Thursday, 18 June 2020
Treasury Laws Amendment (2020 Measures No. 3) Bill 2020; Second Reading
The Treasury Laws Amendment (2020 Measures No. 3) Bill 2020 bill contains six measures relating to various aspects of Treasury legislation. They are sensible measures, in the main, that Labor supports. I'll delve into each of the measures in a bit of detail.
Schedules 1 and 3 make a range of minor amendments to the International Monetary Agreements Act 1947 to account for changes in the way that the International Monetary Fund conducts business and provides aid to developing countries. Under the current arrangements, the trigger event for a country-specific funding arrangement is an IMF request. The opposition is advised that the IMF will be reverting to a different set of arrangements whereby they will no longer be making a country-specific request, so we need to change our domestic arrangements to enable the minister and the governments to facilitate country-specific funding arrangements. These amendments will allow for new agreements to be struck by the minister without legislative amendments. However, any such agreement will be subject to the normal processes relating to international treaties and subject to extensive scrutiny by the Joint Standing Committee on Treaties, as is appropriate in the normal course of events.
Labor have always supported Australia's role as a member of the international community. The very act that this bill amends—the International Monetary Agreements Act 1947—was put in place after World War II by one of Australia's greatest Labor governments, the Chifley government. Since then, Labor have been unwavering in our commitment to the cause of positive global engagement and international aid. We see it as absolutely central to our national interests.
I'm encouraged by the government's decision on this bill. I encourage them to continue to work with developing countries and support the important work of multilateral development organisations. I hope that it preludes a change in the posture of our relations as a country with international bodies—a step away from the vacuous slogans of negative globalism to constructive engagement and active engagement, which are absolutely in our national interest. In these troubled international times, Australia, as a middle-ranking power, absolutely has an interest in ensuring that our international organisations—whether it's the International Monetary Fund or the World Health Organization—are functioning in the manner in which it is intended. So vacuous slogans about negative globalism have no role to play in our international posturing and engagement. I welcome the fact that these amendments are included in this bill.
Schedule 4 sets out an extension to the instant asset write-off provisions included in the coronavirus economic response package. This will allow businesses of less than $500 million aggregated turnover to claim an immediate deduction for depreciating assets that cost up to $1,500. I encourage businesses to take it up but fear that there is an understandable, if not a rational, uncertainty and reluctance for many businesses to accrue further debt, whether that is through paying for new equipment outright or whether it's through going to their bank and seeking further credit facilities to purchase new assets. We encourage them to think otherwise. But, with all the uncertainty around the economy over the next few months, their reticence is rational and understandable.
If we have a look at the data that has been provided to many members of this place by the Australian Banking Association, we can see that there are about $60 billion worth of loan deferrals that will expire at some time between September and October this year and then increasingly over the following six months. This is adding to the uncertainty visited upon business and the uncertainty around the future settings for jobseeker and JobKeeper, and I can only use this opportunity to encourage the government to remove that uncertainty and to ensure businesses have the basis on which they can do future planning.
After discussing with many businesses in my electorate, I know for a fact that they are currently in discussions with their banks about the forward aspects of their loan deferrals. One part of those discussions is going to involve questions like: 'What's your projected income? What are your projected salary costs? How are you going to meet your expected expenses? How does your loan deferral feed into that complex set of assessments?' So certainty is absolutely critical. We'd argue that we can't wait until July. The sooner the government gives certainty to business about important government programs such as JobKeeper and the sooner we get more certainty around the capacity of certain industries to move to a more normalised operating set of arrangements—whether that's international tourism, the arts and entertainment sector or the hospitality sector—the sooner these businesses can get back to trading as normal, employing Australians and creating wealth and livelihoods for all Australians. It is in all of our interests that we have greater certainty around these issues.
I will now turn to schedule 4, which amends the Taxation Administration Act to reduce the GDP adjustment factor in the PAYG system for 2020-21. This is another measure that will do something to help small businesses but it is a modest measure, I have to say. The GDP adjustment factor sets instalment estimates for small businesses, and adjusting the factor means that small businesses won't be beholden to the estimates that assume an economy is doing much better than it actually is. It's not going to do anything to change the ultimate amount of tax that small businesses owe, so over the forward estimates this has a net fiscal impact of zero. While that is sensible, it's not going to change the world for any small businesses. Great certainty around forward settings around government programs are going to have a much greater impact on that.
Schedule 6 fixes a technical area in boosting cash flow for employers that was a part of the Coronavirus Economic Response Package to ensure that the cash-flow boost can go to all small businesses that are employing staff. It fixes a drafting error that means certain businesses wouldn't be able to count personal service income which is akin to wages withheld when calculating the cash boost credit. It's an easy fix to a mistake that frankly is understandable, and Labor supports the fix.
