely no sense to me, or to Australians in general, that we introduce an excise on these gaseous fuels, yet this is what the government did last year. So desperate for money are they that they will tax anything that doesn't move, and if it doesn't move they push it and then tax it. We know that they are desperate for cash, we know they spend money day in, day out that they cannot bring back into balance—and, of course, we saw last week with the MYEFO that they are able to actually get themselves in such a position where they are so desperate for money that they are now going to tax businesses, including small businesses with a turnover of $20 million or more. They are going to make them pay their income tax not quarterly but monthly. So they are going to make them pay 14 months' tax in 12 months. This just highlights how out of control the spending is by those who sit opposite us in government.

The requirements and compliance regime being introduced under this TLAB bill and the excise being placed on gaseous fuels by this government is extraordinary red tape. They come into government and say that they are going to ease the compliance burden; but, as we know, all they have done is increase it and increase it and increase it. There is compliance burden on the small businesses that I talk to, whether they are in my hometown of Toowoomba or whether they are in Whyalla where I was last week. Geez, they remember the Minister for Trade there well—not nicely, but they remember him well. I doubt they will ever forget him.

David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Link to this | Hansard source

They are still there.

Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Link to this | Hansard source

Despite the predictions of the AWU, they are still there. They are just waiting for the return of a decent government that will abolish the carbon tax, abolish the mining tax, ensure that there is a predictable environmental permitting system and ensure that nothing changes so that they do not wake up every morning in Whyalla and find that the government has imposed another new tax.

What we have in front of us today is a compliance regime which allows—let us call it—John Smith's Tent World to sell LPG, and they have been selling LPG to happy campers for a long time. They now have an enormous compliance burden because, if that LPG is used in transport fuels, they now have to fill out a whole heap of forms to say that it was not. If it happens to be the local BP—and I have a local BP that I use in east Toowoomba—they refuel your car with LPG, if you have got an LPG car, and they also refill your gas cylinders for your barbecue or whatever. Their compliance burden under this bill is enormous, because some of the gaseous fuel they sell will be taxed and some of it will not be. So, rather than just having to report the fuel that is taxed, of course you have to report everything. This is a government that has taken red tape to a new level.

The compliance measures contained in this bill have not been previously announced. The LPG industry, small business and let alone the users of LPG have never been consulted about these compliance measures. Had they been, there would have been a more sensible approach to this measure. If we look at the detail and the complexity of this, we realise that the government has got absolutely no idea of what it is doing with it, other than burdening business with a whole new level of red tape. The government says that this measure is necessary to get around administrative difficulties—which they created. So they create an administrative difficulty by taxing a gaseous fuel that is more environmental friendly than conventional fuels and then they say to small business: 'You not only have to pay in terms of paperwork and red tape but you're to blame. You're the reason we're doing this.' How crazy are they?

These amendments are clumsy at best. They go way beyond and are more arduous and stricter than the current Excise Act obligation for conventional fuel sellers and others obliged to collect excise. Let us look at the model. For 100 years or thereabouts, governments have been collecting excises in various forms. We have a model that works. If you sell petrol or you sell distillate or if you sell perhaps a little bit of kerosene—not so much these days—then you have an excise regime which your business has to follow. It works. Everyone is used to it. Everyone understands it. So why don't we use that? No. Far too simple. Nowhere near enough red tape in that. So government is introducing a regime just for gaseous fuels which is far more onerous and far more arduous than the regime that is currently in place.

It is stated that this legislation will ensure the 2011 alternative legislation on excising gaseous fuel works as is intended. If the intention is to collect excise from businesses for gaseous fuels then we say firstly that that should not have been excised in the first place. We want to encourage the use of fuels for transport that are actually plentiful in this country in order to help our balance of payments and to make public transport cheaper so that we have buses running on CNG and trucks running on CNG and LNG, with less particulates, less pollution in the environment.

