Senate debates

Friday, 22 June 2012


Financial Framework Legislation Amendment Bill (No. 2) 2012; Second Reading

2:29 pm

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | Hansard source

And yes, as Senator Edwards points out, they are tuned out because they would rather not know about it. They simply do not want to know about it.

In that context, whilst we certainly support this legislation, we are very concerned that we continue to be vigilant about how this legislation transpires, given that some of the amendments here relate to the area of superannuation, under ComSuper, and that the legislation overall seeks to correct anomalies, add clarity and ensure consistency across government acts. It aims to ensure that legislation both is up to date and properly reflects actual and efficient financial practices, and it also seeks to ensure that financial arrangements are consistent with constitutional requirements. As the member for Goldstein said in the second reading debate:

It is tedious work, but it is important work.

And that is absolutely right. It is work that is painstaking; it needs to be done with great accuracy and care. So of course we are concerned about this government's ability to legislate it properly, implement it properly and then undertake it properly. We have to be very mindful of unintended consequences and equitable outcomes. You would think that that would be something you would simply keep an eye on if you trusted the government that was doing it, but people do not trust this government so it is something that we have to watch like hawks.

There are some examples given of how the changes will affect people, and I would like to mention some of these in the time that remains to me. I will be curtailing my remarks because I know that, even with me speaking briefly, there are at least three other speakers who will not have the opportunity to speak. So I will be cutting my remarks short, but I would just like to tell you about some of the examples that have been given in the explanatory memorandum of the types of situations that might arise. One of the examples is of a discharge of a Commonwealth liability. It says:

Kath is the recipient of a $100 recoverable advance in the 2012-13 year as a result of an identified error in an interest on overpayment calculation. She lodges her income tax return in July 2013—

and is entitled to a refund of $500. The tax office then says, 'Ah, but Kath owes us $100,' and she receives a refund of $400—certainly a very efficient administrative way of going about things if it works and if Kath, the woman in the example here, is aware that that is what is going to happen. If she is not aware that that is going to happen then she may be left in a difficult situation when she spends what she expects to be her tax refund and receives less.

One of the examples that concern me relates to Defence Force veterans, widows and the like. Under this legislation, it has been made simpler for the government to seek to reclaim payments that are made to recipients in the time between when the recipient dies and when the government body is notified of that recipient's death. So we have a time when payments are made and when the person who is to be paid is no longer alive. I would be very, very concerned about how tactfully and sensitively that is handled. Of course it is reasonable for the government to reclaim payments that are made to people who no longer exist, but it is such a difficult and fraught area for people around them, who in most cases may also be recipients of benefits themselves. So this would certainly be an area that must be done very, very sensitively.

The last case I want to talk about is the recoverable advances that are made in conjunction with other payments. The example given here is that in 2009 a batch of about 228,000 co-contribution payments that were valued, all up, at about $43 million had been processed with an error in the calculation of the interest attached to 1,165 of those payments. The error was worth about $17,000. Of course, within that whole framework it would cost more to try to get the money to fix the error than to allow the error to stand and therefore for the ATO to receive about $17,000 less than it might otherwise have received. Even though it would have been more efficient and effective to allow the payments to proceed, without the recoverable advance legislation that is now going through there was a risk that the ATO would in fact be non-compliant with section 83 of the Constitution. So the proposed changes here would let the tax commissioner allow payments like that to proceed, with the excess amount then being treated as a recoverable advance if it were worthwhile to proceed with that on that basis.

Whilst, as I said, the coalition supports this legislation in principle, we continue to be concerned, and the Australian people are concerned, about this government's ability to implement its legislation in a way that is in the public interest. So I ask that vigilance be completely maintained on this.


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