David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Hansard source

And that was very much a part of the package of measures that we have before us. But this is an important part of a broader package of reforms to build the infrastructure Australia needs to compete in the 21st century. The tax incentive will promote private investment by preserving the value of accumulated losses over time. Further support is provided by removing the restrictions imposed on the use of carry-forward losses, which can prevent losses being claimed if there is a change of ownership of a project. The tax incentive will encourage private investment in nationally significant infrastructure such as roads, rail and ports. It is a clear demonstration that this side of the House is committed to improving the nation's infrastructure, which is so important for the long-term growth of this country.

Schedules 3 and 4 ensure the appropriate regulation of all forms of tax advice whether they are provided by a tax agent, a BAS agent or an entity in the financial services industry. Contrary to the misleading claims of those opposite, the bill contains a three-year transitional period to allow financial advisers to comply with the regime. All of this rubbish about people being required to come into compliance with the regime in a matter of weeks is precisely that. This is similar to the transition period that this parliament provided to accountants who provide financial advice. These amendments are designed to ensure that all entities that give tax advice meet appropriate professional and ethical standards.

That is what they would do, of course, if the coalition were not determined to block them as they are. The member for Lyne made the point very clearly that somebody has to come into this place and stand up for the protection of consumers. It is one thing, as one of the members opposite said, to talk about the financial planners in her electorate, and I am sure they are wonderful people doing a good job, but it is our responsibility to protect the consumers—the broader population—from the professional activities of those within the financial-planning sector who are engaged in providing advice that is of a taxation nature. These amendments would give consumers the confidence they need and they deserve. The government thinks that Australians who use financial advisers should feel secure knowing that the adviser meets appropriate professional and ethical standards. I think it seems hard to object to that.

The shadow Treasurer claimed that there has been no consultation. The truth is that there has been extensive consultation. If we have a look at what has been occurring, we can see that on 29 November 2010—that is right; back in 2010—the government consulted with the public on a discussion paper titled Regulation of tax agent services provided by financial planners. Then, throughout 2011 and 2012, the former Assistant Treasurer, my predecessor, held roundtable consultation with Treasury and with stakeholders. Furthermore, there was public and targeted consultation on the draft legislation. If the opposition are hiding behind claims of process to avoid the truth—that they are not willing to stand up for consumers—let me, in detailing that consultation, remove that fig leaf.

The government are committed to these reforms, and we will continue to advocate for the rights of consumers. If three rounds of consultation are not enough for the shadow Treasurer then we will allow parliament more time to scrutinise these amendments and ask that the coalition join with us in supporting these important consumer protection measures.

Schedule 5 provides important opportunities for the public to scrutinise the performance of Australia's business tax system and the contributions made by large and multinational businesses. Like the member for Lyne, I am surprised to see that the opposition is proposing to oppose this. There is growing concern not just here in Australia but right around the world that many of the key rules of international taxation have not kept pace with the evolution of the global economy. The apparent ease with which some large corporate entities can shift taxable profits and erode a country's tax base is a shared concern for this government, for the G20 and for, in fact, most OECD countries. I am surprised that it is not a concern of those opposite. Policymakers and the Australian public should have more transparency around the levels of tax being paid by large and multinational businesses in Australia to allow for an informed debate about the efficiency and equity of our tax system. By increasing the transparency of our business tax system the government will ensure that the public is well informed about the contributions made by large corporations. The amendments will also ensure that the government can be advised on and publish period aggregate tax collection information even where there may be few corporate entities paying a particular tax. In addition, schedule 5 facilitates increased information sharing between government agencies.

