Michael Ronaldson (Victoria, Liberal Party, Minister for Veterans’ Affairs) Share this | Hansard source

On behalf of Senator Cormann, I thank those senators who have contributed to this debate. I congratulate Senator Sinodinos on his speech today. He articulated very clearly the government's desire. He articulated very clearly why we believe the Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 2015 is so important. The Abbott government is determined to repair the budget and to change the outlook for Australian families and businesses. We want to make sure that future generations will enjoy the same high living standards we do. We want Australia's future to be one of prosperity and opportunity.

I turn now to schedule 1 of the bill, which relates to tax relief for certain mining arrangements. This bill keeps our promise to the resource sector. Limiting the immediate deductibility of mining rights and information will not impact farm-in farm-out arrangements or resource sector interest realignments. These arrangements will ensure genuine exploration activities and other legitimate restructuring arrangements can continue without any unintended tax consequence. This is important for both small explorers and larger scale oil and gas producers. This measure maintains the tax neutrality of a farm-in farm-out arrangement and provides tax rollover relief for an interest realignment in which the parties to a joint venture exchange interests in mining, quarrying or prospecting rights.

I now turn to schedule 2, which relates to increasing the effective life of in-house software. Schedule 2 to this bill will make a minor change to the depreciation treatment of software used by businesses. Taxpayers can claim a tax deduction for money spent on software. This includes packaged software bought off the shelf and money spent on developing software in-house. Currently these deductions are spread out over four years. This schedule increases this period to five years starting from 1 July 2015. This change will mean that the effective life of software for tax purposes better reflects the typical useful life of software for businesses. Taxpayers will still receive the same tax deduction in total; it will just be spread out over one extra year. This schedule will save $420 million over the four years to 2017-18, helping to repair the budget.

I now turn to schedule 3. This relates to income tax look-through treatment for instalment warrants and similar arrangements. Currently some uncertainty exists regarding the income tax treatment of instalment warrants and instalment receipts. Schedule 3 to this bill removes this uncertainty. Instalment warrants and receipts enable investors to purchase assets by paying in one or more instalments. For capital gains tax purposes it is a longstanding practice for taxpayers to ignore the instalment warrants and receipts arrangement. Uncertainty has arisen about whether this practice is supported by the tax law. Schedule 3 to this bill clarifies the income tax treatment and provides certainty for individuals, businesses and superannuation funds.

I now turn to schedule 4, which relates to multiple classes of shares. Schedule 4 to this bill will ensure that the company loss rules operate as intended. This measure is part of the backlog of announced but unenacted tax measures. A number of tests are used to check whether companies are able to carry losses forward. These tests relate to the company maintaining the same ownership and control and carrying on the same business from the time the loss was incurred. Currently there are some small issues with these tests, which means that they do not always operate as intended for some taxpayers. This stops some businesses from being able to carry forward their tax losses and to use them in future income years. Schedule 4 to this bill fixes these technical issues and will provide taxpayers with much needed certainty. Full details of each of the measures in this bill are contained in the explanatory memorandum.

In conclusion, the measures in this bill are part of the government's plan to repair the budget and build the foundations for a strong and growing economy. We are committed to repairing our finances so that future generations can enjoy the same standard of living we do. This bill will ensure that genuine exploration activities and other legitimate restructuring arrangements will continue without unintended tax consequences. The bill will also increase certainty for businesses and investors, reduce red tape and improve the integrity of the tax system. These changes are another important step in clearing the backlog of announced but unenacted taxation measures. I commend this bill to the chamber.

I want to take the opportunity to take up some of the Minister for Finance's words in relation to our plan to repair the budget and to build the foundation for a strong and growing economy. While one is no less important than the other, I want to focus on the second part, which is the foundation for a strong and growing economy.

I had the honour to represent the government in China last week for China's 70th anniversary commemorations for the end of the Second World War. This nation had similar commemorative events. On Thursday it will be my great honour to join a group of men who were at the tail end of the war. As you would be aware, Mr Acting Deputy President Back, the war in New Guinea and other parts continued even after the surrender was signed. These men were in New Guinea at the time. When I was in China, I met with the Vice President, Mr Li. We were talking about ChAFTA—our free trade agreement. When we were talking about that, I was reminded of the words of Senator Cormann about the need to build the foundations for a strong and growing economy.

