Senate debates

Tuesday, 18 September 2007

Tax Laws Amendment (2007 Measures No. 4) Bill 2007; Taxation (Trustee Beneficiary Non-Disclosure Tax) Bill (No. 1) 2007; Taxation (Trustee Beneficiary Non-Disclosure Tax) Bill (No. 2) 2007; Tax Laws Amendment (2007 Measures No. 5) Bill 2007

In Committee

5:38 pm

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

by leave—I move amendments (1) and (2) on sheet 5328, revised No. 2, together:

(1)    Schedule 5, page 98 (after line 17), before item 27, insert:

26A  Subsection 10(2)

Insert:

de facto relationship means a relationship between two people living together as a couple on a genuine domestic basis, where the relationship is not a marital relationship:

             (a)    in determining whether two people are in a de facto relationship, the circumstances of the relationship must be considered as a whole. Without limiting the generality of this paragraph, those circumstances may include:

                   (i)    the length of their relationship;

                  (ii)    how long and under what circumstances they have lived together;

                 (iii)    whether there is a sexual relationship between them;

                 (iv)    their degree of financial dependence or interdependence, and any arrangements for financial support, between or by them;

                  (v)    the ownership, use and acquisition of their property, including any property that they own individually;

                 (vi)    their degree of mutual commitment to a shared life;

                (vii)    whether they mutually care for and support children;

               (viii)    the performance of household duties;

                  (ix)    the reputation, and public aspects, of the relationship between them;

                   (x)    the existence of a statutory declaration signed by both persons stating that they regard themselves to be in a de facto relationship with the other person;

             (b)    a de facto relationship may be between two people of the same gender.

Note:   A person in a marital relationship is taken to be legally married - see subsection 8A(2) of the Superannuation Act 1976.

(2)    Schedule 7, page 112 (after line 26), after item 65, insert:

65A  Subsection 995-1

Insert:

                 beneficiary relationshipfor the purposes of this Act, a person had a beneficiary relationship with another person at a particular time if the person has a marital or de facto relationship with the person and ordinarily lived with that other person on a permanent and bona fide domestic basis at that time.

65B  Subsection 995-1(1)

Insert:

de facto relationship means a relationship between two people living together as a couple on a genuine domestic basis, where the relationship is not a marital relationship:

             (a)    in determining whether two people are in a de facto relationship, the circumstances of the relationship must be considered as a whole. Without limiting the generality of this paragraph, those circumstances may include:

                   (i)    the length of their relationship;

                  (ii)    how long and under what circumstances they have lived together;

                 (iii)    whether there is a sexual relationship between them;

                 (iv)    their degree of financial dependence or interdependence, and any arrangements for financial support, between or by them;

                  (v)    the ownership, use and acquisition of their property, including any property that they own individually;

                 (vi)    their degree of mutual commitment to a shared life;

                (vii)    whether they mutually care for and support children;

               (viii)    the performance of household duties;

                  (ix)    the reputation, and public aspects, of the relationship between them;

                   (x)    the existence of a statutory declaration signed by both persons stating that they regard themselves to be in a de facto relationship with the other person;

             (b)    a de facto relationship may be between two people of the same gender;

             (c)    to avoid doubt, two people may still be in a de facto relationship if they are living apart from each other on a temporary basis.

65C  Subsection 995-1(1)

At the end of the definition ofspouse, add “and includes a person who is in a beneficiary relationship”.

I urge the Senate to accept these amendments. The amendments I refer to arise directly from, and are closely aligned to, the precise and detailed recommendations of the May 2007 Human Rights and Equal Opportunity Commission report Same-sex: same entitlements. That was a national inquiry into discrimination against people in same-sex relationships—their financial and work related entitlements and benefits. This is the first tax bill that I could put these amendments to.

