Scott Buchholz (Wright, Liberal Party) Share this | Hansard source

It is always a pleasure to follow the shadow Treasurer. I know firsthand that he has enormous small business experience and understanding and so comes to this House with a different set of skills that assist our nation in making tax law amendment decisions. As the shadow Treasurer pointed out, this is a poorly thought-out bill which defies most of the standing orders and procedures of this House. But, unsurprisingly, as I stand to speak on the Tax Laws Amendment (2013 Measures No. 2) Bill 2013, it is consistent with a lot of other bills that come into this House.

There are three commonalities to bills that come before this House from Labor. The first is that they normally give more power to a union mate. Second, somehow in there there is an increase in the Public Service. Third, there is an increased tax. That is what this one is. It comprises the largest number of taxation amendments in this term and contains 11 schedules. The coalition will move an amendment to this bill to excise schedules 3, 4 and 5, given the government denied the opportunity for this bill to be properly scrutinised before coming to the House.

I will explain for the benefit of Hansard and for the nation how the normal line of scrutiny would be applied. Deputy Speaker Georganas, let me start with a bit of history that I am sure you will find informative but not surprising. The coalition is deeply unhappy with the handling of this bill. When the bill was introduced the coalition sought to have the bill referred to the Parliamentary Joint Committee on Corporations and Financial Services. The House Economics Committee used its numbers to have the debate shut down. What happens is that such a bill, by definition, is referred to the Economics Committee, which then becomes the front door. It is the Economics Committee's role to look for public scrutiny. The Economics Committee would then go to the market, to the stakeholders and those that the bill would have implications for, and they would call a public inquiry. They would call stockbrokers, mortgage brokers—any interested party that would have a linkage and where this bill would affect their business. They would call them to a room. They would allow those stakeholders to give evidence, to ask questions of Treasury and to put their side of the story so that the bill could be properly scrutinised. It did not happen.

They shut that part of the procedure down by using their numbers in the Economics Committee so that this bill could not be debated and scrutinised. It is a single taxation bill with 11 amendments, which is unprecedented, but with no consultation with industry. If I am an Australian I am starting to get suspicious. Why would a government do that, especially a government that advocated earlier in its turn that we needed to open the window and let the sunlight in—that we needed to have transparency in this parliament?

But this is not an isolated case. When it comes to trying to hide the facts, we saw it only a couple of days go with the Education Bill. It was Labor's cornerstone policy, one of the jewels in the crown, but a measly 1,400-word document on nine pages was brought into the House. There were 71 amendments and then the debate was shut down. There is a pattern emerging between this bill, where they are trying to shut down scrutiny, and what we are seeing happening on a regular basis. It is happening on a regular basis because we are seeing the wake of a desperate government. These are the side effects and we are a poorer nation for it.

On Friday, 31 May 2013, the Labor majority of the House Economics Committee refused to hold an inquiry. That was a sad day. So we are now in the position of having the government asking the parliament to pass a bill with significant changes to the law within a week of its introduction to the parliament with no committee oversight. I said before that the bill currently before the House contains 11 complex schedules. Schedules 3, 4 and 5 in the bill particularly deserve scrutiny.

Schedule 1 speaks to monthly PAYG instalments. It deals with the 2012 MYEFO budget measure that sought to bring forward more than $8 billion worth of company tax revenue by requiring companies to pay income tax by instalments monthly rather than quarterly. The main driver and sole purpose of this measure seemed to be shoring up the future promise of a budget surplus. I need not take you too far back to when on over 300 occasions—some advocate 300, some advocate that in aggregate it was 500—claims were made that this government would return our nation to a surplus. When you hear that a government is going to return our nation to surplus you would think that they would be going to do it by stimulating economic activity in the market. You would think they would do it by increasing the pie. You know how these guys were looking to get to a surplus, Deputy Speaker? They were looking to do it by accounting trickery—by not actually increasing the pie but by simply taking the revenue that would have been generated in a quarter, breaking it down into months, and using it through an accounting procedure in the quarter before the budget to make the revenue numbers in Q2 look stronger.

And do you know who pays? It is the business sector that pays as a result of cash-flow limitations. They would normally have had their overdrafts and their cash flow through their business scheduled for quarterly payments of the PAYG. But, no, some genius decided that if they applied this accounting trickery they would be able to move towards their surplus. It used to be that the only businesses that would have to pay the quarterly instalment were businesses that generated over $1 billion worth of turnover. That did not seem to be generating too much coin and they thought that there was an opportunity for more tax to be raised if they dropped the amount to $100 million. Not happy with $100 million, it was then dropped down to $20 million. The reason I draw your attention to those numbers is that I want to show you how it is trending. It was from $1 billion to $100 million to $20 million. I will tell you where it stops: it stops next at mum and dad, or anyone—they will not stop until they have got it all.

