Wednesday, 31 July 2019
Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019; Second Reading
The Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019 contains seven separate measures dealing with various Treasury laws and tax activities. I foreshadow that at the conclusion of my remarks I'll be moving an amendment to the question before the House.
Schedule 1 of the bill prevents certain tax deductions from arising when newly privatised entities repay a concessional loan. Schedule 2 amends the tax law to prevent small business capital gains tax concessions from being available for assignments of the income of a partner and other rights or interests in the income or capital of a partnership that are not a membership interest of the partnership. Schedule 3 limits deductions for losses or outgoings incurred that relate to holding vacant land under certain circumstances. This would essentially end negative gearing in relation to vacant land. Schedule 4 extends anti-avoidance rules for circular trust distributions to cover family trusts. Schedule 5 allows the Australian tax office to disclose certain business tax debts to credit reporting agencies. Schedule 6 allows the Australian tax office to develop and administer a framework for electronic invoicing. It will surprise many that that does not already exist. Schedule 7 ensures that an individual's salary sacrifice contribution cannot be used to reduce an employer's minimum superannuation guarantee contribution.
We'll not be opposing the bill in the House. I will be moving a second reading amendment, and I also foreshadow that we will be referring the bill to a committee in the other place. I'd like to make a few important observations, particularly about schedule 3 of the bill, because it does deal with the politically hot topic of negative gearing on real estate. You would have had to have been living on another planet if you don't know that this was a very hot issue during the May election campaign. During the election, the Prime Minister said that Labor's policy on negative gearing would force a 'concrete landing' for Australia's housing market and 'erode the value of Australians' homes'. He said changes to negative gearing could drive up rents by 22 per cent in Brisbane, while prices could fall by 16 per cent in Melbourne. He also said that 30,000 jobs could be lost across the construction sector. This was all true—but how so much can change over a very few short weeks!
I'm absolutely astounded that a bill made it through the coalition's caucus to remove negative gearing arrangements on certain real estate. There'll be owners of real estate throughout urban and regional Australia who'll be surprised that a government that campaigned so hard against these measures is introducing such a bill in the second sitting week of its new term of office. There'll be tradies throughout New South Wales and other places who I'm sure are going to be saying, 'We voted for this government because we were concerned about negative gearing and here they are introducing a bill that abolishes the very rights they vowed to protect.' So I'm sure this is a matter that will get a bit of attention during the committee consideration of this bill in the other place.
I'd also note that there have been some significant stakeholder concerns with the measure included in schedule 5 of the bill. We broadly support the measure, but the disclosure of business tax debts to credit reporting agencies will be a sensitive matter—and I'm sure the Assistant Treasurer knows that. It will be a sensitive matter for many businesses, and it's worth careful consideration by all parties before we jump into it. We'd like to hear from some of those parties to ensure that we've got the details of the legislation right.
We note that concerns have been raised in relation to this matter by the Institute of Public Accountants, for example. They have made the points that there are likely to be difficulties in keeping the information stored by credit reporting bureaus accurate and up to date; there's a need, in addition to that, to put in place safeguards that ensure data is removed once debts are paid; and there's the need for privacy protections to be embedded in the legislative framework. We share these concerns while not taking away our general support for the provisions which would enable the ATO to disclose to credit agencies the nature of these tax debts. I'd expect these matters to be considered by the Senate committee as the bill is investigated.
We also note that schedule 7 of this bill would prevent employers from underpaying superannuation when an employee chooses of their own volition to salary sacrifice into their superannuation account. This is a loophole that's well past its due date, and we commend the government for finally getting around to working on this. It is actually the subject of my second reading amendment. We call on the government to act swiftly to close other loopholes that allow employers to get away with ripping off their workers, whether through underpayment of superannuation or through wage theft, but we won't be holding our breath on that.
This government has been asleep at the wheel when it comes to tax integrity. One or two bills that fiddle around the edges of our tax system are not going to change that. The Liberal's signature policy on tax so far, in their six years of flailing government, has been an $80 billion giveaway to the big banks and multinational corporations. Only Labor has been serious about cracking down on these loopholes and making multinational corporations pay their fair share of tax. It was Labor's laws that the Liberals opposed that underpinned the tax office's $300 million win against Chevron. It was Labor's laws that the Liberals opposed that delivered the tax office's $529 million settlement with BHP. But Labor is here to be constructive. We're keen to ensure that the integrity of our tax system is maintained. We're keen to ensure that the tax integrity bills brought before this parliament are the best bills possible. This is why we have referred this bill to a full and proper Senate inquiry. I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House calls on the Government to do more to combat superannuation theft and ensure that workers receive their rightful superannuation entitlements in full".
I'd hope this is an amendment that might enjoy the support of members opposite. With those remarks, I understand that the amendment is going to be seconded by the member for Cooper.