I draw the attention of the chamber to appendix 1 of that report, which lists 58 acts that need amending to comply with the commission’s finding that inequitable and unjust discrimination applies to tens of thousands of Australians who are in same-sex relationships. I draw the Senate’s attention to the chapter headed ‘Summary of findings and recommendations’—that is chapter 18, on page 371. Within chapter 18, on page 384, you will find a list of items used to determine whether two people are in a de facto relationship and the circumstances taken into account to determine that relationship. Those are replicated in my amendment. Discrimination under tax laws is also described in chapter 18 under ‘Summary of findings and recommendations’. It is described under (c) on page 377: ‘Discrimination under tax laws’.

I very much doubt that senators have the report readily to hand, so I will read the section about the discrimination that exists—the homophobic discrimination, might I say—the unjust, totally unwarranted, immoral, disgraceful discrimination that exists under our tax laws against same-sex couples or families. I draw the attention of the chamber to the fact that many people of same-sex persuasion do, in fact, have families—children and, of course, dependants. I will read section (c). Do not despair; it is not so long that it will take forever. The section is headed ‘Discrimination under tax laws’ and says:

The Inquiry finds that federal tax laws discriminate against same-sex couples or families in the following ways:

  • A same-sex partner cannot access the dependent spouse tax offset available to an opposite-sex partner.
  • A same-sex partner cannot access the tax offset for a partner’s parent available to an opposite-sex partner.
  • A same-sex partner, lesbian co-mother or gay co-father cannot access the housekeeper tax offset available to an opposite-sex partner, birth mother or birth father.
  • A lesbian co-mother or gay co-father cannot access the child-housekeeper tax offset available to a birth mother or birth father.
  • A lesbian co-mother or gay co-father cannot access the invalid relative tax offset available to a birth mother or birth father.
  • A taxpayer in a same-sex couple cannot access the higher rate of overseas forces tax offset available to an opposite-sex couple.
  • A taxpayer in a same-sex couple cannot access the higher rate of zone tax offset available to an opposite-sex couple.
  • A US defence force same-sex couple cannot access tax exemptions available to an opposite-sex couple.
  • A lesbian co-mother or gay co-father cannot assert a primary entitlement to the baby bonus.
  • A same-sex partner of a person eligible for the child care tax rebate cannot access the rebate in the same way as an opposite-sex partner. And a person eligible for the child care tax rebate cannot transfer the unused value of the rebate to his or her same-sex partner.
  • A same-sex couple must spend more than an opposite-sex couple to qualify for the medical expenses tax offset.
  • A same-sex couple may pay a higher Medicare levy and Medicare levy surcharge than an opposite-sex couple.
  • A same-sex partner cannot access the same capital gains tax concessions available to an opposite-sex couple.
  • A same-sex couple transferring property to a child (or trustee) on family breakdown will be taxed at the top marginal rate, unlike an opposite-sex couple.
  • A same-sex partner must pay income tax on child maintenance payments received from a former partner, unlike an opposite-sex partner.
  • A same-sex partner is not eligible for the same fringe benefit tax exemptions available to an opposite-sex partner.

Chapter 8 of the report provides much more detail about these and other tax entitlements. This kind of discrimination is not about marital relationships; this is about relationships between people who live together, who have an enduring relationship, which is determined on a very exact basis, and who are not allowed the same tax entitlements as other Australians living in the same circumstances. It is an abomination. It is unacceptable. Now that this report is out, there is no excuse for it not being addressed. There is no political advantage in this to anyone refusing or opposing this. There is just a moral vacuum, a moral failure. I have brought these amendments forward because I think it is time the government addressed them. I do hope that the amendments, which I have designed to comply as close as I can with HREOC’s recommendations, find acceptance.

Through you, Madam Temporary Chairman: I know, Minister, that the amendments are likely not to be perfect, but the government could always accept them and improve them in the House and then send them back for the agreement of the Senate. I would urge the Senate to accept these amendments and approve them.

5:47 pm

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

This is not the first occasion in the Senate or, indeed, in the House of Representatives where we have been debating the removal of discrimination as it applies to superannuation provisions in regard to same-sex couples. It is not the first time and, Senator Murray, I have forgotten how many times we have spoken on this matter in the Senate. The Australian Democrats—and sometimes the Greens, I have to acknowledge—and the Labor Party invariably move amendments time and time again, either in committee or in a second reading debate, that the government remove the discrimination in respect to superannuation provisions as they apply to same-sex couples.