But then comes along the member for Lilley, the Treasurer. If he sees something he will tax it. So he has taxed it and now he has to try and work out how he is going to collect the tax. But, as I say, had he gone to the businesses and asked them how they would do this, this would not have been the way. Under this bill, premises for producing, importing or storing liquid fuels, petrol and diesel, are subject to licensing, and consequently untaxed liquid fuels do not appear in the marketplace. So that system works well. It has been around, as I say, for nearly 100 years. There are automatic remissions to fuel tax where LPG is going to be used for non-transport fuel, but that is after you have done all the paperwork.

CNG receives an exemption when it enters the marketplace as a non-transport use, but you have to identify that that has happened. It is not assumed that if Joe's Barbecue Shop is selling LPG that he is actually selling LPG for barbecues. You could never assume that, not if you are in government. You actually have to envelope, encase, that business in a pile of red tape to ensure that only those fuels that can be shown not to have been used in transport use are given an exemption.

The intention is that the compliance cost under the proposed regime will be lower than that applying to fuel tax to all gaseous fuels that enter the marketplace with subsequent fuel tax credits where appropriate. The gaseous fuel compliance regime would be based on obligations to maintain and produce appropriate records to provide access to premises, documents and goods. But in reality the government has introduced a layer of complexity not ever seen before in the excising and taxing of transport fuels. There is far more compliance, far more complexity, far more cost for small business and, of course—and here comes the next bit—it is far more difficult to be able to prove that you have done the right thing. So you have to keep your records for five years. You are open to an inspection at any time and under any terms. That places enormous pressure on small businesses not only to have the records but to have them there on site for inspection.

Subject to the following paragraph, schedule 3 is to be opposed because the amendments are more onerous and stricter than the current Excise Act obligations on conventional fuel sellers and others who are obliged to collect excise. We have a proven system; let us use that. Item 20 in part 2 of schedule 3, which will treat a forklift truck used off public roads as not being a motor vehicle for the purpose of the Excise Act is not opposed. They actually got one thing right, and we give them credit for that. We give them credit for actually realising it. I do not know if they have ever driven a forklift, but I have. If you have a forklift you are hardly going to be cutting laps around a city block in Toowoomba. They are there for the removal of produce, usually from the backs of trucks, or for moving produce round a warehouse.

In other respects, parts 1 and 2 of schedule 3 will increase the red tape burden, especially for small business and LPG, and the existing provisions in the Excise Act regarding record keeping, officials' access to premises and imposition of penalties for the supply of gaseous fuels subject to the fuel tax relief for transport use are amply sufficient. Why is it that this government does not get small business? Why is it, as Kim Beazley said famously once, the Labor Party is not the friend of small business? Why do they see a small business and want to tax it? Why do they see a small business and want to impose red tape? Why do they see a small business and make it harder for that small business to employ people? This is a clear example of what this government does to small business. There is no respect for them, no understanding of them, no understanding of the cost that they are burdening them with.

The coalition will not stand by quietly and watch small business get it in the neck again as a result of this government's incompetence and, of course, their fundamental failure to manage their own money—the fact that every time they look up they have to find a new tax to keep their wild and exorbitant spending in check.

In conclusion can I say, as I said at the opening, that these measures have not been previously announced. It is stated that the purpose is to ensure that the 2011 alternative fuels legislation works as intended, but I can assure those who sit opposite that if they consult with the coalition—and we accept that we lost the vote last year—with the LPG Association and with small business then we will find a way to make this work under the current compliance regime. We do not need a whole new level of red tape. There are, as I said, specific legislation exemptions—for example, where the duty has been paid at the same rate on each component of the blend—and we continue to work with the government to ensure that that works. Can I just say in conclusion, foreshadowing the amendment, that we are interested in good government. This is not good government.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