On this side, we understand—as, I suspect, many on the other side understand; certainly, former members understand—that these sorts of agreements are absolutely fundamental if we are to build the foundations for a strong and growing economy. It just again exposes Mr Shorten and some of those opposite to claims of utter hypocrisy. On the one hand, they talk about Australia's future, but on the other hand they are prepared to pull apart the foundations for a strong and growing economy by not supporting ChAFTA. Everyone in this country—apart from some sections of the union movement—knows that this is a vital agreement for this nation's future. That is why the New South Wales Leader of the Opposition has now come out in support of it. That is why former trade minister Simon Crean has come out in support of it. That is why the Premier of Victoria, Mr Andrews, has come out in support of it. They presumably know that, if we are going to build the foundations for a strong and growing economy, this agreement is fundamental to us achieving that. It goes further than that. Mr Jay Weatherill, the Premier of South Australia, I understand now supports this agreement. Mr Bob Hawke, a former Labor Prime Minister, also appreciates that this will enable us to build the foundations for a strong and growing economy. Mr Martin Ferguson, a former resources minister, supports this agreement.

I have been watching those on the other side over the last two months. When the names of Crean and Ferguson are mentioned, their lips curl; I presume that they have done the same since Mr Hawke's comments. While you agree with the Labor Party, you are a party hero. When you disagree with Labor Party policy, when—having been a former ACTU president, Prime Minister or minister—you say to the Australian Labor Party, 'You are wrong, and, by doing what you are doing, you will diminish or destroy the foundations for a strong and growing economy,' all of a sudden, they do not want to know you. I say to Mr Crean, Mr Ferguson, former Prime Minister Hawke, Mr Foley, Mr Andrews, Mr Weatherill and others that have come out in support of this agreement that they know as well as I do that this agreement creates strong foundations for a prosperous economy, and the beneficiaries of that will be our children and grandchildren. This agreement is not about us. This agreement is about our kids and grandkids. This agreement is about jobs for our kids for the future. This agreement is about strong economic growth. This is about building those foundations for a strong and growing economy.

The CFMEU are dragging Mr Shorten around by the nose—presumably, with a ring through his nose. They are dragging him around, and they are calling the shots. Mr Shorten has to make a decision about whether he does support this nation's future, about whether he is going to do something that will help build those foundations for a strong and prosperous future and, indeed, about whether he is just going to continue kowtowing to the CFMEU. I saw a comment from Mr Ferguson in the Australian Financial Review on 5 September. He said words that should ring in the ears of every one of those opposite:

It's almost as if the CFMEU, in a sector that is benefiting from Chinese investment … wants to hold the rest of the nation in terms of lower paid jobs … for their short term political gain.

I repeat:

… for their short term political gain.

Is this just about the by-election in Canning? Is this about the opposition leader and the CFMEU making decisions clearly against the national interest, because of the Canning by-election? I am sure the Australian community hopes that it is not. I am sure the Australian community is equally as cynical as I and many others are about the motivation for this.

I invite those opposite to listen to what Minister Andrew Robb said on Insiders on Sunday morning. He put to bed once and for all this notion of Chinese workers being treated differently to any other person on a 457 visa. He put it absolutely to bed. He showed the disingenuous nature of what the CFMEU has been saying, aided and abetted by the Leader of the Opposition and those on his front bench. It has been said that what they have done is completely and utterly xenophobic. I have to say that it is hard to disagree with those sentiments. The Chinese government has not given any other nation preferential treatment in the way that we are receiving it. I am sure that that, in the main, is recognition of the trading relationship between our two nations, with China being our main trading partner. Conversely, I think we are their seventh largest trading partner. So this is recognition of a relationship built on trust, mutual understanding and an acknowledgement that, in equal parts, this is good for both our nations. That is why they are entering into this agreement and that is why we are entering into this agreement.

The CFMEU and the trade union movement have apparently spent some $12 million on an advertising campaign that is basically just lies. The CFMEU are better known for thuggery and intimidation than for having the best interests of the nation at heart. How can it be that they are driving the agenda of the Australian Labor Party? As I said before, Mr Ferguson has said that it is almost as if the CFMEU, in a sector that is benefiting from Chinese investment, want to hold the rest of the nation in lower paid jobs for the CFMEU's short-term political gain.

Again we have seen the Australian Labor Party abrogate its responsibility to Australian workers. This is no longer a party that supports Australian workers. This is no longer a party that will do those things required in the best interests of Australian workers. This is a party that is now completely and utterly beholden to the trade union movement. They have got you—those opposite—completely bound up. They are driving your agenda. They are calling the shots. They want to destroy Australian jobs. They want to hold this nation back and reduce the standard of living which this country is used to. I beg those opposite to listen to Bob Hawke, Martin Ferguson, Simon Crean, Luke Foley, Daniel Andrews, Jay Weatherill and others and pass this bill. I commend this bill to the Senate.

Question agreed to.

Bill read a second time.