Robert Oakeshott (Lyne, Independent) Share this | Hansard source

I note that several of the speeches made on this bill, the Tax Laws Amendment (2013 Measures No. 2) Bill 2013, seem to be trying to build an element of division around the entire bill, when the truth is that most schedules in this bill have bipartisan support—and that is welcomed. Of the 11 schedules that are in this omnibus tax amendment bill, I understand that there are three that are in disputes—schedules 3, 4 and 5.

Dealing with those issues first, I think we are fundamentally talking about bringing financial planners under the Tax Agents Services Act, which are the schedule 3 provisions, backed up by some technical amendments in schedule 4, and then schedule 5, making the tax paid by large corporations more transparent. I am very surprised with that being at all controversial.

In fact, I will deal with schedule 5 first. This is a key part of the business integrity package as announced in the federal budget. I have a lot of time for the new tax commissioner, Chris Jordan, in particular, who I understand has done a lot of work with the business tax working group following on from the tax summit in 2011. Now in his new role he is implementing with government and with the Assistant Treasurer a business integrity package that I think deserves the support of this chamber.

There are reports from jurisdictions all round the world on this issue that Australia needs to start getting its head around and we need to participate in, in a cross-jurisdictional way, looking at how multinational companies are gaming sovereign tax laws to their own benefit and to the detriment of the communities they are doing business in. That is a noble starting point, that we start to address these issues in a substantive and coordinated way both within Australia and across jurisdictions. The key opposition to this, as far as I can work out, is that there is some belief that government is overreaching. On the contrary, I hope this is just the start of trying to address these issues, which are real and which have the potential to significantly erode the integrity of the tax base in Australia.

These laws do not impact the privacy of one single individual in Australia, even the wealthiest individuals. As far as I understand—and the minister may like to correct me—not one single individual, poor or rich, is impacted in regard to their own privacy. The legislation is starting to try and address, as far as I understand, the issues of large companies with significant turnovers and, I think quite rightly, people wanting to know what tax is paid by the very large corporations in Australia, most of them already reporting this information in their annual returns to their shareholders. In my judgement as a representative in this chamber, I do not view this as a layer of red tape or a further impost. This is allowing Chris Jordan and the ATO to do their job on behalf of all Australians and protect the integrity of our tax base and make sure we are not being gamed. This means that individuals may have to pay more tax, if we are being gamed by the top end of town who are happily doing business and selling products in our market yet not paying a fair and equivalent share of their contribution to the tax base.

I have no problem whatsoever with schedule 5. In fact—and this is a message to both sides of this chamber—I sincerely hope this is just the start of the journey of Australia dealing with issues around the integrity of our tax base and cross-jurisdictional tax issues. There are plenty of examples both within Australia and around the world of well-known multinationals, in particular, gaming those sovereign tax laws at the expense of countries, including ours. I welcome schedule 5.

In relation to schedules 3 and 4, I am really disappointed that they are being omitted. I accept the arguments, and I hope it is only for a short time. It is now four months until an election, so this is a message to both sides: I hope this is not some sort of win for my old mate John Brogden and financial planners or for Mark Rendall. I hope this is not just a cave-in to some pressure from the financial-planning industry and that it is being omitted with the noble intent of buying some time to do some further consultation. But the principles behind schedules 3 and 4 and the importance of consumer protection very much stay on the agenda.

I have heard all the arguments for and against from financial planners, accountants, tax agents, experts in the law and many, many others. Where real concerns have been raised, I have done what I could to get answers. Initially there was a legitimate argument about lack of consultation. The exemption for financial planners under the Tax Agent Services Act was a time limited extension that had expired in 2012. It was extended and it had always been the expectation that financial planners would be governed by this regime. There is still time for consultation on the regulations that will come beneath the act relating specifically to education and experience to achieve registration for financial planners. After having done a bit of homework, I think the lack of consultation question is relatively shallow. I hope once again that this is not a cave-in to some political pressure. Initially I thought there was a fair argument around unreasonably stopping financial planners undertaking their role, but the response has been that there is a three-year transitional period during which planners will only be required to register with the board. I am told the regulations are well underway and there will be plenty of time for educational requirements to be satisfied before the transitional period ends.