The Tax Laws Amendment (2012 Measures No. 5) Bill 2012 is the fifth tranche of legislation introduced in 2012 for the amendment of our tax laws. It shows that the government is committed to continually adjusting our taxation arrangements to ensure they are appropriate for meeting our revenue targets, to remove loopholes and unintended consequences as they are thrown up, to ensure that they continually operate efficiently and as intended, and to ensure that we meet our commitments to ensure that the tax take, as a proportion of GDP, is no greater than it was when we took office. The opposition spokesperson has recently made some comments about the size of the tax take under this government, but what he will not have told the House is that the highest taxing government in the history of this nation was the Howard government. The only way to measure this is to measure the ratio of tax to GDP. It is at record lows under our government. It was at record highs when we came to office. If you want to look at handing out gold medals for the highest taxing government in the history of Federation, you need look no further than the Howard government. You would not mind so much if they were not spending like drunken sailors at the same time, but that is indeed what they were doing, in stark contrast to those on this side of the House, who have done the hard yards in ensuring that we can find the savings in this year's budget, in the Mid-Year Economic and Fiscal Outlook statement and throughout the course of this year to ensure that we meet our commitments. You hear those on the other side of the House continually claiming that there are savings there to be found, but every time we put a saving up they are the first to be screaming, 'We can't support this.'

So I am very pleased to be speaking today on this bill, which contains a number of measures which deal with various taxation issues. Schedule 1 of the bill makes a minor technical change to the conservation tillage refundable tax offset, amending the definition of 'eligible no-till seeder' to ensure that the offset applies to the purchase of just the tool as well as the combination of the cart and the tool. This amendment will assist the government's objective of encouraging the uptake of conservation tillage practices by removing the existing requirement that a new cart also be purchased at the time a new no-till seeding tool is purchased. It follows industry feedback on the current eligibility requirements. It is a measure which should, and I hope will, enjoy the support of all members in this place.

Schedule 2 contains measures to phase out the mature-age worker tax offset, otherwise known as MAWTO, from 1 July 2012 for taxpayers who were not already 55 or older on or before 30 June 2012—that is, those born on or after 1 July 1957.

Those currently eligible because they were aged 55 years or older on 30 June 2012 are unaffected by the change and remain age eligible for the mature-age worker tax offset—that is, the provisions are not retrospective. By closing off the offset to new recipients and investing in better-targeted participation programs, the government will improve the value for money while protecting those who have built the offset into their household budgets.

The offset is a cost to revenue in the order of $450 million per year. It is not an efficient way to promote participation amongst those aged 55 and above. We remain committed to encouraging the retention and the re-entry into the workforce of those mature-age workers. It is estimated that under the existing arrangements, however, only 5,000 full-time-equivalent workers are encouraged into the workforce through the offset. This equates to a cost of about $90,000 per encouraged worker, hardly an efficient tax expenditure. We on this side of the House—and I hope that this is a measure which enjoys the support of all sides of the House—believe that there are more effective and efficient ways of pursuing this worthy aim.

It is important that the government channels its efforts to encouraging workforce participation among older Australians through more cost-effective programs. The government is introducing a new $26 million Mature Age Participation—Job Seeker Assistance Program, for example, from 1 July 2013 to provide eligible mature-age job seekers aged 55 and over with a peer based environment in which to develop their information technology skills, undertake job-specific training and prepare for work.

The government's $41 million response to the final report of the Advisory Panel on the Economic Potential of Senior Australians includes a $10 million initiative for new jobs bonuses, which will encourage businesses to employ older Australians who want to stay in the workforce—another example of a better-targeted program for assisting the retention and employment of older Australians.

And then there are the $1,000 bonuses which will be paid to employers who recruit and retain a mature-age job seeker for three months or more. I see the Minister for Employment Participation at the table. It is an excellent initiative, and I congratulate her on the great work that she has done in not only proposing this measure but ensuring that it has survived the rigours of the Expenditure Review Committee.

I also point to the $15.6 million extension of the successful Corporate Champions program to provide support to employers who wish to promote mature-age employment at their workplace. This is a scheme that I know through my work in my electorate has enjoyed a lot of support from the many retired professionals and executives who live in a few parts within my electorate, who have decided that they do not want to continue to participate in a full-time role in the work that they do but would be willing to provide voluntary or more part-time work through a program such as this.

All of these are excellent examples of how we can better target the assistance from government to employ and retain mature-age Australians.

There are several other schedules within the bill, most of which have been ventilated in the debate before the House. There is one provision that I will draw your attention to, and that is schedule 5, which amends the list of deductible gift recipients in the Income Tax Assessment Act to add the Diamond Jubilee Trust Australia. The Diamond Jubilee Trust has been established to raise funds in Australia for the commemoration of Her Majesty's diamond jubilee. I am a well-known republican myself, but that does not stop me wanting to support an important initiative such as this, because the purpose of this trust is to provide charitable and aid works in developing countries. It would be churlish of me indeed not to support such a worthwhile initiative.

