Wednesday, 2 March 2011
Tax Laws Amendment (2010 Measures No. 5) Bill 2010
Consideration in Detail
Bill—by leave—taken as a whole.
by leave—I move opposition amendments (1) and (2):
(1) Clause 2, page 2 (before line 1), table item 5, omit “Schedule 7”, substitute “Schedules 7 and 8”.
(2) Schedule 7, page 26 (after line 10), add:
Schedule 8—Providing tax receipts to individual taxpayers
Income Tax Assessment Act 1936
1 After section 174
174A Taxation receipt to be provided with notice of assessment
(1) A notice of assessment for an individual under section 174 for the financial year ending 30 June 2011 or any later financial year must be accompanied by a taxation receipt, setting out:
(a) a break-down of how the amount of the assessment was spent on different functions in the financial year; and
(b) the level of Australian Government net debt.
(2) The information in the taxation receipt must be calculated at the time the assessment is made, using the most recently published budget economic and fiscal outlook report or budget outcome report for the financial year. The amount spent on different functions must be calculated by reference to the nominal proportion of Budget expenditure constituted by each function.
(3) A taxation receipt for subsection (1) must, at a minimum, contain the information shown in the following table:
Information to be included in taxation receipt
The name and tax file number of the taxpayer.
The amount of the assessment.
The level of Australian Government net debt at the end of the financial year and at the end of the previous financial year.
The taxpayer’s share of the Australian Government net debt for the financial year, to be calculated by dividing the Australian Government net debt by the number of individual taxpayers.
How much of the taxation revenue raised under the assessment was expended for the welfare function, broken down into the following sub-functions:
(a) aged pension entitlements;
(b) disability pension entitlements;
(c) family benefit entitlements;
(d) unemployment and sickness benefit entitlements;
(e) other welfare benefit entitlements.
How much of the taxation revenue raised under the assessment was expended for each of the following functions:
(d) foreign affairs and economic aid;
(e) recreation and culture;
(f) housing and community services;
(g) industry assistance and fuel subsidies;
(h) public order;
(i) transport and communications;
(j) labour and industrial relations.
How much of the taxation revenue raised under the assessment was expended in transfers to the states, territories and local government authorities.
How much of the taxation revenue raised under the assessment was expended to service public debt interest.
How much of the taxation revenue raised under the assessment was expended for other public services.
It’s back! The tax receipt is back, and it will keep coming back until we give Australians the opportunity to hear exactly how their tax is spent by a government that is focused so much on waste. I can see people up in the gallery wondering what the receipt is about. Australians work damn hard for their money, they work incredibly hard for their money. They pay income tax, but in doing so they never get a thankyou note from the tax office, a receipt or any explanation of how their hard earned tax is actually spent by the government.
I take a leaf out of Kerry Packer’s book on this. Kerry Packer said, ‘Why would you give the buggers any more money than you have to give them, because they do not spend what they have properly anyway?’ He said that last time Labor were in government. Then we came in and we spent it wisely. We had surpluses and put $100 billion aside for a rainy day, and Labor came back in and spent it all. It all went.
We went to the last election promising that each year taxpayers who remit their tax to the tax office would receive a receipt. Firstly, I think it should thank the taxpayers—‘The Australian government thanks you for the $20,000 in tax you paid in 2010-11.’ This tax receipt would also detail where your taxes have been spent and the level of Australian government debt.
It is risky. In this case, if you paid $20,000 in tax then $6,480 would have been spent on welfare—that is nearly a third—$3,200 on health, $1,860 on education, $1,180 on defence, $320 on foreign affairs and economic aid, $300 on housing and community, $740 on industry and fuel subsidies, and so on. We would be telling Australians where their money is going, and Labor does not like that. We will do that because we believe it is good policy. It is good policy that people know exactly what proportion of their taxes is going to what area of expenditure.