Let's go back to schedule 2. Schedule 2 provides tax deductible gifts to a range of organisations, including, importantly, the Friends of Myall Creek Memorial. It is worth pausing for a moment, given the national and international conversation around these matters, to remind the House of what this organisation is about. In this place, at the heart of our nation, on the land of the Ngunawal people, it's important to note exactly what the Friends of Myall Creek Memorial are memorialising. On 10 June 1838, a group of Wirrayaraay people, a tribal clan of the Gamilaraay nation were camping peacefully on what had become Myall Creek Station. They had camped on the station for several weeks in the midst of the frontier wars. Gangs of marauding white stockmen were roaming the district, slaughtering any Aboriginal people they could find. The station stockman, one Charles Kilminister, had allowed them to camp on the land while accepting their assistance with the station's work. This was quite a common arrangement at the time, but this didn't create a safe haven.
Just before sunset on 10 June, the Wirrayaraay people were preparing for their evening meal when a gang of 11 stockmen rode into their camp. The people tried to flee, but the stockmen easily cornered them in the station's hut. The men, women and children were tied up and dragged off by the marauding gang. Once brought to a gully, the stockmen, joined by their theoretical protector, Charles Kilminister, murdered almost all of them immediately, keeping one woman alive for a few more days. Can you imagine the torture? The details of the massacre are graphic and horrific, as are too many stories from that period in our history.
The reason we remember this massacre, unlike so many others, is that this was one of the rare instances of settler violence where the white perpetrators were punished. A neighbouring settler, Frederick Foot, travelled all the way to Sydney to inform the New South Wales government of the massacre of the people. Against all the odds, the government acted. The 11 members of the gang of stockmen were brought to trial in the Supreme Court of New South Wales, and seven of them were ultimately found guilty. It shouldn't have been against the odds. Justice for Aboriginal Australians should not have been a surprise, but it was. All too often it still is.
The retelling of this history can be confronting for European Australians. For the descendants of the Aboriginal and Torres Strait Islander community it's as necessary as it is painful, because today they see the echo of that violence and dispossession in the refusal of this generation of Australians to acknowledge that this is a part of our history. In acknowledging that history, we give ourselves the capacity as a nation to move on. We have not closed the gap on Indigenous disadvantage. We have not closed the gap on Indigenous suffering. We have not closed the gap on Indigenous injustice. It is no answer to these claims to say, 'But, yes, there is violence inside Aboriginal communities as well.' Of course there is, and the leaders within those communities are doing their utmost to confront these issues, as we must confront our history and do all that we can to work with the leaders to ensure that we can move forward together to close these gaps. This is why it's worthy that we continue to remember these instances in our history, including the massacre at Myall Creek. I commend the bill to the House.
Thank you to the shadow minister for his contribution and support of the important measures contained in this bill. The Morrison government continues to back small business by extending the $150,000 instant asset write-off for six months to 31 December 2020. For most small businesses, indeed, for most Australians that will be seen by them as the centrepiece of the Treasury Laws Amendment (2020 Measures No. 3) Bill.
Schedule 1 of the bill, as has been noted by the shadow minister, makes important amendments to the International Monetary Agreements Act and will enable Australia to enter into loan agreements with the IMF, following changes to the way that they will be administering requests for that assistance.
Schedule 2 of the bill, as the shadow minister finished up with, includes a number of deductible gift recipients, including for, as I'm sure many members around the House know, Toy Libraries Australia, an important institution that covers this country from top to bottom; the Samuel Griffith Society; and, of course, the Friends of Myall Creek Memorial.
Schedule 3 of the bill amends the International Monetary Agreements Act to remove the requirement for the IMF to directly request assistance for a third country, as those requests are no longer made. This change will ensure that Australia can take its rightful place as a leader, particularly in the Pacific, in supporting third countries that are very close to us.
As I began at the outset, schedule 4 contains the extension to the $150,000 instant asset write-off to 31 December 2020 for businesses with aggregated turnover of less than $500 million. Eligible businesses will have, therefore, additional time to invest in assets to support their business as they begin emerging from the coronavirus, and we would absolutely encourage them to take those decisions as we move out of the worst of the pandemic. They should have the confidence to take those decisions, and this will assist them to do so.
Schedule 5 to the bill suspends the indexation of tax instalment amounts based on historical nominal GDP outcomes. It is self-evident that the economy and the impact of the coronavirus means that providing that cash-flow support through removing indexation will be so important to so many businesses, particularly small and medium enterprises. This will obviously better align the PAYG system with the current economic conditions.
Schedule 6 to the bill makes some very minor amendments to the cash-flow boost legislation, which seeks to clarify that the cash-flow boost credit includes amounts of personal services income that have been withheld. That is consistent with our understanding and policy and ensures that the legislation provides the commissioner with the ability to administer the cash-flow boost in that way. We thank the opposition for their support of the bill and we commend the bill to the House.
Question agreed to.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.