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

I rise to support the contribution of the member for North Sydney, the opposition's shadow Treasurer. He has very eloquently outlined the key issues at play here with the various schedules of this omnibus tax laws amendment bill. I will start with the last one first. The shadow Treasurer has quite rightly identified that there is some virtue to this amendment, and the good thing about it is that it will apply prospectively, so there will not be some middle-of-the-night change to tax laws with retrospective application that may expose particular taxpayers to a liability they never anticipated, certainly never factored in and for which there has certainly been no legal obligation to pay.

The amendment touches on a couple of areas such as the off-road use of LPG—for those who are listening, these are things such as forklifts that operate in factories and the like which quite rightly are getting the consideration of a non-transport use of LPG—and also as it relates to compressed natural gas. It might come as a surprise to you, Madam Deputy Speaker, but in Aspendale Gardens in the great state of Victoria, probably about a year and half ago, there was an opening of the first publicly available CNG filling station. For those with an interest in transition fuels that are more environmentally friendly, I am a big fan of CNG and, as the parliament knows, I have been a long-time, big advocate of LPG. Here was a compressed natural gas filling facility not of the kind ordinarily operating in Australia where fleet vehicles may have had access to it.

In fact, not far from your electorate, Madam Deputy Speaker Vamvakinou, the Melbourne city council received a grant from the previous Howard government to have a CNG filling station in its depot to support the garbage collection fleet where there were dedicated CNG vehicles operating in the city of Melbourne, coming back to base and being filled with CNG. That has been the normal course of events and a number of light commercial and heavy commercial vehicle manufacturers offer compressed natural gas systems for their vehicles. What was new in this case was that this was a publicly available CNG filling station, reflecting that a number of suppliers, including Mercedes Benz and others, now have light commercials that can be operated on CNG that needed somewhere to fill up.

On that occasion—and it was a very nice occasion; I think the member for Isaacs was there as well—the proprietors of that public CNG filling station showed me a home CNG compression unit. This would allow you, I or anybody else to purchase technology that would draw gas from the gas mains and to have it compressed and injected into a vehicle so that you could actually fill up your car at home. One of the issues that did cross my mind at that point was just how excise would operate when people were drawing gas from the household main system that would be firing up their hot water services and keeping them all toasty warm on a cold Melbourne night. They would also tap into that supply to fuel their vehicles. This bill deals with that and gives some encouragement to those who would invest in that domestic CNG filling capability that they will not be subject to excise. That is another reason why the coalition is supportive of schedule 4.

The other area we are very interested in and supportive of the government's actions on relates to the discretion the tax commissioner would gain related to certain trust structures where a change in the composition of the trust would trigger certain taxable events, such as a new trust member or one leaving the trust. As the shadow Treasurer indicated, an untimely death might trigger capital gains tax liabilities and the like. We think that the opportunity for the tax commissioner to exercise a discretion as it relates to those taxable events is a very good idea. I am personally aware of some circumstances where an untimely death has created an enormous tax liability that none of the family members had anticipated and that only compounded their personal grief.

There was no great public policy or tax policy justification for triggering that liability but it was one that they were faced with that added to the hardship of the loss of a loved family member. Those family farm enterprises felt unforeseen and very harsh consequences from a strict interpretation of the law. The opposition actually highlighted that this was a shortcoming of the taxation law and administration and proposed a change of this nature, and I am pleased that the Assistant Treasurer, not only having chosen well with his wife, a lovely person who I was pleased to meet the other day, has also chosen well in picking up this opposition suggestion. I commend him for doing that.

It does highlight, though, a policy initiative that the coalition has proposed—that is, the need to appoint a small business and family enterprise family ombudsman for a range of reasons: in dispute mediation and for a proper strong voice to be heard within the halls of power, something that you could never suggest happens at the moment with the current government; they seem to have this horrible disposition of hostility and combativeness towards small business and family enterprises.

Mr Shorten interjecting—

The Assistant Treasurer is illustrating the point quite well at the moment of just how hostile the government's attitude is to small business and family enterprises. Here is an example of where the coalition had led the way, has shone the light on a problem with government administration that dealt with small business and family enterprises. Something has been done about it.

As to other problems, Madam Deputy Speaker, I am sure you are highly alert to some of the communication responsibilities, where a broadcaster, a family trust or others might hold a radio broadcasting licence and the untimely death of one of the family members would be a trigger event to impose new local news content. Do you remember when we had that sort of 'vanillarisation' of radio services down the east coast and there was some concern about a loss of local content and news services being beamed in from places afar into local regional markets? There was a trigger event that if a radio licence was sold then the new owners would have certain obligations on them for local news collection, local content and the like.

Sadly, one of those trigger events was like what we are describing here, where if the their licence was owned by a family trust and one of the members passed away it was treated as if it were a sale. So, compounding the grief of a loved one being lost to the family that owned that radio licence, they then had to restructure their radio station purely because a family member had passed away. It was not because of the sale but just because of the change in the composition—again, highlighting why the coalition's excellent policy to appoint a small business and family enterprise ombudsman would have alerted people to the family enterprise context of that policy.