We are doing that because it is part of our transparency agenda, an agenda that the Labor Party, in partnership with the Independents, said would open the curtains and let the sunshine in. Let us bring it on and have an open and accountable parliament. Let us have a new paradigm where everybody holds hands together, sings Kumbaya and says, ‘Hang on guys, we’re going to let you see the full entrails of government’. But no, this Assistant Treasurer, this Treasurer and this government last time, unbelievably with the support of some of the Independents, voted against transparency. We want them to vote every time this comes up; every time, we want them to vote against transparency. The sole defence that the Assistant Treasurer had last time was that this will somehow delay the processing of tax returns. Well, we have changed the amendment this time to accommodate the wishes of the Assistant Treasurer. Last time he was a bit more animated, whereas this time he is just looking down and writing his next speech to the AWU—just drafting and redrafting. I can see him pencilling into every sentence the word ‘Combet’! How many times did he mention ‘Combet’ on Q&A? How many times did he try to tie Greg Combet to the carbon tax? It was not just Julia Gillard’s carbon tax; it was Julia Gillard and Greg Combet’s carbon tax.
As the shadow Treasurer has just summed up, nothing could be clearer than the intent of this amendment, an amendment that will let the sunshine in. We remember the rhetoric when those opposite formed government with the support of the Independents, in particular the member for Lyne, who wanted to let the sunshine in. This place was going to be transformed. As we said when we debated this amendment last year, the roof was going to be ripped off and the sunshine was going to come in. With this amendment, which would give taxpayers access to information about how their taxes are spent, you could not get a clearer example of letting the sunshine in. But the Assistant Treasurer, who is at the table, is opposed to this measure, the government is opposed to this measure and, last time, the Independents, including the member for Lyne, were opposed to this.
The shadow Treasurer made the point that when we debated the substance of this amendment towards the end of last year, on another tax law amendment bill, the Assistant Treasurer talked about the possible delay to tax returns. During that debate he also had a number of other excuses ranging from the absurd to the ridiculous. He told the House that there might be security concerns in fulfilling this amendment—as if tax file numbers were not sent out on tax returns already. I am not sure how the Assistant Treasurer thinks taxpayers get their tax returns. He also raised the very real spectre of mass litigation from taxpayers upset with the information they have been sent!
But give the Assistant Treasurer a break; he was new to the job and he was relying on the advice that was being thought up and sent to him in real time during that debate. But, as the shadow Treasurer said, this is a very straightforward measure. It is an amendment to let the sunshine in. The Independents should have no trouble supporting this amendment. All of the excuses invented by the Assistant Treasurer, the member for Maribyrnong, last time have been shown to be utterly absurd. And now they have the opportunity to vote on this amendment again in the full knowledge that it is a choice about whether they give taxpayers access to information about how their taxes are spent—pure and simple.
Letting the sunshine in is something that has been advocated by the member for Lyne. He did so in those heady days after the federal election. It was very obvious that he was channelling The 5th Dimension. He was very much in the zone of The Age of Aquarius. I do not remember the song because I am not quite that old. Of course, we have all seen Forrest Gump. I thought that perhaps the member for Lyne is a fan of Forrest Gump and that is why he wanted to let the sunshine in. When I saw him grow a beard it became obvious to me that he is a fan of Forrest Gump. And he started running, just like Tom Hanks did—from Green Bay County across Alabama, from sea to shining sea. He has shaved the beard off, so that probably means he has stopped running. Unlike Forrest Gump, though, I think he has turned around to discover that no-one has been following him. This is a good chance for him today to vote for transparency and vote for the very thing that he said was important: transparency for taxpayers, transparency to let the sunshine in.
This amendment is something the government should agree to. It is an amendment we will keep pursuing. If the Assistant Treasurer believes in transparency he would simply agreed to this amendment today. He would not put forward the absurd and ridiculous propositions he put forward towards the end of last year, when he said a simple amendment to tell taxpayers how their taxes are spent would somehow threaten the security of taxpayers’ information and may lead to some sort of mass class action that would bankrupt the Commonwealth. It was ridiculous and, some months on, he would now know that. I urge him to support this sensible amendment.
This is really a test of whether Labor walks the talk. The government has made much of this being an era of improved transparency. We have seen speeches from the Prime Minister, including the Light on the Hill speech, about how this will be a new era of openness and accountability. At the National Press Club the Prime Minister said, ‘I believe Australians want greater scrutiny of their government and greater accountability to parliament.’ Well, here is an opportunity to actually do what Labor said it was going to do. This is a chance to walk the talk. It is important because the Australian public deserve to know where their money is going and how it is being applied. The shadow Treasurer has highlighted this amendment as a mechanism of achieving that goal.