Senator Murray rightly identified a moral failing on the part of the government, but it is actually a double moral failing, because I was here in this Senate chamber about four years ago—Senator Murray would recall—when Senator Cherry, as the superannuation spokesperson for the Australian Democrats, received a written commitment from the Prime Minister to remove the discrimination in respect of same-sex couples. A written communication was tabled here in the Senate chamber. It was on the superannuation choice legislation. I am sure Senator Murray would recall this.

So we have a double moral failure. We had the Prime Minister of this country—typical tricky Mr Howard at his tricky best, or worst, frankly—some four years ago giving a written letter of commitment to the Senate chamber to remove the discrimination in respect to same-sex couples and superannuation. That was four years ago. And where are we today? It still has not happened. We have a very tricky Prime Minister—who is short-term and who wants a bit of legislation, in that case on superannuation choice, passed—and he gave a written commitment. I think we had Senator Coonan, who was the Assistant Treasurer at the time, brandishing this letter from the Prime Minister.

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

She supports him in this.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

She may support it, Senator Murray. However, the Prime Minister, Mr Howard, in a serious moral failure, signs up in writing and then fails to deliver. There was an intriguing leak on a cabinet discussion in the Financial Review about three weeks ago. It was intriguing because rarely does a cabinet leak occur. It is a very unusual circumstance and it is very rare indeed for cabinet to leak and for a full-blown report on the issue to be given in the Financial Review. It was a report on the discussion that took place in cabinet about this issue. Apparently, cabinet was split down the middle. As reported in the Financial Review, there was a fierce discussion, they were unable to reach agreement and it was left to the Prime Minister to make the call. But the Prime Minister made the call on this issue four years ago.

I will come back to that Financial Review report shortly. I noticed in some media shots the Prime Minister attending community meetings and addressing questions from the floor. When he was asked by someone in the audience whether he would remove the discrimination in respect of same-sex couples, he very bluntly said, ‘No.’

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

Duplicity!

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

So we had the Prime Minister giving a written commitment four years ago and recently—I do not know the precise date, but it was recent—saying that he would not remove it. It is duplicitous—that is right, Senator Carr. He gave a promise four years ago, a tricky promise to get a bit of legislation through. Senator Murray, I have to admonish you. I warned Senator Cherry at the time: it was a short-term tricky promise—

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

We have trusting natures!

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Well, they got the super choice legislation through.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

You are dealing with a clever politician, though.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

We are dealing with Mr Howard here, the Prime Minister of Australia, giving a commitment four years ago and then still failing to deliver today. Let us come back to the Financial Review leak. We had a very detailed report in the Financial Review of the debate that took place in cabinet no less—which is very rare. I think I can count on one hand the number of times cabinet discussions have been leaked in the past 11-odd years.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

Was there a police inquiry into it?

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Senator Carr quite incorrectly interjects, but he quite rightly makes the point: has a police inquiry been called into this leak to the Financial Review of the cabinet discussion on the removal of discrimination as it applies to same-sex couples and superannuation? Parliamentary Secretary Colbeck, I would like to know whether in fact there has been a police inquiry—we can deal with this in the committee stage—initiated into that leak of a detailed cabinet discussion.

But I will point the finger because we know who leaked it. Mr Turnbull leaked it. He is the one who leaked that cabinet discussion because he is under electoral pressure. I can see some smiles on the advisers’ faces—they know I am right. I hope this police investigation is being undertaken, because Mr Turnbull is playing both sides of the street. He has a part in collective cabinet responsibility and has to follow the lead of the Prime Minister, who will not deliver on the promise that he made four years ago. Mr Turnbull leaked that discussion to the Financial Review because he wants to ensure that his views in that cabinet discussion were communicated to the gay community in his own electorate. That is what it was all about. We would like to know what has happened with the police investigation into that cabinet discussion.

