Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

I want to thank those members who have contributed to this debate. The Tax Laws Amendment (Implementation of the FATCA Agreement) Bill 2014 gives effect to Australia's obligations under the treaty status Agreement between the Government of Australia and the Government of the United States of America to Improve International Tax Compliance and to Implement FATCA.

The bill will require Australian financial institutions to collect and provide certain financial account information as specified in the agreement annually to the Australian Taxation Office which, in turn, will provide it to the United States Internal Revenue Service. This will enable Australian financial institutions to comply with the United States Foreign Account Tax Compliance Act in the most cost-effective way possible. In particular, I draw the attention of the House to page 34 of the explanatory memorandum, which details the compliance cost saving this bill will bring about—a saving of more than $583 million over 10 years. The bill will also help to enhance the tax system integrity by providing for improved cooperation between Australia and the United States for the purpose of preventing tax evasion.

I note the amendment that has been moved by the shadow assistant Treasurer, and also take this opportunity to highlight that the government will not support the opposition's amendment. And I note that while there has been a good contribution by government members in relation to this debate, unfortunately, we see another pious amendment that has been moved by the Australian Labor Party in relation to this bill. This time, of course, it is reflecting on the fact that they believe the government should be doing more in relation to multinational tax avoidance. I cannot help but think that once again we see a situation where Labor's narrative in the House sits at strange odds with the general community perception about Labor's economic approach.

The actual amendment that has been put before the House sits, and dovetails quite nicely, with Labor's ongoing narrative that the way in which—as best as I can tell—Labor intends to pay for their multi-tens-of-billions of dollars of additional spending is to look at being able to recoup additional revenue through the use of the kinds of initiatives that they allude to in this amendment.

And so it is that I consistently hear from Labor members opposite—and we heard it in the contribution of the shadow assistant Treasurer and from the member for Scullin—that Labor's approach in relation to now wanting to put some $38 billion to $40 billion of spending back into the budget is that it will be funded through a crackdown on multinational institutions. The amendment that has been put in relation to this debate goes to the core of Labor's attempt to try to pretend that that is in some way going to provide the revenue that they need to bring about the kind of fiscal consolidation that the government is focused on.

Unfortunately though, the facts simply do not accord, yet again, with Labor's narrative in relation to both those issues—those two issues being multinationals paying tax and the second being their ability to raise enough revenue to make sure that those additional spending initiatives that Labor would like to reintroduce into the budget are actually able to be covered off.

We have seen the Labor Party attempt, very poorly, to make changes to transfer-pricing rules in 2012 and 2013. They did it through the Tax Laws Amendment (Cross-Border Transfer Pricing) Act and through the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Act 2013. It was very clear to the coalition then that the consequence of those acts was going to be that the government was going to massively ramp up compliance costs but not actually get the balance right with respect to ensuring that compliance versus the integrity of the tax system would be in fact balanced. Labor is big on rhetoric when it comes to this matter but their follow-through is, unfortunately, quite poor.

The coalition, in contrast, has a proud track record in this sense. We have long supported legislation that counters transfer-pricing, having introduced the original legislation in 1982. In fact, the Treasurer identified addressing base erosion and profit shifting as one of the key issues that G20 finance ministers are focusing on throughout this year. Indeed, in the February meeting of finance ministers in Sydney as part of the G20 process, the Treasurer was able to steer a very good outcome for those G20 members to ensure that there would be strong in-principle agreement. It actually was part of the BEPS process—that is, base erosion profit shifting process—which is taking place throughout this year. There is action by the coalition both in an historical context—having moved the original legislation—and now more recently through our activities in the G20.

I say to the Australian Labor Party a very simple message—that is, the government is actually acting on base erosion and profit shifting. Labor's approach was heavy-handed when it came to red tape and compliance. Labor's approach has failed miserably. Most importantly, not for one second should Australians hold the view that Labor's narrative, their attempt to pump some $38 billion or $40 billion back into the budget, will be covered off by an attempt to try to squeeze more money out of international institutions. The government is alert to failings in this regard. The government is making reforms and, in fact, the coalition is leading international discussions in making sure that the BEPS issue is addressed. It stands in stark contrast to the kind of political games of the Australian Labor Party are playing with an amendment such as the one that has been moved by the shadow Assistant Treasurer.

Fundamentally, the Australian Labor Party needs to recognise that they need to make some hard decisions when it comes to fiscal consolidation and when it comes to putting the budget back on the right track. They cannot mask their decisions by saying, 'Well, we will find the additional revenue for $30 billion or $40 billion of additional spending by magically squeezing more money out of multinational institutions. No, that is in fact not going to provide anywhere near the kind of revenue the Australian Labor Party is proposing. Rather, what Labor needs to do is undertake some of the tough choices about making sure that Australia as a nation and the federal government as an entity live within their means.

When I hear contributions like that from the member for Scullin, who made comments that he believed the budget unfairly put too much pressure on pensioners, for example, and on those of lower socioeconomic status, I say to the members opposite, 'Why is it that Australian Labor members profess so much concern for pensioners yet will happily turn a blind eye to the fact that they are lumbering the next generation of Australians with debt that will take decades to repay?' I stand at the dispatch box here and when I look up at the Australian students in the gallery I know that those children are going to be the ones that will be paying off Labor's debt for the next 20 or 30 years. I say to the children of Australia that they are going to be responsible for paying back this government's largess for decades. I say to the Australian Labor Party we do not need lectures about there being an unfair burden on particular elements of the community. Because the reality is that the Australian Labor Party are being grossly hypocritical by making comments like 'it is unfair that this particular group is penalised' meanwhile conveniently ignoring the fact that the very real impact of the past six years of Labor's failed economic approach has been that young Aussie kids are now indebted and will take 20 or 30 years to pay back that debt.

The reason that is germane to this debate is because the fig leaf that Labor uses, trying to explain how they can possibly put forward a proposal to reintroduce $30 billion or $40 billion of spending back in the budget, is to miraculously find the revenue in multinational institutions. I have heard it from the shadow Treasurer. It is not only the shadow Assistant Treasurer who comes up with these pithy little amendments; it is also the actual shadow Treasurer—the alternative Treasurer of the country—who turns around and makes comments such as 'we will find the revenue from multinational institutions who are not paying their fair share'.

I think it is important that all Australians recognise that these kinds of amendments, while they are fun and games for the Australian Labor Party and while it might tick some kind of factional box for the shadow Assistant Treasurer, the reality is that it will not provide anywhere near the revenue that Labor needs. Labor needs to actually step up to the plate, make some hard decisions and recognise that the populist approach to economics got them into trouble in the first place. It will not get them out of trouble until they have the fiscal discipline to implement the kinds of tough decisions that mean Australia can live within its means. In rejecting the opposition's amendment, I also take this opportunity to commend the bill to the House.

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