You do not have to believe the opposition about this—and you might even be tempted to set aside what the Prime Minister says as people are being asked to set aside her assurance that there would be no carbon tax under a government they led!—but you might be persuaded by President Obama. In his State of the Union speech in January he said:
In the coming year, will also work to rebuild people’s faith in the institution of government. Because you deserve to know exactly how and where your tax dollars are being spent …
That was President Obama. You have heard what Labor has said and how they now won’t walk the talk. You have heard President Obama talk about the importance of this. But it gets worse. This government actually demands others do it but will not do it itself. If you look through some of the Australian aid program requirements that AusAID releases, it sees as a key cornerstone of improving governance in other countries that they should make this information available. It is a key governance objective. The Office of Development Effectiveness report says:
Public accountability depends on the availability of good information about the use of public resources and careful monitoring of government performance.
It in fact requires recipients of funding through AusAID to do what the government refuses to do itself. If you were to look at the line in this tax receipt you would actually know how much money is going to foreign affairs and economic aid. Accompanying that requirement is for other governments to do what this government will not. The government must get behind this measure if it believes at all in accountability and openness and in the good governance that sits behind the public knowing where its money is going. Take it from Obama and take it from the Prime Minister when she is in full flight, but reflect on the fact that this government will not walk the talk. They can support this amendment.
If there was one piece of political advice that you would give to any aspiring Prime Minister, it would be that they should be open and accountable; it would be that they could be the people’s champion. I would have thought that the Assistant Treasurer—given that I notice that he is down to $2; in fact, he is in front of the current Prime Minister in terms of being odds-on favourite—might want to be the people’s prince. One way that the member for Maribyrnong can become the people’s prince, can be the champion of the people, can make sure his ambition and dream is realised by the time of the next federal election, is to make sure that he actually follows through and gives the people what they want. We know that in his ears we hear them chanting, ‘We want Bill. We want Bill. We want Bill.’
To deal with the amendments very directly, we know that taxpayers want to know they are getting value for money, and they are not getting value for money from the current Prime Minister. The potential Prime Minister might add value for money. Taxpayers want value for money and they want to know where their hard-earned taxpayer dollars are going. That is why the coalition is absolutely committed to providing transparency by providing a tax receipt back to taxpayers so that they know the priorities of government and the way in which their money is being spent.
The other key point that I will make quickly is that it is up to the Independents as well. It is one thing to say something before the election—and we know that the Prime Minister has form in this area—but it is a separate thing to follow through with it. The Independents have the opportunity here and now to demonstrate their genuine independence, to demonstrate their commitment to standing up for Australian taxpayers and to demonstrate their absolute commitment to transparency. That is why the coalition through the shadow Treasurer brings these amendments to the bill and seeks the support of the Independents to make sure taxpayers know where their money is going. I say to be people’s prince: now is the time to step up.
The amendments we are putting forward today are based upon an important principle: that the people of Australia have the right to know how their tax money is spent by government on their behalf and that as a modern, accountable government, we—all of us in this place, all of us in the people’s house—have a responsibility to do everything we can to make it as clear and simple and transparent as possible.
It is very hard for anybody to get their head around the fact that tax revenues four years ago were $278 billion and that tax revenues this year are budgeted to be $320 billion. Those are enormous numbers, but when it is broken down—as we are proposing in this very sensible, user-friendly, customer-responsive amendment—into a proportion of the individual tax payment by an individual Australian then it makes it much easier for citizens to understand how their money is being spent and what purpose it is being put to.
I could give an example that might appeal to the Assistant Treasurer. If he thinks back to his days as a private schoolboy at the elite Xavier College in Melbourne, before he set out on his Labor-for-the-top-end-of-town career path, he might well reflect on how valuable it would have been for his parents—
This is a very important analogy, Deputy Speaker. His parents, in paying the school fees, would have found it very useful to get a receipt every term which explained clearly how the money had been spent: how much of it went on the enormous, leafy playing fields, for example; how much went on the lavish buildings and so on. Similarly, an important principle for Australians is that they have the capacity to understand how their money is being spent. That is the substance of these amendments and I commend them to the House.