The other issue that I thought was legitimate, one I pursued with ministers involved, was that there was an inconsistency between these tax reforms and the very good FoFA reforms that have gone through this parliament as part of a broad reform agenda of this 43rd Parliament. I thought there was some legitimacy in the argument that these laws need to be talking to the FoFA laws and vice versa. That was of concern to the point where I was not going to support schedules 3 and 4 until there was some clear direction on that. I got that clear direction. I got a letter from Minister Bill Shorten, which I am happy to release after this. In the letter he said that the reform of the tax agent services regime does very clearly talk to the FoFA reforms and they work in parallel. Likewise, I received a similar letter from the minister at the table to the effect that creating a co-regulatory framework for tax advice services is actually the point of the exercise—getting the FoFA reforms to talk to tax reform is the narrative; it is the point. That we are now dropping that because of some political pressure is a step backwards. So I received both of those letters.

Importantly, though, I received a letter from ASIC, the Australian Securities and Investments Commission, that has said that ASIC is confident that the Corporations Act and TASA are consistent and that a financial adviser can comply with both. That is a relatively long letter that also provides comfort. And my good friends at the Tax Institute I think put it best of all—and the Tax Institute are hardly a friend of government. Arguably, they are the country's leading professional association in tax, with 13,000 members, including tax agents, accountants and lawyers. Fundamentally, they support the tax profession to work to continually improve tax law and administration. They are very passionate about schedule 3 and say that it is an important consumer protection measure in tax law. I think they will be bitterly disappointed that because of the lack of numbers in this chamber the government has had to omit schedule 3 at the expense of consumer protection in Australia today. I will also release that letter.

The Institute of Chartered Accountants in Australia have also passionately argued that the accounting profession supports schedule 3. They said, 'This has been in gestation for some 20 years, with concerted discussion and drafting of this particular element of the Tax Agent Services Act 2009 arrangements over the last three years.' But from the shadow Treasurer through, on one side of this House, we have heard that this has all been a mad rush by a disorganised government and that the sky is falling. Twenty years in gestation, in writing from the Institute of Chartered Accountants in Australia—a good friend, I would have thought, of the Liberal-National Party.

So what has gone on? The Institute of Chartered Accountants, the Tax Institute, ASIC and both ministers have providers letters of comfort to say that schedule 3 talks to the financial services reforms of the last couple of years. They say it is a really important reform for consumer protection in Australia, so who has folded? And why? I hope that the vote actually records who has folded and why.

I am a good friend of John Brogden; I will put that on the record. But I would hope that a lobbying campaign from John Brogden and Mark Rendall is not at the heart of vested interests getting in front of consumer protection and important law reform that has been in gestation for 20 years according to the Institute of Chartered Accountants. Why would our chamber get in the way of improving consumer protection, particularly in the last five years, when every community—mine as well as everyone else's in this chamber—has had superannuants and retirees have their money diddled by people who are working in this field, where there is $1 trillion of superannuation money. The Cooper review has stated that there are immature rules around that trillion dollars. We need to improve the regulatory framework with some urgency, yet some people in this chamber have folded their tent behind a bit of political pressure, a bit of lobbying and a bit of positioning for the next four months.

I think that consumers, who are voters, have a right to be angry. Their money remains exposed, with immature rules around some really critical reforms for our country that get the FoFA reforms talking to our tax laws, as clearly identified in letters of comfort from ASIC, from the Tax Institute, from the Institute of Chartered Accountants and from both ministers. I think it is really disappointing that the numbers are not in, and that we have had to omit schedules 3 and 4. I know there are financial planners who will run around and pop the champagne, but consumers should not. Retirees should not; retirees have had a loss today. Their money is still exposed by a regulatory regime that still needs further work.

As a chamber, I would hope that we are not bailing out for good. I hope that, as a compromise, this is just buying a window of time. I would encourage the minister to answer that. I would hope this gets revisited with some urgency, because the point of the exercise is in schedule 3 and 4, and that is to get FoFA talking to our tax laws and vice versa. We have bailed out today. It is disappointing. Consumers have had a loss, and I hope we can revisit it sometime soon.

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