I pick up on the point that the member for Lyne made. We believe that the privacy of individuals in relation to their tax affairs should remain sacrosanct, and nothing in this schedule will alter that. But I make this central point: as we engage in a debate around base erosion and profit shifting, I hear plenty of stakeholders—in fact, some opposite—come forward and say, 'Show us the evidence that the corporate tax base is being eroded; show us the evidence that there is profit shifting.' In fact, these are the arguments that I have heard from those opposite when they have come into this place consistently to oppose measures that we have introduced to crack down on corporate tax loopholes—over $10 billion worth of measures in revenue protection that have been voted against by those opposite. Every single time, they come into this place and they say, 'Show us the evidence that big multinationals are not paying their fair share of tax.' We say, 'Okay, we need to amend the law so that you can see all of that evidence,' and they come in here and say they are opposed to it. What are you hiding? Why is it that you are so determined to hide the tax position of so many of these companies? It is outrageous. The net effect is that, if we do not crack down on these loopholes, individuals and small businesses—average, hardworking Australians out there—have to end up paying a higher burden of tax to pick up the slack when some of the most profitable companies in the world are not paying their fair share. You should be ashamed of yourselves.

Schedule 6 addresses issues arising from the full Federal Court decision in Esso Australia Resources Pty Ltd v Commissioner of Taxation in 2012. Without amendment, there would be significant financial implications for industry, with many taxpayers being unable to deduct legitimate project expenditures in determining the PRRT liability for their petroleum projects. The government recognises that such an outcome would be inconsistent with the policy intent underpinning the PRRT regime and the way it has been administered since its commencement in 1987. The amendments maintain the policy intent of the PRRT as a profits based tax and are broadly consistent with the ATO's longstanding application of the PRRT law in relation to the treatment of deductible expenditure. At the same time, they preserve the substance of the court's decision that a taxpayer cannot derive a tax advantage via contract arrangements with related parties.

Schedule 7 exempts from income tax payments made to individuals under the Defence Abuse Reparations Scheme. The establishment of the scheme forms part of the government's response to the DLA Piper report of the review into allegations of sexual or other forms of abuse in Defence. The payments made under the scheme are in recognition of the fact that abuse in Defence is unacceptable and wrong. Exempting these payments from tax will ensure that recipients receive the full benefit of the payment. Exempting the reparation payment from the income tax will also prevent it having an impact on people's social security payments, such as parental leave, family assistance and child support payments.

Schedule 8 implements the government's announcement of 8 May 2012 to remove the 50 per cent discount on capital gains accrued after that date for foreign individuals. Foreign and temporary resident individuals will still be entitled to the 50 per cent discount on eligible capital gains accrued prior to 8 May 2012 after offsetting any capital losses, provided they choose to value the asset as at that day.

Schedule 9 amends the GST law to establish the framework for providing that certain services and support provided to National Disability Insurance Scheme participants will be GST free when they are provided for in a National Disability Insurance Scheme plan. This will ensure greater certainty for National Disability Insurance Scheme participants and providers that supply services to those participants. These amendments will apply in relation to supplies made on or after the commencement of section 37 of the National Disability Insurance Scheme Act 2013. However, this is subject to state and territory agreement to the making of the necessary determination.

Schedule 10 amends the deductible gift recipient provisions of the Income Tax Assessment Act 1997. Taxpayers can claim an income tax deduction for gifts to organisations that are DGRs. Schedule 10 adds five new organisations to the act: namely, the Aurora Education Foundation Ltd, United Way Australia, the Australian Neighbourhood Houses and Centres Association Inc., the Australia Foundation in support of Human Rights Watch Ltd, and the Layne Beachley Aim for the Stars Foundation Ltd. The government will also move an amendment to add an additional organisation to the act: namely, Social Traders Ltd. Making these organisations deductible gift recipients will assist them to attract public support for their activities. Schedule 10 also extends the listings of two organisations in the act: the DGR listings for the Roberta Sykes Indigenous Education Foundation and the Charlie Perkins Scholarship Trust have been extended indefinitely. Extending the DGR listings for these organisations will assist them in continuing to attract public support for their activities.

Finally, schedule 11 makes several miscellaneous amendments to the taxation and superannuation laws. These amendments are part of the government's commitment to the care and maintenance of the taxation and superannuation systems. I commend this bill to the House.

Question agreed to.

Bill read a second time.

Message from the Administrator recommending proposed appropriation announced.

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