Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

Mr Deputy Speaker Vasta, I think it is the first time I have been before you as a member of the Speaker's panel, so congratulations on that elevation, while it was some time ago. I rise to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 and oppose it. This bill has some very nasty measures which, once the Australian people fully understand the implications of such measures, they will be, like the opposition, concerned about the enactment of this bill.

The bill seeks, at least ostensibly, to primarily repeal the minerals resource rent tax. We oppose the repeal of that tax and we do so on a number of grounds, which I will go to. But we also oppose this bill because of its position on a number of measures that have been helping ordinary working families in this country. For example, we are concerned that this bill will repeal the schoolkids bonus. The schoolkids bonus provides relief to families in a timely way in order for them to alleviate cost of living pressures when they need it most. They need it, sitting around the kitchen table, when school expenditure is being considered and how they are going to buy the kids some school shoes and how they might buy the books and uniforms. That schoolkids bonus has been well received and, indeed, has been provided to many, many families in this country. Now it is going to be taken away. It is going to be ripped away from families even though the basis upon which it is being taken away, as asserted by the government, is not true.

The minerals resource rent tax was not put in place to provide the revenue for such expenditure. The schoolkids bonus was not derived from that source and therefore it is entirely improper to suggest, as the government does, that we need to repeal that benefit to families because we are looking to repeal the minerals resource rent tax. We oppose the repeal of the minerals resource rent tax because we believe that a profit based tax on profits from the minerals sector, minerals which belong to the Australian people, is good reform and is the best way to tax that very important sector in our economy.

That is not to say that there have not been some concerns about the way it has been implemented. We concede that. But this is a far more efficient and reasonable approach to taxation in that sector than the royalties that are imposed by state governments, and we still hold that view. We also think it is in the interests of that sector that you pay the most tax when there are the highest profits and that that tax abates, indeed, recedes when there are fewer profits. That is good for the sector, good for the companies and good for our economy in general. We continue to support that approach.

The government cannot have it both ways. They like to say the tax has been so great that it is wreaking havoc on investment in the sector. At the same time, the Treasurer says, 'You haven't retrieved the tax you would say that you have and the tax receipts have been a paltry sum.' The fact is the tax will fall when profits fall and the tax will rise when profits rise. It is exactly the mechanism that we prefer because of, as I say, the way it responds to the needs of companies in that sector.

But let there been no mistake: this is not about the repeal of the Minerals Resource Rent Tax alone. This is about taking away from families the Schoolkids Bonus and removing from millions of Australians the tax concessions on their superannuation. That is what is happening if this bill were to be enacted. For example, this bill would ensure that there would be an increase in superannuation taxes on one in three of Australia's lowest paid workers, which would be devastating for those workers. Within weeks the government has sought to cut the super of millions of Australians earning up to $37,000 per annum whilst boosting the super for a mere 16,000 who have $2 million in superannuation balances. That is how stark the government decision has been in relation to super since they were elected. They have not been elected for longer than a few months and they are taking tax concessions from more than three million of the lowest paid superannuants and at the same time providing a bonus to 16,000 of the richest superannuants. That exemplifies this government's approach to looking after those who are at the higher end of income at the expense of the many who are on low incomes.

This bill sees the government scrapping the low-income superannuation contribution which sees the equivalent of superannuation tax up to $500 paid by a low-income earners up to $37,000 paid into the superannuation account of the taxpayer. The measure was important for a number of reasons. For high-income earners superannuation can be concessional; for low-income earners there are no effective incentives to contribute to their superannuation. This measure addressed that very issue. I might add that the removal of this contribution hits women particularly hard, with 2.1 million women affected by the removal of this concession. A significant percentage of these are mothers working part time while looking after young children. That is exactly the part of a woman's career where an additional $500 a year going into super will be of most benefit for building savings for their retirement and indeed for their family.