Here we are, four years later, and the government still has not delivered on its promise, solemnly given in writing by the Prime Minister. How often are various people in the community going to be misled by this tricky manoeuvring of the Prime Minister? I just hope that the same-sex community in Australia really do understand at the next election just how tricky the Prime Minister has been on this issue. He has been very tricky indeed. I also hope they realise just how tricky Mr Turnbull was in leaking those cabinet discussions to the Financial Review. We know that he was the one responsible.

Labor will be supporting the amendments moved by the Democrats. It is Labor policy to remove the discrimination in the area. Superannuation is a person’s own money. It is their savings. Why on earth the government continues to maintain discrimination in this area is just beyond me. It is a person’s own money—their own superannuation savings.

I have two specific questions to the parliamentary secretary. Has a police investigation been called into that leak that was detailed in the Financial Review? Where is the police investigation up to?

Photo of Julian McGauranJulian McGauran (Victoria, National Party) Share this | | Hansard source

No documents were leaked.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Senator McGauran!

Photo of Julian McGauranJulian McGauran (Victoria, National Party) Share this | | Hansard source

It was just an assertion in the Financial Review of a conversation.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

I hope all that is on the record.

Photo of Claire MooreClaire Moore (Queensland, Australian Labor Party) Share this | | Hansard source

Senator McGauran, you have had the opportunity to take part in the conversation.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Thank you, Madam Chair, but I must say I am somewhat taken aback at the intervention of Senator McGauran. There is nothing more important to cabinet solidarity than the preservation of confidentiality in cabinet discussions. It was splashed all over the Financial Review, Senator McGauran. There were full details about who said what on same-sex couples and superannuation. We have no doubt it was Minister Turnbull who leaked it.

The Temporary Chairman:

Senator Sherry, your remarks should be addressed through the chair.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Yes, sorry. What is the status of the police investigation? Has a police investigation been called into that leaking of confidential cabinet discussions?

Photo of Julian McGauranJulian McGauran (Victoria, National Party) Share this | | Hansard source

That is a reflection on Turnbull.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

It is. It is true, Senator McGauran. He leaked it.

Photo of Julian McGauranJulian McGauran (Victoria, National Party) Share this | | Hansard source

You ought to withdraw that.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

I am not withdrawing it. I will await the outcome of the police investigation.

Photo of Julian McGauranJulian McGauran (Victoria, National Party) Share this | | Hansard source

I raise a point of order, Madam Chair. Senator Sherry agrees with me that that is a reflection on Senator Turnbull—

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Senator Turnbull!

Photo of Julian McGauranJulian McGauran (Victoria, National Party) Share this | | Hansard source

Yes, Mr Turnbull. I ask the senator to withdraw that comment. It is a serious accusation he makes about him.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

I withdraw it. I am magnanimous. But I look forward to an update from the parliamentary secretary about the police investigation as to who leaked that report. Just for Senator McGauran’s edification—

Photo of Julian McGauranJulian McGauran (Victoria, National Party) Share this | | Hansard source

There was no report leaked.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Turn it up!

Photo of Julian McGauranJulian McGauran (Victoria, National Party) Share this | | Hansard source

The Financial Review wrote up a conversation.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

There was a full report in the Financial Review on who said what about it. Turn it up! I can guarantee this committee that the Prime Minister would have been absolutely furious that someone like Mr Turnbull could have leaked it for his own political advantage in his own seat. I hope the Federal Police were called in to identify the perpetrator.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

It was Mr Turnbull.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

I do not know. We will wait to hear from the parliamentary secretary about who leaked it. We would like an update on the police investigation into that leak.

Secondly, I notice officials from the ATO are here. Could the parliamentary secretary give us an update on the estimated number of individuals identified by the ATO, at this point in time, for whom tax file numbers cannot be identified? I think the last time I asked about this in estimates around 90 per cent were identified for the purposes of the penalty tax. What is the update on the approximate percentage identified? They are the two questions to which I would like a response from the parliamentary secretary.

5:59 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

The government will not be supporting the amendments, although the government has publicly indicated that it is in favour of removing discrimination against people in interdependency relationships but is not limiting it to same-sex relationships. I think I have said before in the chamber that we do not confine it to same-sex relationships; we look at it in a broader sense in relation to interdependency relationships.

