Clive Palmer (Fairfax, Palmer United Party) Share this | Link to this | Hansard source

I have a question for the Treasurer. Why does the government require all Australian businesses and enterprises to pay provisional tax before any profit is earned? This tax stops business using their own cash to grow, employ people, expand the economy and exports to stimulate the nation. How can a low-taxation party like the Liberal Party government not eliminate the requirement to pay tax before profit is earned?

Joe Hockey (North Sydney, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for the question. There are many changes we would like to make to the taxation system, and there is one before the Senate at the very moment—and that is to get rid of the carbon tax. There is another tax that we want to abolish—the mining tax. We want to simplify the taxation system, and that is why prior to the last election we undertook to provide a taxation white paper and to take the recommendations of the taxation white paper to the Australian people at the next election. The fundamental point is that if you are to undertake the sorts of reforms that the honourable member believes to be worthy, such as abolishing provisional tax, you need to have money in the bank. You need to have the financial capacity to deliver that sort of reform. When you are running significant deficits, you cannot do anything to undermine your revenue base.

This is why we need to pull back on the wasteful expenditure that was the legacy of the last Labor government. That is why we cannot proceed with taxes like the mining tax, which has raised three per cent of the revenue Labor claimed, but still proceeds, sir, with all the expenditure against the tax that has raised no money. That leaves the budget worse off—not just today, not just tomorrow, but well into the future. If you are going to undertake significant tax reform, you can best do it when you are not relying on a clutch of new taxes to increase the revenue base, but rather you can look to compensate people for the transition to a new revenue system that does simplify the taxation system overall and makes us a more competitive nation. But I would say through you, Madam Speaker, to the member for Fairfax and all members of this parliament: we need to be in a position where we can simplify the taxation system, deliver fairer and simpler taxes and deliver reduced taxes—which is exactly what the coalition promised in the budget and which it will do through its taxation reform paper. At the end of the day, you are absolutely right—the low-tax parties are the coalition parties. The high-tax party is the Labor Party, and that is why I expect the support of Palmer United in getting rid of the carbon tax package and getting rid of the mining tax package.