Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Hansard source

I appreciate your intervention, Madam Deputy Speaker, but this does go directly to the matters contained within this bill. What is more concerning is that the tax-free status that Mr Flugge enjoyed was gained by a change to the tax laws in 2005. In January last year, the Howard government moved to introduce special legislation to negate that liability and to restore the tax exemption for certain Australian workers in Iraq, including Mr Flugge. That legislation delivered a windfall of several hundred thousand dollars to Mr Flugge.

Labor supported the legislation last January in good faith, but we now know, or at least suspect, that the legislation was passed partly to accommodate Mr Flugge. In today’s Sydney Morning Herald a spokesman for the Assistant Treasurer, Mr Dutton, said he could not say if anyone had lobbied for the changes to the law. I am very pleased Mr Dutton has been able to join us in the House because that will give him an immediate opportunity to respond. Labor questions the role Mr Flugge played in securing this tailor-made tax exemption for himself, and I now invite the minister to confirm that this change to section 23AG was not done at the behest of Mr Flugge, Mr Long or anyone else at the Australian Wheat Board.

I want to close by reaffirming my request to the minister to address those issues and then by going back very quickly to this debacle we have had in the drafting of tax legislation over the last few years, not just under Minister Dutton but also, and even more markedly, under Minister Brough. We became fond of calling them ‘Brough-ups’ on this side. I have not quite been able to determine a colourful phrase to better describe them under Minister Dutton. He must by now, surely in his own mind, agree with me that the errors in tax legislation identified after they have been introduced into this place have been extraordinary and unacceptable. I am sure they are not only unacceptable to me and the opposition but also to the army of tax experts, accountants, that have to deal with the interpretation and the application of the legislation and of course to their clients, small business operators amongst them.

I had an article in the Australian recently on the issue of compliance for small business in which I also canvassed various things the government could be considering for the small business sector in the area of taxation. They ranged fairly widely—all the way from maybe extending and tidying up the application of the entrepreneurs tax offset through to a special corporate rate for small firms and another model for delivering a lower rate for unincorporated firms on the money they receive for the sale of goods and services.

I note that I have had no response at all from the government side on these proposals, neither from Minister Dutton nor from the minister for small business. It makes me wonder where the government’s mind is. It says it wants to do something about compliance for small business yet it is consistently putting flawed tax laws into this place. The fact is, while the government likes to talk lots and lots about reducing compliance for small business—indeed, prior to the 1996 election it promised to reduce red tape for small business by 50 per cent—it has done nothing.

In any case, while we will all continue to strive towards lower compliance costs, towards less red tape, for small business it will always be there. That is the unfortunate reality of the way government legislation impacts upon business, in particular small business, which does not have the resources to absorb it as well as larger firms do. The reality is it will always be there and the government should be looking on the other side of the equation at how it can compensate small business for the disproportionate way in which red tape and compliance falls upon it. The best way it can compensate small business for that is of course through the tax system—looking at models to deliver a lower taxation regime for the risk and effort of small business persons and as a means of encouraging entrepreneurship in this country.

The silence coming from the government on this issue is absolutely deafening. So, again, when the minister gets to his feet he might be able to share his views on the proposals I put forward just now or the proposals I put forward in the Australian newspaper recently. He has had plenty of time to read them between now and then, and I cannot believe that the government would not have looked at those proposals and attempted at least to develop a response to them.

I invite him to respond to those ideas—very good ideas, I think—for small business but also, and even more particularly, on this occasion to respond to the suggestion I have made that the changes to 23AG were made after the event in the case of Mr Flugge and at the behest of Mr Flugge to ensure that the $1 million he earned while overseas was not partly subsidised by the Australian taxpayer.

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