Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Hansard source

I have not ranged widely. What I am saying is this adds to—

Government members interjecting—

They can all laugh on the other side. This is just politics to them. This is simple and pure politics. It has nothing to do with our reputation as investors. So keep laughing! It is the way in which they deal with the serious issues in this country. This issue of the doubling of the withholding tax adds to this litany of sovereign risk issues which I have been seeking to draw attention to. Greg Hyland, the Shanghai based Regional Director for Asia Pacific Capital Markets with Jones Lang LaSalle, said recently:

People like investing in Australia because it has certainty, and when that environment changes people sit back and reassess the situation.

Obviously, when you double taxes, it's not attractive for investors. It undermines Australia as a safe haven to invest.

This sovereign risk in Australia has been monumentally enhanced by this government, and all for $260 million. Those opposite are going to sacrifice billions of dollars of investment for the sake of trying to meet a target surplus which they will never meet. They know that. They are not going to get there but, in order to try to demonstrate, that they will go to any lengths and sacrifice the integrity of our reputation as a safe investment haven.

This is so perplexing, and it totally contradicts budget night 2008. On that budget night former Assistant Treasurer Chris Bowen, the member for McMahon, announced a progressive reduction in the withholding tax from 30 per cent to its current rate of 7.5 per cent. It is a matter which was widely regarded and supported. It was part of Labor's plan to develop Australia as a financial hub for Asia and the Pacific:

The government had acted to 'dramatically improve the competitiveness of the Australian managed funds industry', Bowen said.

The move, he added, would provide a 'significant boost to Australia's ability to compete globally' and would support the aim of growing assets under our management from the current $1.7 trillion to $2.5 trillion by 2015.

How things have changed in just four short years! Now we have a situation in which the sound principles and objectives that the then minister espoused have evaporated with this bill. More so, the Assistant Treasurer has the gall to attack us for defending Labor's original policy of 7.5 per cent. He is there attacking us for defending Labor's policy, which was widely heralded and widely admired and which has promoted significant investment in this country.

There is a requirement for MITs to have an in-country office. Several major retirement funds are in the process of developing those offices, and what do we do in the middle of it? Just as people become comfortable and encouraged by this provision the government pulls the rug out. Not only that, but it does not even grandfather the provision so that they are now stuck with investments that have been made at 7½ per cent which may well not have stacked up at 15 per cent. These are multimillion-dollar and in some cases billion-dollar investments.

The Assistant Treasurer claims that we have used flawed modelling from the Allen Consulting Group. Give me a break! Talk about flawed modelling. This government would have to have the worst record of any government for unreliable forecasts. The UBS forecasts miners will pay $4.78 billion over the next four years against Treasury's estimate of $13.4 billion. Look at the budget forecast—it went from $12 billion to $44 billion after making several jumps along the way over 18 months. How can people reliably assess or make investment decisions—or any decisions, for that matter—with the record this government has?

This government will stoop to any level to distract and to play politics. This is an act of base politics. Clearly, they have done a deal with the Greens. Something will come up in the Senate, and we will have more confusion. This bill will be amended again in the Senate—you can see it coming. The Assistant Treasurer will stand up and defend the bills, knowing full well that they have done some deal with the Greens. It will confuse the investment market once again, and who knows what strings are attached? Who knows what other pieces of legislation will come into this place that we know nothing about and which are part of this grubby deal that the Assistant Treasurer is going to seek to put through with the Greens in the other place?

This government is a walking sovereign risk. This bill is part of that. The legislation should stay as it was. (Time expired)

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