Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

What is going on now, I will just place on record, is a desperate attempt at a joint filibuster by the Labor-Greens coalition. And Senator Milne just misled the Senate. She just indicated to the Senate that the Palmer United Party amendment never went to the Senate committee. Well, it actually did go to the Senate committee. When we circulated the amendments towards the end of last year, Senator Xenophon asked me to facilitate a briefing by Treasury and relevant others to all interested members of the Senate economics committee. It was a very productive and constructive meeting. The government absolutely acted in good faith. Our preferred approach was to go down the path that Labor initiated and banked in their last budget. But because Labor under Bill Shorten's leadership is too weak to stand up for the national interest and too weak to do what needs to be done to repair the budget and strengthen the economy, we are in the situation where we have no choice but to negotiate with the crossbench.

I have answered these questions many times before, and if you go over Hansard you will see that I have. You asked me again: what is difference between what the government is proposing and what the Palmer United party amendment is proposing to achieve? The policy intent behind both approaches is to ensure that special tax incentives for research and development are properly targeted—that they do not go to the biggest, most profitable businesses but are appropriately targeted to small and medium-sized businesses where the research, including through the OECD, consistently shows that those incentives actually make a difference. The approach that we put forward in our legislation was for any business with an assessable income—relevant profits above $20 billion—to be excluded from the 133 per cent tax deduction and to only be eligible for 100 per cent tax deduction for their expenditure on research and development.

As to the issue that was raised—and, again, we have gone round and round in circles in relation to this, and I have been very clear in relation to this—the Palmer United Party said to us: 'What we worry about is that that means that, if you generate most of your profits in Australia, you are slightly disadvantaged compared to a business that generates some profits in Australia but most of their profits in other parts of the world.' They asked us to consider whether we could achieve the same policy intent using a different methodology, and that is by putting a cap on the special benefit that is available to larger businesses for their research and development expenditure. The cap that is on the table is a $100 million cap, and the advice from Treasury is that that means that we will generate broadly the same savings, and that broadly the same businesses, the same companies, will be impacted.

Senator Carr is trying to confuse people and run red herrings about firms and consolidated groups. The truth is that these things are always, consistently, as a matter of standard operating procedure, assessed at the level of consolidated groups. That is the way this works. No amount of red herrings is going to distract from the fact that this is a very personal agenda that Senator Carr continues to run against the former Prime Minister and the former Treasurer. I am not interested in getting in the middle of Labor Party factional infighting. I am totally not interested in that. I am interested in doing the right thing in the national interest. All I am interested in is progressing a budget measure that was initiated and banked by Labor in their last budget. We are doing Labor's hard yards for them, even though Labor has turned against themselves on this.