Our amendments, the amendments that have been brought forward by the shadow Treasurer today, are about transparency and honesty in government. Julia Gillard said—and we cannot repeat it enough—when she was handed government by the Independents and by the Greens that she would draw open the curtains and ‘let the sun shine in’. We hold her to account on that, but her record is not that good. Her record on openness, accountability and transparency is not very good at all. That is why the Independents made the Labor Party sign an agreement in section 22 of annex A of the agreement to form government with Labor that they needed to take further steps to be an open and accountable government. This is the first big test for the Assistant Treasurer here today. He has the opportunity to allow taxpayers to know how their taxpayer dollars are going to be spent.
This government has a toxic record of secrecy. It has a record of secrecy in a number of things, the first of which is the NBN. It has been very secretive about the NBN. It will not do a cost-benefit analysis of the NBN because it does not want the people to know. This is despite the fact that the chairman of the Productivity Commission has called for it, the governor of the Reserve Bank has called for it. In fact the OECD reports have called for it. But, no, this government has a toxic level of secrecy. The pink batts issue is another example. This government has rejected a judicial inquiry into the $2.4 billion pink batts debacle. The mining tax as well. The government will not release the evidence on which its assumptions are predicated. And now we have the carbon tax, which this government promised it would not introduce before the last election and yet—surprise, surprise—it is introducing today.
It is important to reflect upon this promise, to reflect on the honesty of this government. I would like to quote the great Labor luminary Graham Richardson, because he has something to say on this matter. Graham Richardson, who lives by the philosophy ‘whatever it takes’ said this:
No weasel words, no amount of spin can alter the record; she promised solemnly there would be no carbon tax from a government she led. The words were strong. There was no wriggle room, no back door.
We do not wish there to be a back door on accountability in this government. We want honesty in this government. We have seen fake Julia, we have seen real Julia, we have seen dishonest Julia; we want honest Julia. This amendment goes directly to honesty and transparency in this government. I urge the government to support these amendments.
It is critical that those opposite acquaint themselves with a document which it is clear from this debate they have not seen. That document is called the budget. The budget sets out how Australian government expenditure is broken down. And that is all this amendment attempts to go to. But rather than try to present it in an overall way, setting out the overall spending, those opposite would like to have us break it down in some precise little dollar figure. As they know full well, were there to be an error in this it could easily prompt litigation. The evidence has been brought forward by the ATO that doing this—
Mr Deputy Speaker, the less they have to say, the louder they shout it! This is simply another stunt from the opposition, another attempt to pretend that they themselves are the friends of transparency. Of course, as the House knows, the great transparency measures in Australian governance have come about under the Gillard government. The MySchool website: tomorrow we are going to see MySchool 2.0. I had the great pleasure today of being with the Prime Minister and the Minister for School Education in Turner public school—a terrific school in my electorate—where we focused on the great transparency initiatives. This was an initiative those opposite were happy to back. It is a bit like the tariff cuts: they were there cheering from the benches, but they were not the ones implementing the transparency reform. That is what they hate: they like to talk the talk on transparency but they are not the ones who walk the walk. The MyHospitals website provides Australians with more information than they have ever had before about the performance of their hospitals. The MyChild website has provided critical information to Australian parents choosing a childcare centre. These are the kinds of fundamental transparency reforms that the Gillard government has brought about—not stunts, not tricks, not ‘divide it by the number of taxpayers’ exercises, which is really all this amendment is, but new information.
I would suggest that those opposite might do well to spend more time looking at the budget papers and less time thinking about how they can come into this place as wreckers, playing stunts, pretending to be friends of transparency rather than standing up for new information coming into the public domain, as the Gillard government has done.
I would like to talk briefly about the shadow Treasurer’s amendments. The intent of the amendments is to explicitly require the Australian Taxation Office to inform individual taxpayers where their taxpayer funds are being spent each year—for example how much is spent on education, welfare—and also to inform individual taxpayers of the total Commonwealth net debt in aggregate and their individual share.
I want to go to the previous speaker, the member for Fraser’s, comment about the budget. This is a critical time, when the government of the day has the opportunity to adopt greater transparency and not just to oppose for the sake of opposing. In my business I realised that transparency went to the heart of efficiency, an efficiency brought about by encouraging people like my internal accountants, my business managers and staff to use openness and transparency in our business to find ways in delivering a stronger bottom line in conjunction with the reappropriation of capital funds—in my case trucks and equipment—to create greater efficiencies in the business. Why should government be any different to this?