The report of the Human Rights and Equal Opportunity Commission was only handed down on 21 June this year and, as Senator Murray indicated, there are 58 acts to change in respect of the piece of legislation. Turning to Senator Sherry’s questions, there are no officials here who can give us an update on the percentage of tax file numbers that are identifiable, so I will have to take that on notice. I am not sure that the other question warrants a response but, as far as I am aware, there are no investigations into the issue that he raised.

6:00 pm

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Temporary Chairman Lightfoot, you unfortunately missed the earlier exchange, because this is a very serious matter: a member of cabinet leaked to the Financial Review details of discussions on the same-sex couple.

Photo of Ross LightfootRoss Lightfoot (WA, Liberal Party) Share this | | Hansard source

This is an allegation, is it?

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

No, it is not an allegation; it is in the Financial Review. It is true. It happened. Senator Colbeck thinks this is quite a flippant matter, but any time any documents or discussions are leaked from cabinet there is a Federal Police investigation. Could you check with the officials to see whether or not a Federal Police investigation has been initiated into that leak and subsequent report in the Financial Review?

The Temporary Chairman:

I am a bit confused, Senator Sherry: are you asking me to check or the parliamentary secretary?

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

No, I am asking the parliamentary secretary.

6:01 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

As I indicated, I am not aware of any investigations in respect of that matter.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

The officials are here. Could he check with the officials to see whether or not a Federal Police investigation has been initiated—yes or no.

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Senator Sherry, my response was accurate. There are no investigations in respect of the matter you raised.

6:02 pm

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

I am astounded because, as I said earlier, it is very rare for confidential discussions in cabinet to be leaked to the media. I cannot recall more than a handful of occasions in this government’s 11½ long years in office. I find it extraordinary that there was no police investigation into this matter. But we had a discussion earlier and we have a fair idea who the perpetrator was. On the amendments before us, it is more than disappointing that here we are four years on and the government still has not met the commitment it gave in writing four years ago.

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

And after the major report—

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

And, of course, that was after the major HREOC report that Senator Murray referred to. But we did not need the major report. We had the commitment in writing from the Prime Minister, and he has failed to deliver. Labor will be supporting the amendments moved by Senator Murray.

Photo of John HoggJohn Hogg (Queensland, Deputy-President) Share this | | Hansard source

The question is that Democrats amendments (1) and (2) on sheet 5328, revised, be agreed to.

Question put.

Bill agreed to.

TAXATION (TRUSTEE BENEFICIARY NON-DISCLOSURE TAX) BILL (NO. 1) 2007

Bill—by leave—taken as a whole.

Bill agreed to.

TAXATION (TRUSTEE BENEFICIARY NON-DISCLOSURE TAX) BILL (NO. 2) 2007

Bill—by leave—taken as a whole.

Bill agreed to.

TAX LAWS AMENDMENT (2007 MEASURES NO. 5) BILL 2007

Bill—by leave—taken as a whole.

6:13 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

I table a supplementary explanatory memorandum relating to the government’s request for amendments and amendment to be moved to this bill. The memorandum was circulated in the chamber today. I move government amendment (1) on sheet QG450:

(1)    Schedule 10, item 1, page 161 (after line 16), at the end of Division 376, add:

376-275 Review in relation to certain production levels

                 The Minister must, before the end of 12 months after the commencement of this Division, initiate a review of the effect of this Division in relation to levels of production by the Australian independent production sector compared to levels of production by Australian television broadcasters.

This amendment addresses a recommendation of the Senate Standing Committee on Economics to establish a review of the effect of the film production offset to compare levels of production by the Australian independent production sector to production levels of Australian television broadcasters. The government accepts the evidence presented and will act on the committee’s recommendation to ensure legislatively that this offset is reviewed in 12 months time. Full details of the changes are contained and outlined in the supplementary explanatory memorandum that has been tabled.

