Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Treaties I present the committee's report entitled Report 129: Treaties tabled on 19 and 26 June 2012.

In accordance with standing order 39(f) the report was made a parliamentary paper.

by leave—Report No. 129 contains the committee's views on a series of treaties tabled on 19 and 26 June this year. One of the treaties covered in this report is the agreement, done at Singapore on 1 June 2012, between the government of Australia and the government of the Republic of Singapore concerning the location of a Republic of Singapore Air Force helicopter squadron at the Australian Army Aviation Centre, Oakey. The agreement's purpose is to allow for continued deployment of a Republic of Singapore Air Force helicopter squadron at the Army aviation centre in Oakey, Queensland, which has been ongoing since 1997.

Given the lack of its own domestic training areas, Singapore greatly values its access to the Army aviation centre, and this agreement is a major element in our contribution to the bilateral defence relationship. Access is vital to the Singapore Air Force as it enables them to develop and maintain their military capability. Australia benefits from this arrangement, as strengthening the Singapore Air Force's capability makes Singapore a more effective coalition partner and contributor to regional security. The Australian Department of Defence has described the Singaporeans as model tenants, and the department has stated that the Singaporean deployment has, for the past 15 years, brought financial benefits to the local community. The Singaporean personnel live with their families as members of the community and contribute positively as they buy things from local businesses as well as use their services.

Apart from the indirect economic benefits this agreement also directly benefits Australian enterprises through access to commercial arrangements with the Singapore Air Force. For example, the existing agreement stipulates that a minimum of two-thirds of the workforce that provides maintenance to the Singaporean helicopter fleet are to be Australians. Singapore exceeds that obligation with approximately 90 per cent of the workforce being Australians. A commercial support estimate is conducted each year on how much maintenance support will be required. For the last two years the estimated obligation for the Singaporeans to include as Australian content has been between $11 million and $15 million, and they have more than satisfied that obligation as well. The committee supports this agreement and the continued positive relationship between both defence forces.

The Treaties Committee has also approved another two tax information exchange agreements with Bahrain and Andorra. The committee has now reviewed a number of these tax information exchange agreements and experience has found them to be effective. The Australian Taxation Office has provided some tangible examples to the committee. For example, Australia has agreements with the British Virgin Islands, Bermuda, the Isle of Man and Jersey. As of August this year 53 exchange of information requests were issued, of which 38 have been finalised. As a result, six amended assessments to the value of $52 million were issued. Tax Office auditors also identified a further $127 million as potential omitted income via requests made under these agreements.

Furthermore, the agreements act as a deterrent to those individuals who would otherwise seek to minimise their taxation commitments through transfers to low-taxation jurisdictions. Many individuals who previously used secrecy jurisdictions to avoid their tax obligations are abandoning them. For example, the Tax Office explained that from 2005 to 2011 there was a decrease in the entities transacting with Vanuatu from about 2,600 to about 300. Furthermore, since 2007-08 there has been a $12 billion reduction in fund flows to 13 high-risk secrecy jurisdictions, and fund flows returning to Australia from the same secrecy jurisdictions increased by seven per cent or around $5 billion in the 2010-11 financial year compared with 2007-08. It is in Australia's interests to develop its network of tax information exchange agreements with low-tax jurisdictions as it will make it harder for taxpayers to avoid or evade Australian tax.

Finally, the committee supports the agreement establishing the International Fund for Agricultural Development. Ratifying this agreement would see Australia's readmission to that fund. Although most governments and many NGOs attempt to tackle global poverty and hunger, the number of people experiencing hunger seems to rise rather than fall. When the Millennium Development Goals were established around the turn of the century there was a sense of optimism that we were going to halve the number of people who experience hunger. However, despite many efforts and all the available technology and expertise, the world appears to be making little progress. The fund's objective is to make available resources on concessional terms for agricultural development in developing member states. The fund finances projects and programs specifically designed to introduce, expand or improve food production systems. Australia was previously a member of the fund but withdrew in 2004 due to a number of factors, including questions over the fund's efficiency and effectiveness.

In 2011 AusAID conducted a comprehensive review and found that the fund is now considered by donors and developing countries to be an increasingly effective, results-focused, value-for-money development partner. Australia will make an initial contribution of up to $120 million over four years upon rejoining the fund and will seek a position on the executive board so as to have some influence in how the fund allocates its resources. The committee concludes that all the treaties covered in report No. 129 should be supported with binding action. On behalf of the committee, I commend the report to the House.