As a new member of parliament, this amendment has no political hidden agenda other than you either want transparency or you do not want it. Now the government will argue that the information that these amendments speak to is already available in the budget. Let me tell the House that that information is in the budget, but that is also like saying that everyone in this House could play for the Wallabies. Well you could play for the Wallabies, but unless you have played rugby all your life and you understand the fundamentals of the game, unless you happen to play for a club that has a greater pick-up rate than other clubs, and unless you have a particular sporting skill set that allows you to play at an elite level of athleticism and your fitness levels are that of international athletes, then it is impossible that you could play for the Wallabies.
However, this amendment goes to the heart of transparency for those people who are not elite economical athletes, who simply want to see transparency in this domain when it comes to understanding where their tax dollars are being spent. Here is your opportunity to do the right thing and let the sunshine in. The Independents have asked for more transparency, and as an opposition we are delivering that. We encourage the government not to oppose for the sake of opposing. I support the amendments to this bill.
It is with a heavy heart I have to inform the opposition that—whilst they have made valiant efforts—their arguments have failed to convince the government, in this case. Let us go to the heart of the issue of the amendments by the member for North Sydney and the member for Casey. The argument goes that if we provide tax receipts in the form outlined in this amendment we will have a fundamental change in the information available to taxpayers about where their tax dollars are being spent. There are a series of objections to this proposition. I was refreshing my memory, while listening to the opposition, about the evidence tendered by the Australian Taxation Office at the estimates hearing, and again by Treasury. I could summarise the problems with the amendments under six points. Firstly, there is its cost. These people opposite want to send information out to the taxpayer in the name of transparency, which will increase the cost of the tax system.
The second objection we have to this proposition is that on face value it sounds very simple, like going down to the shop and buying a doughnut and getting a receipt for it. You know what you paid for and you have your receipt. The reality is that the information sent out would be misleading. It may surprise the members opposite but something like 4½ million Australians file their tax returns in the first two months of the tax system, and that is a good thing.
The member opposite says ‘That is a good thing.’ But the problem is that some of the information required under the opposition’s amendment does not become available, apparently, until September. Again, never let a detail or a fact get in the way of an opposition on a ‘no’ case.
The third objection to this ill-conceived opposition policy—as much as I feel that I am cheating by putting facts in front of the opposition, because that is not a standard they apply to themselves—is that this information is available. I am happy to introduce the opposition to the internet but they are not the biggest fans of the internet. That is why they are not supporting the National Broadband Network. Furthermore, I think their amendment is poorly drafted and has unintended consequences.
I hear the mover of the amendment say ‘Oh, no—we changed our proposition. We heard what you said last time and we have updated the resolution.’ If you look at where this matter was debated in the estimates committee you see that the opposition failed to address a lot of the mechanical and really detailed issues with their amendment to our tax laws. The Australian Taxation Office takes a view on what would happen if this opposition amendment were to be passed. Mr Monaghan, the Deputy Commissioner of Taxation, was asked by a senator what he thought would happen if he implemented this receipt proposition. The question was a long one; I am paraphrasing. What would Mr Monaghan of the tax office know! He is only in the tax system—as opposed to the opposition, who theorise! Mr Monaghan said:
It is highly likely that some taxpayers will challenge an assessment process where they can.
If there is a challenge to a tax technical point, like whether or not you have the various assessments down properly, the tax office cannot take any recovery action until the court case is resolved.
As much as the opposition may wish that reality is not reality, if they are required to provide taxpayers with information in a personalised way it will affect the assessment process. They have not addressed the tax office evidence. Let us get to some of the real issues hiding behind this Tea Party-like proposition of the opposition. It bemuses me when I look at some of the contributions of the shadow Treasurer’s fan club, whose members come in loyally to back the shadow Treasurer. And why wouldn’t they? It is not an easy choice for some of them, the true believers, who believe that the Liberal Party should go back to being the Liberal Party. When I look at some of their contributions, the question occurs to me: how on earth is it that the coalition, when they went into opposition, had ideas that they never had in the 11 years they were in government? And, indeed, the member for Mackellar has been there for a lot longer than 11 years. I look at the CV of some of the speakers proposing their amendments—the member for Higgins worked for Treasurer Costello, the member for Casey worked for—(Time expired)
That the motion (Mr Hockey’s) be agreed to.
Bill agreed to.