These are all important amendments which should enjoy the support of all members in this place. I commend the bill in its entirety to the House.

David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Link to this | Hansard source

I think this is my first opportunity to speak with you in the chair, Mr Deputy Speaker Scott, so congratulations on your appointment. I begin by thanking all of those members who have contributed to this debate on the Tax Laws Amendment (2012 Measures No. 5) Bill 2012.

Schedule 1 amends the definition of 'eligible no-till seeder' for the purpose of the conservation tillage refundable tax offset, which is located in subdivision 385-J of the Income Tax Assessment Act 1997. This will allow primary producers access to the conservation tillage refundable tax offset where they purchase only a no-till seeding tool to attach to their existing cart. This small but important change will enable more primary producers to purchase no-till farming equipment without requiring them to replace their existing carts. This measure will help to achieve the government's objective of encouraging no-till farming practices, which can reduce emissions, increase soil carbon and improve productivity.

Schedule 2 will phase out the mature-age worker tax offset from 1 July 2012 for taxpayers who were not already 55 or older on or before 30 June 2012—that is, those born on or after 1 July 1957. The measure will not take away the mature-age worker tax offset from those people already receiving it. The government will improve value for money by phasing this offset out over time and investing in better-targeted programs, while protecting those people who already rely on the offset in their household budget.

Schedule 3 amends the excise law by putting in place a robust and sustainable compliance regime for gaseous fuels—that is, liquefied petroleum gas, or LPG; liquefied natural gas, or LNG; and compressed natural gas, or CNG—while keeping compliance costs lower than the fuel tax regime that applies to liquid fuels. The amendments ensure that suppliers of duty-free gaseous fuels, whether licensed or unlicensed, keep adequate records and provide access to ATO officials if required. There is an appropriate penalty regime to encourage compliance. The amendments also clarify the tax treatment of gaseous fuels used in forklifts and fuel manufacture.

Schedule 4 clarifies the Commissioner of Taxation's power to make legislative instruments to deal with the treatment of gaseous fuel blends instead of relying on legislative exemptions.

Schedule 5 amends the deductible gift recipient provisions of the Income Tax Assessment Act 1997. Taxpayers can claim an income tax deduction for gifts to organisations that are deductible gift recipients. The measure adds one new organisation to the act—namely, the Diamond Jubilee Trust Australia. Making this organisation a deductible gift recipient will assist it in attracting public support for its activities. The trust has been established to celebrate Her Majesty Queen Elizabeth II's diamond jubilee. The purpose of the trust is to deliver charitable projects for the support of individuals, with a focus on the poor and disadvantaged, through providing collected funds to the United Kingdom based Queen Elizabeth Diamond Jubilee Trust.

Schedule 6 amends the wine equalisation tax producer rebate provisions to ensure that a wine producer cannot claim a rebate for wine used in manufacture except where the previous producer or supplier provides a notice that a previous producer is not entitled to the rebate on part or the whole of that wine. The measure addresses a problem in the current law where multiple rebates can be claimed on the same quantity of wine. The amendments apply to assessable dealings on or after 1 December 2012 or the day on which this act receives royal assent, whichever is the later.

I note that the member for Groom has foreshadowed that he will be moving some amendments, but I also understand that, as a consequence of discussions that have been held since that time and an offer that has been made by the government to withdraw from this bill schedules 3 and 4, those that relate to gaseous fuels, this bill will proceed with the support of the opposition and that the member for Groom will not be moving the amendments that he has foreshadowed. I thank the opposition for their cooperation in this matter.

I do put on record, though, that the government does believe that schedules 3 and 4 of the bill both represent important improvements to Australia's excise system and that we will seek to reintroduce the schedules at another time. I foreshadow, then, that we will be looking to amend the bill to remove schedules 3 and 4 so that the remaining schedules of the bill can proceed. I seek leave to continue my remarks at a later hour.

Leave granted; debate adjourned.