The aim of the original MYEFO measure was to deliver a surplus, but that then ended up as a deficit. This move netted the government $1.4 billion over the estimates. If you remember, $1.4 billion was roughly what the surplus was going to be. That is what they were forecasting—about a $1.3 billion surplus. It came in at—what?—a $19.4 billion deficit. So it was nearly $20 billion out. But that was consistent, because they are normally about $20 billion out with their forecasts. In total, the measures within this bill bring forward more than $10 billion worth of taxation receipts and bolster the government's budget bottom line over the forward estimates. It is accounting trickery. As I say, nothing in this measure increases the pie. It does nothing to give business confidence.

The Treasurer comes into this House on a regular basis to say what strength our economy is in. The other day we had the Reserve Bank hand down its findings on the cash rate, which is staying where it was. An analysts' perception from Macquarie, which is on the public record, states:

They made a case for cutting rates further—and this is in an environment where this bill attacks the cash flow of businesses. They stated:

And the best thing this government can come up with is to say: 'Let's tax you more. Let's take your quarterly commitment away and go after you monthly.' That is the government's answer to recent comments from Macquarie Bank.

The alarm bells are ringing about the state of the competitiveness of our economy and the alarm bells are ringing in every business in my electorate of Wright as the debt and the deficit are reaching unprecedented levels. We have a budget emergency. The emergency started back in 2008. We had money in the bank when we were in government. In 2008 this government said we needed to increase our master card debt ceiling to $75 billion because that was what we needed to get us through the GFC. Yes, there is some economic rationalism on that stimulus government spend. Nothing is wrong with that $75 billion. That was their first forecast. A couple of years later they were back wanting to increase that master card limit to $200 billion. There is a vast difference between $75 billion and $200 billion. But that was not enough. Back in 2012 they were looking to increase the debt cap to $250 billion and not too long after they got to $300 billion. When you look at the expenditure in the forward estimates, from there on it will not be long before we are looking down the barrel at $400 billion.

The member for North Sydney, the previous speaker, raised the point that this government knows quite well that it is going to be somebody else's job to pay down that debt. Because guess what? We cannot pay this debt off in one generation. They say it is not a lot of money, but in the Howard era we would have had to have 18 of the biggest surpluses in a row to clear out the debt. So we are looking at a minimum of a couple of generations of working lives, when people are able to contribute taxes, and that is if we do not put on more debt.

Schedule 2 of the bill relates to incentives for designated infrastructure projects. This bill makes various amendments to taxation laws and the Infrastructure Australia Act 2008 to introduce a tax loss incentive for infrastructure projects designated by the infrastructure coordinator. The government claims that this measure will encourage private sector investment in nationally significant infrastructure such as roads, rail and ports.

The coalition have reservations about this schedule due to the discretion given to the infrastructure coordinator in approving tax concessions for individual projects. However, we will not oppose this measure, because we are going to have our own internal hurdles as a nation on how infrastructure projects are going to be funded in the future. The coalition have a plan on how we will fund those in partnership with the market combined with tax incentives. We will be keeping the implementation of this policy under watch, however.

Schedule 3 creates a regulatory framework for financial advice services and schedule 4 contains other amendments to the Tax Agent Services Act. These parts of the bill are unduly cruel. Schedules 3 and 4 of this bill deal with the Tax Agent Services Act 2009. It is another attack on small business. My office has received many emails from tax agents in my electorate sharing concern over this proposal. This is a bad tax. This one is the shocker. If we are going to get an amendment up, this has to come out.

It is unduly unjust. At two minutes before midnight, with no public scrutiny we will be implementing at the busiest time of the year for our tax agents another layer of regulatory burden. One can only assume from a cynical perspective that the intention of the tax office and this government is to trap small business so it can be seen as another source of revenue from implementing fines or to run people out of business. There is no sense. I do not believe for one minute that that is their intention. I believe this was an oversight, so I call on the government to let the sun shine in on this part of the bill, to let the sun shine in on these amendments. These are cruel. The rollout of this needs to be delayed from 2013 through to 2014 so more consideration can be given. There are too many unknowns around schedules 3 and 4. You have 100 days of government left. In that last 100 days do one thing right: fix this.

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