The other major concern about this bill's removal of the low-income superannuation concession is that it is an example of a retrospective tax measure, a fact confirmed by the Parliamentary Budget Officer's checking of the coalition's election costings. Low-income earners entered the 2013-14 financial year on the understanding that they would be refunded their superannuation tax. Part-way through this financial year the government has changed the rules on those taxpayers. Industry Super Australia estimates that, when combined with the proposed delay that has also been put forward by the government in increasing the superannuation guarantee to 12 per cent, the removal of the low-income superannuation concession will reduce national savings by $53 billion by 2021-22. This means a reduction in available capital for infrastructure investments by around $5 billion based on current industry-wide asset allocations. And this is at the time when the government is looking around for funding streams to finance new infrastructure projects. These are bad policy decisions which will have implications for this nation's savings. This will have implications for the capacity to find capital to invest in infrastructure and, as I said, it will have implications for millions of workers on lower incomes, particularly women who go in and out of the workforce when they are the primary carer of their children. These are some of the reasons that we cannot support the bill that is before the House.

The other concern I have as a former minister for small business is that this government's legislation will increase taxes on over two million small businesses and indeed close the loss carry-back scheme, taking away tax breaks for up to 110,000 businesses in this country. It should be no surprise that just a few weeks ago we saw a commission of audit outsourced to big business, the big business lobby group, chaired by Tony Shepherd. He may well be a reasonable man and have a particular perspective but he definitely represents big business. It should be no surprise that with no small business representation at all on that commission of audit we see a tax hit on millions of small businesses. Interestingly, the coalition's plans to remove these small business investment incentives has united big and small business in opposition, with both the Australian Industry Group and COSBOA speaking out against their removal.

As minister I was honoured and happy to be able to announce with the Treasurer at the time the introduction of the instant asset tax write-off, bringing forward the capacity for getting depreciation on assets purchased of up to $6,500 for each and every asset for small businesses, cutting red tape, removing the requirement of putting in these depreciation schedules year after year and being able to do it in the first 12 months, getting the windfall in one year rather than over four years. This is something that was welcomed by the small business community, the small business sector, by COSBOA, the peak body. I was very happy to be associated with that initiative. That will be taken away by the Treasurer and by Prime Minister Abbott by enacting this bill. Enacting this bill will see the end of that depreciation, those tax concessions and that cut to red tape that small business enjoyed because of that initiative introduced by the previous government.

Here we have a government which like to talk about small business, say they are the party of small business, say they are going to remove red tape and say that they are going to provide tax concessions to small business. What do they do with the first bill in this place on these matters? They remove the tax concessions for small business and they, indeed, increase the compliance on small business. In other words, they bring back red tape and remove the tax concessions available for millions of small businesses around this country. They should hang their heads in shame, because that is entirely contrary to what this Prime Minister said when he was making his comments on these matters before the election. He said one thing before the election; he has done another thing since the election. This is not the government that the Australian people thought they were getting when they voted on 7 September and this bill, more than anything else, has underlined that reality.

The bill also includes the abolition of the income support bonus, a tax-free payment, which came into effect earlier this year to help people prepare for unexpected living costs. If the proposed abolition is successful, then people aged over 50 who are on the Newstart allowance will lose the payment. The income support bonus provides $210 extra a year for single people and $350 extra a year for couples, to assist them in meeting unforeseen costs, such as medical expenses or car repairs. Some might say that $210 or $350 a year is not a lot of money. It may not be a lot of money to everybody. But this money is vital for those people currently in receipt of it, who need it when times are tough, when their income is constant but low and when they have some surprise bills in their letterbox and need to respond to them. That measure was there to provide relief. It will be removed by this heartless government, which is touching people's super by cutting millions of superannuants' tax concessions and, indeed, is now looking to remove this bonus.

We oppose this bill because we believe the minerals resource rent tax is the right approach to taxation. But, most fundamentally, we oppose this bill because it removes the schoolkids bonus, which will hurt families, it will remove concessions on superannuation and, indeed, it will attack all the concessions and allow the red tape that we removed for small businesses. It is a bad bill. It will not be supported by this opposition.

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