We think that is a good thing, and perhaps the government will also follow the lead of the coalition and embrace yet another good idea that has come out of the small business portfolio, dare I suggest, Assistant Treasurer. The Department of Prime Minister and Cabinet actually said that the coalition's small business policy would promote and support small business and encourage entrepreneurship, and they gave it a big tick. My encouragement to the government was, 'We know that you do not have a great feel for small business and family enterprise so just copy the coalition's policy.' That has happened before and it is happening here. I hope, in the interests of small business, it happens again, because they really need someone on their side. They cannot look to government benches for that kind of support. So we are happy to keep providing some insights on what can happen.

On the two provisions of the bill that are quite contentious, the shadow Treasurer outlined a quite remarkable effort to retrospectively change the nature of the tax law as it related to Bass Strait petroleum, even though it is currently the subject of court proceedings. Taxpayers, who are disputing the tax commissioner's interpretation, have been paying their asserted tax liability that the tax commissioner has put forward whilst they contest the interpretation of the tax laws. The shadow Treasurer quite rightly points out the difficulty that taxpayers face when they have a dispute with the tax commissioner. They are expected, particularly for small businesses, to pay the liability that has been calculated and deemed to apply and then they may contest it. If you do not, you show great courage because interest compounds on that tax liability. It is almost a no-brainer that you should pay first and then contest later. Somehow, some interpret that as an admission that the tax law has been appropriately administered.

This is another example where the tax office's assessment of tax liability has been hotly contested for two decades. This is no way resolving it by coming in at the 11th hour on well-advanced court proceedings to try and reframe the law and then apply it retrospectively. There is no virtue in that whatsoever. It runs against all the grains of good public policy and good legislative formulation. I can understand why the Assistant Treasurer is hanging his head. It is not his finest moment when he is trying to retrospectively change the way the law is operating. He should let this thing run its course, and I commend to him the coalition's position in that regard.

The last point that we should talk about relates to the reach of a director's liability. I must say, at the urging of the Assistant Treasurer, I will praise him for seeing the wisdom in withdrawing the schedule. What was said to have been an effort to crack down on phoenix structures actually has much broader reach. Directors, with no suggestion that the companies they are involved with have been involved with phoenix liabilities, may be subject to these provisions. If directors, who are exercising all of their responsibilities quite appropriately, find that somewhere within the organisation something had not been done right with the PAYG or the superannuation contributions, they would personally would be liable. There is no effort required to substantiate the phoenix-like status of the company and that being the motive for that action. There is no legal obligation to prove that the directors had somehow not been properly discharging their obligations or knowingly conspired to see an inappropriate PAYG or superannuation payment arrangement. There is nothing like that whatsoever in schedule 3, which was poorly drafted. The House Economics Committee identified that many of the submissions to the inquiry into this bill reiterated that point. I think it is wise and sensible that the government has chosen to withdraw schedule 3.

It does point to yet another opportunity that the government has to embrace a coalition policy. Madam Deputy Speaker Vamvakinou, you would be aware that the government has promised much from an arrangement where employers, if they choose, could make superannuation contribution payments to Medicare. Medicare would then oversee the distribution of those payments to the particular funds that their employees were members of. That has been spectacularly unsuccessful because the idea has been so poorly executed. It has been spectacularly unsuccessful because most businesses do not wake up in the morning thinking that they need to have a relationship with Medicare. Yet that is the presumption that sits behind the government's policy formulation.

The coalition on the other hand has been advocating that that role be through the Australian Taxation Office where you could combine the PAYG contributions and the superannuation guarantee responsibilities into a single payment to the tax office. Then the tax office could make that distribution. That makes sense because it is the tax office that is charged to enforce their recovery, not Medicare. Medicare under the government's arrangements would receive this payment and do the transactional gymnastics to take that payment and spread it out across the funds. If those payments were not right or they were not coming in in a timely way, there would be nothing they could do about it. Compounding the problem is that most businesses do not have any kind of relationship with Medicare and would not even think to contact them for some service of the kind that is being considered in superannuation clearing terms. If there were something not quite right, Medicare could not do anything about it anyway.

The government should embrace the coalition's proposition of having these payments handled through the tax office. You would then have all the right mechanisms connected and the relationships that business understands working to the advantage, not only of the business in reducing their transaction costs in making superannuation payments, but also in the event the business was not upholding their responsibilities for those payments. The tax office would be the Johnny or the Jeanette on the spot seeing that those payments were not coming in and would have all the tools necessary to ensure that those payments were made in a timely way. That is a far more sensible way to go than what was originally envisaged in schedule 3, which sought to impose some new liability on directors. Notwithstanding that those directors did not have any involvement, knowledge of, or had failed in some way to carry out their responsibilities, they were somehow going to be personally liable.

It is another example of a good coalition policy. The only criticism that has come from the government is that it would be too successful. Too many businesses would be involved and somehow that would put added demands on that process. It has been a long time since I have heard a criticism of a policy being at risk of being too successful and too effective in achieving its objectives. That is another area where I think the government could embrace the coalition's position in recognising the Assistant Treasurer's decision to withdraw schedule 3.

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