Kevin Andrews (Menzies, Liberal Party, Minister for Defence) Share this | Hansard source

On behalf of the Assistant Treasurer, I thank the members who have contributed to this debate. The Tax and Superannuation Laws Amendment (2015 Measures No. 3) Bill 2015 represents another important step in the government's economic action strategy. Our economic action strategy is about making our strong social safety net more sustainable and redefining the role of government in people's lives. The economic action strategy is about switching expenditure from consumption towards investment in order to increase our future productivity. And our economic action strategy is about repairing the budget. We are putting it back into surplus so that we as a nation can start living within our means again. Our budget decisions have not been easy ones but these decisions will ensure that our economy is strong and sustainable, because a strong and sustainable economy is a key to a prosperous Australia.

The Treasurer has said it before: failure to fix the budget and to take steps towards improving our economy now will impact on our living standards in the future. There is no alternative to the budget repair task. Therefore there is no alternative to the government's economic action strategy. We need to get on with the job of paying off the $123 billion of debt we inherited from the previous government. This bill will go part of the way towards doing that. There are two measures in the bill that will together return around $826 million to the budget over the forward estimates in fiscal balance terms. While they are both part of the government's economic action strategy and our task to repair the budget, the measures in this bill are about different groups of people. As I have said, the government is committed to returning the budget to surplus for the benefit of every Australian taxpayer.

The first measure in the bill will help us do exactly that. That is schedule 1, which abolishes the seafarer tax offset. Put simply, the seafarer tax offset does not work. The seafarer tax offset provides a refundable tax offset to Australian shipping companies for 30 per cent of salary, wages and allowances paid to Australian resident seafarers who are employed to undertake overseas voyages on qualifying vessels if the company employs a seafarer on such voyages for at least 91 days in the income year. The offset is supposed to increase employment in the shipping industry, but no noticeable increase in the employment of Australian seafarers has occurred. The offset has cost the Australian taxpayer but has achieved nothing. The repeal of the seafarer tax offset will return to the budget bottom line $16 million over the forward estimates period. While this is a small amount compared to the other measure in this bill, every little bit helps when it comes to the task of budget repair.

Australian taxpayers will also benefit from the savings returned to the budget by the other measure in this bill. Schedule 2 reduces the tax offsets available under the research and development tax incentive by 1.5 percentage points for the income years commencing on or after 1 July 2014. The decision to reduce the offset rates provided by the R&D tax incentive was difficult, but repairing the budget must be done as fairly and equitably as possible. Our decision making was guided by the need for every part of the budget to make a reasonable and proportionate contribution, including the R&D tax incentive. It is also important to emphasise that these changes to the R&D tax incentive are simple and straightforward. The changes will not affect the eligibility of companies for the incentive or the way companies claim the incentive; nor will the changes affect the administration of the R&D tax incentive more generally. The R&D tax incentive will continue to support thousands of eligible companies in all sectors of the Australian economy in conducting research and development through the provision of a generous, easy-to-access program. This measure will provide a gain to revenue and savings of around $810 million over the forward estimates period. Again, all Australian taxpayers stand to benefit from the government's efforts to return the budget to surplus.

Today I have spoken to the chamber about the two measures in this bill that cumulatively will return around $826 million to the budget over the forward estimates in fiscal balance terms. These measures are responsible. They represent another important step in our economic action strategy towards a stronger, more sustainable economy and a more prosperous Australia. And on that note, I commend the bill to the House.

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