Michael Ronaldson (Victoria, Liberal Party) Share this | Hansard source

Could I first let the Opposition Deputy Whip know that there have been some brief discussions about me making some very short comments in line with the comments she made. In my view the majority report very aptly sums up what was a very interesting debate, and I thank Senator Murray for his comments earlier. It was a willing debate but a matter of great importance. With regard to withholding tax, I think the Senate should be aware that the Leader of the Opposition gave a speech in relation to this matter justifying what I think will end up being the opposition’s second reading amendment. In justifying his position he made a very interesting comment in his speech. Talking about Labor’s proposed changes, he said:

Greater investment would also flow into Australia for Australian funds managers to invest globally. For example, a Japanese resident could place their funds for management with an Australian funds manager for investment in an appropriate third country market.

Guess what? There is no tax. In the example that underpinned this issue, the rationale for attracting greater inflow of funds, in the speech of the Leader of the Opposition, there is no tax payable. How could the Leader of the Opposition in relation to a matter he views as important as this give an example of why we should adopt Labor’s position and attract greater inflows by a reduction when there is no tax payable? What extraordinary ignorance of the current situation. As one of my colleagues said, clearly no focus group was involved in this. So if it was not a focus group driving Labor’s policy, who was driving it? Who was advising the Leader of the Opposition to justify a policy change which had no substance? I do not think it was Senator Sherry. I hope it was not. I would be surprised if it were. The Leader of the Opposition, in his desperation to cobble something together for a budget reply speech or the outcome of it, has completely misunderstood the principle of withholding tax. If he cannot be trusted in relation to something as simple as this, how can the Australian people possibly trust him in relation to the running of the economy? This is a tax on domestically generated income. The example given by the Leader of the Opposition is not taxed, will not be taxed and has not been taxed in the past, so the justification for this policy change has fallen at the first hurdle.

It was also a very interesting debate with Treasury. What evidence did we hear during the 3½ to four hours of the committee hearing? We heard that, since 2004 when the commissioner effectively put in a process at 30 per cent, to my recollection, the inflow of funds went from $100 billion to $150 billion. This is a policy that apparently is stopping the inflow of funds into this country and yet it went from $100 billion to $150 billion.

The other issue from a policy point of view that the Labor Party has to address is: why are they prepared to effectively subsidise foreign treasuries to the detriment of the Australian taxpayer? What possible justification can the Australian Labor Party give to the Australian taxpayer for subsidising foreign treasuries to the detriment of the Australian taxpayer? The recommendation of the committee was that, when it suited this country when negotiating double taxation agreements, we could negotiate other rates. Did the US demand during our recent discussions with them that we reduce our rate? No, they did not. They did not demand that we reduce it from 30 to 15.

This is a sovereignty issue. This is a tax issue. The Australian Labor Party is asking this chamber and the Australian people to deny us the right to negotiate a reduction in this tax that suits this country and suits our domestic purposes. By moving this amendment, and by driving forward with the opposition leader’s false premise for a change, they are effectively asking Australian taxpayers to put their hands in their pockets and potentially provide more to foreign treasuries.

I am aware of the hour of the night, but as chair of that committee I did want to make some comments. I am sorry that I do not have another 12 or 15 minutes in which to do so. I thank the chamber most sincerely. There was a difficulty with the speakers list, but I thank the opposition for their indulgence in relation to this matter.