Tuesday, 23 February 2016
Tax and Superannuation Laws Amendment (2016 Measures No. 1) Bill 2016; Second Reading
I rise to speak on the Tax and Superannuation Laws Amendment (2016 Measures No. 1) Bill 2016. I am conscious of the time, and so I will not be speaking for a very long time, but I have to respond to the previous speaker. It is amazing that when the issue of housing affordability gets raised that the government's first response is to talk about live cattle exports! I mean, if that is going to be their line between now and election day then bring it on. Bring it on!
I must say, as someone who had to go to about five or six auctions before getting the house that my wife and I are now living in, and at each stage, at auction after auction, being outbid by property agents and buyer's advocates—who were there not to give a home to someone who wanted it in the area but who was just engaging in what was effectively part of a tax scheme that allowed them to rent it out at a low rent and then flip it and get a discount at the end of it—that there are hundreds and thousands of people, if not millions of people, in this country who want housing to be made more affordable. They want to see action on negative gearing and they want to see action on capital gains tax, because they know that that is what has contributed to pushing up prices not only to buy a house but also to rent to the point where people are not able to live near where they work or study. So, if the response from the Liberals to a debate about making housing more affordable so that people can buy their first home is to talk about live cattle exports, bring it on. I cannot wait for the next few months if that is going to be the debate.
Over the last 6 months the Greens have fought hard against the government's push to increase the GST by 50 per cent—a push that, had it been successful, would have seen many ordinary Australians slugged to enable the government to keep unfair tax breaks for the super wealthy—like the capital gains tax that they do not seem to have the courage to tackle. We said that tax reform needs to start at the top, not at the bottom, and that fair tax reform should be about closing the gap between rich and poor. We opposed the GST when it was introduced, we have opposed it being spread to food and medicines and we have supported campaigns to remove it from tampons.
We have done this because it is a regressive tax. In other words, you pay the same amount regardless of your income. To use the classic example: if you are a millionaire and you buy a birthday cake for your kids, you will pay the same amount of tax as a low-income worker who buys the same cake. What this means in practice is that the poor end up funding the unfair tax breaks of the rich. So we fought the GST and we fought off the GST rise, and as a result the Prime Minister has said that any changes to the GST have been taken off the tax reform table.
But now, despite what the Prime Minister has said, government is continuing with their budget plan to extend the GST to digital services like Netflix and software apps on iPhones. This bill will mean the GST is extended to cross-border supplies of digital products and services imported by consumers. In other words, this Netflix tax is a great big new tax on everything on the internet. Downloadable books, music and movies will all be affected. Business and work apps, fitness apps and games will all be affected.
And there has been virtually no debate, despite the tax reform debate we are supposed to be having as a country, on the implications for everyday Australians. The government has said this Netflix tax will raise $350 million, but there have been suggestions that the compliance costs for the ATO will be large and so in terms of revenue it may not have much impact on the budget. But so far there has been no modelling released on how it will affect consumers. What we do know is that one of the biggest cheerleaders for the tax is Foxtel, who own the on-demand TV service Presto. Obviously they are hoping it will put a dent in the success of Netflix, but is helping Rupert Murdoch a reason to put in place a Netflix tax?
The Greens are concerned about this bill. We want to see it properly scrutinised by a senate committee, we want to see Treasury's modelling and independent modelling on who will be hardest hit and we want to hear from the industries affected as to what it will mean for them. We do accept that there is some merit in ensuring that, generally, tax treatment of non-resident companies and Australian companies that operate online should be similar. We do not want to see multinationals avoiding paying tax, and that is why we have been fighting hard for tax reform that reins in multinational companies' diverted profits. But we are equally concerned that the government is extending the reach of the regressive GST and doing so when there is a clear alternative, which is to end unfair tax breaks and maintain and extend our progressive income tax system.
So we will reserve our position on this bill until it has been closely examined by the Senate committee, but we reiterate to the government that, if your concern is about balancing the books—although we do not hear much about the budget emergency anymore—there is an unfair way to do it and there is a fair way to do it. So far you have been trying the unfair way. If you want a plan that has a chance of getting through the Senate, try the fair way. Try saying that we are going to start tax reform at the top by removing some of the unfair tax breaks that are enjoyed by very wealthy and large companies in this country, and you will find that there is a lot more money there than by asking everyday Australians to pay a bit more to go see the doctor or get a blood test.
We have a choice: we can do it fairly or we can do it unfairly. Sadly, in the same way that we hear capital gains tax reform is not on the table but maybe it is and we are told GST rise is off the table and then a bill comes before us to say it is not, it is unclear if this government has any plan when it comes to tax other than to defend their large and wealthy backers who put them there and who never seem to get hit by any of the tax bills that come before this parliament. So we are going to scrutinise this bill closely, but we urge the government to go back to the drawing board and start tax reform at the top, not at the bottom.