Bernie Ripoll (Oxley, Australian Labor Party) Share this | Hansard source

It is a pleasure to follow-on from the member for Wakefield in his contribution on this very important bill and I am also pleased to be speaking on International Tax Agreements Amendment Bill (No. 1) 2009. I want to put on the record my congratulations to the Treasurer as well as the Assistant Treasurer and the Minister for Competition Policy and Consumer Affairs, for introducing this bill. They have put into place some needed reform on tax evasion and some bilateral agreements in terms of taxation, to ensure that Australian citizens do not pay double tax on their employment or on the income they derive from the British Virgin Islands or the Isle of Man. It is a non-controversial bill that is supported by both sides of the House. The bill seeks to give the force of law to taxation agreements with the British Virgin Islands and the Isle of Man. The bill will enact the texts of both the British Virgin Islands agreement and the Isle of Man agreement into domestic law. It will be done via the International Tax Agreements Act 1953. This is a prerequisite to the agreements having entry into force. There is no major impact as yet or forward estimates that have been done by Treasury, and so it is welcome in all of those cases.

The issue of tax is always of great interest to all people. I have no doubt that everyone takes a lot of interest in it. While most people in some context complain about taxation generally, I think we all understand the need for fair and proper taxation, that everyone pays their fair share of tax so that governments can deliver the sorts of services that people expect, such as strong education systems as we are seeing through Building the Education Revolution and proper health provision. Certainly the Commonwealth is taking a much broader and greater interest in the provision of infrastructure across this very vast nation of ours. It is important that we get taxation right and that people pay their fair share. As we heard from the previous member, it is usually the case that PAYG tax earners—ordinary people—absolutely do pay their fair share of taxation. But sometimes, as we have seen through certain operations of the Commissioner of Taxation and other efforts that the government has put in place, there are some high net wealth individuals who seek to minimise or even avoid their tax obligations to all Australians. We will continue to work to make sure that we have got the right sort of regime in this country so that everybody pays their fair share. One of the ways to do that is through agreements with other countries, particularly in areas where wealthy individuals may use the laws of another country to avoid their duty of paying tax in this country.

So I really do welcome this agreement and congratulate the British Virgin Islands and the Isle of Man for helping process both of these agreements. The agreement with the British Virgin Islands contains provisions for the avoidance of double taxation in relation to individual income that flows between Australia and that place. The agreement was prompted by Australia’s desire to conclude a bilateral tax information exchange agreement, TIEA, with the British Virgin Islands. It establishes a legal basis for the exchange of taxpayer information between the two countries, which of course is an important tool in managing the proper tax affairs of Australia and will play its part in combating tax avoidance and direct tax evasion. These are evolving processes but processes that governments need to have in legislation to ensure that we have a proper exchange of information.

Once it takes effect, the TIEA, which was signed in October last year, will directly assist the Commissioner of Taxation in obtaining certain information so that Australian residents cannot hide information or in some way evade their tax responsibilities to all other Australians. The British Virgin Islands agreement is part of a package of additional benefits that have been offered through the arrangements we have put in place. It will also allocate certain taxing rights and prevent the double taxation of income from Australians and residents of the British Virgin Islands specifically directed at government employees, students and business apprentices.

Essentially, Australia has agreed not to tax the salaries of government employees who are working in the British Virgin Islands in government services for non-commercial purposes and a range of other activities per agreement between the two countries. We will also agree to maintain the existence of education or training payments received by students or business apprentices from the British Virgin Islands. So there are some areas where, through agreement, we do not confuse the proper employment and taxation of people in those areas with anything remotely connected to avoidance or evasion of taxation.

The Isle of Man agreement, which is very similar, has the same provisions in the avoidance of double taxation of individuals flowing between Australia and the Isle of Man. It came out of the government’s desire to conclude a bilateral tax information exchange agreement to make sure that we can access the proper and correct information of individuals who are employed or deriving some income in those areas or using the Isle of Man as a tool to avoid or evade tax. I am sure that all members of this House, and all good citizens, would agree that these are important measures for making sure that payment of a fair share of taxation by all Australian citizens is properly provided for, and we all welcome that. The TIEA was signed on 1 January this year. It will help the taxation commissioner obtain that essential information that flows between the two countries. That critical information will mean the difference between people avoiding or evading tax and people paying their fair share as part of their responsibilities to every other Australian in this country.

The issue of taxation is always raised with me at different levels in communities around my electorate and with individuals. It is always about the proper expenditure of taxation, not just in the sense that all Australians ought to pay their fair share but where that taxation money is spent. It is a great credit to the Rudd Labor government that that money is being spent well. It is being spent well through the largest infrastructure program this country has ever seen. It is being spent on the education of our kids and on the modernisation of our schools and in making sure that students have access to the best possible facilities anywhere in the world.

If we are truly to compete on an international platform in whatever areas we choose and our young people choose, then we need to be able to provide the right sorts of facilities and the right sorts of resources, and this is certainly being done by this government. We are very proud of that. Coming from the western corridor of Brisbane as I do—and I note that the Minister for Infrastructure, Transport, Regional Development and Local Government also comes from the western corridor but in a different state—I understand just how important it is to deliver that critical infrastructure and the importance of finding extra funding in tough economic times. As we have seen with the global financial crisis, this government has acted in the worst of times but provided the most that it possibly could in all of those areas. Whether it is providing much needed funding to schools through Building the Education Revolution or in the area of health or critical infrastructure, this government has provided the finance and the tools and the sort of funding that we desperately need.

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