6:15 pm

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Labor will be supporting the amendment to schedule 10. It allows animated programs of 15 minutes to be eligible for the producer rebate. Without this amendment an animated program would have to be at least 30 minutes in length to be eligible for the offset. So Labor supports the amendment. In concluding my remarks, I do note that we are to have yet another review. I started to count the number of reviews this government has had since the last election, and we are up into the hundreds. Senator McGauran is smiling. There is a bit of an issue being made by the government at the moment—

Photo of Julian McGauranJulian McGauran (Victoria, National Party) Share this | | Hansard source

You just plucked a figure out of the air.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Sit down and count them, Senator McGauran. There have been hundreds of reviews and quangos set up by this government since the last election—hundreds of them. And they have the gall to have a shot at us for making a range of commitments in respect of reviews and investigations if there is a Labor government elected. I just make the point that, when it comes to having a track record on reviews, quangos and all these new investigations, this government leaves the Labor Party’s commitments for dead. We will support the amendment.

6:16 pm

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

I have some questions on schedules associated with this bill. Would now be an appropriate time to ask them?

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

I turn to schedule 11. I ask if there are officers here who can assist me with inquiries as to the data source that Treasury used to estimate the amount of R&D being undertaken in Australia by multinational companies.

6:17 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

As Senator Carr would be aware and has previously been told with respect to his questions on notice at Senate estimates, it has been a longstanding practice that the government does not provide a breakdown of costings.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

The costing equates to $222 million in eligible expenditure each year. How was that $222 million expenditure calculated? How many international firms have subsidiaries in Australia that could potentially benefit from this change? How would that change if they chose to increase their spending?

6:18 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Senator Carr, I take that essentially to be the same question in a different form so I will essentially give you the same answer. But if you want to persist with the question, I am quite happy to take it on notice.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

Thank you very much. I would ask that the minister take it on notice. I do note that the departmental officials do not seem to be able to answer any of these questions. How much R&D expenditure do these international companies currently account for? Can you tell me that?

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

I will take that on notice as well.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

The costings for the proposal indicate that the increase in spending by international companies will be the same for every year—that is, $222 million. Can you explain to the committee what allowances were made for behavioural changes by multinational companies in response to this measure?

6:19 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Again, Senator Carr, I will have to take that question on notice.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

How did Treasury manage to come up with the estimates of the take-up rate on R&D expenditure and the cost to the budget?

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

I do not know that I can provide you with—or if it is appropriate to provide you with—the methodology of the calculation.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

On what basis do you refuse to provide that information?

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Senator Carr, I do not know that I am refusing to provide you with information. You are asking me for a methodology of calculation. The Treasury obviously has a methodology of working it out but, as I have said to you previously, it has been a longstanding practice of government not to provide a breakdown of costings. I think that I have covered that matter previously.

6:20 pm

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

What assumptions were made about the inducement effect of this measure?

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

I will take that question on notice.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

Furthermore, what assumptions were made about the time it would take for this particular measure to have its full effect? Was there to be an immediate take-up effect or a lag effect?

6:21 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

I will take that question on notice.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

What parameters were calculated? Was there any measure undertaken by Treasury to decide on which modelling outcomes best represent the likely outcome affecting behavioural change of this particular measure?

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Could you repeat the question?

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

What I asked was: what were the parameters of the modelling undertaken by Treasury to calculate what would be the best representation of the likely outcome of these particular measures before the committee?

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Again, I will have to take that question on notice.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

It is quite apparent that the government has taken all those questions on notice. They are not able to answer these rudimentary questions about a measure for which they have allocated $500 million on a flatline assumption of $50 million a year for 10 years—on the assumption that, for all the international firms in this country, every year for the next 10 years $222 million will be calculated as the basis of the claims against expenditure. What an extraordinary proposition to put to this parliament. That is what is being said here, and there can be no explanation given by the government for the basis on which those calculations have been made.

I did not in fact expect any different. It is quite apparent that this is a matter that has been pulled out of the air. These figures have been pulled out of the air and they have been calculated on a 10-year flatline assumption. The government have never been able to get these calculations right; yet they are only too happy to point the finger at others who seek to establish a policy parameter in this area. It is quite apparent that the government is not able to answer these fundamental questions.

I turn to schedule 12. This is a matter to establish a new innovation board. The minister announced the chair and the deputy chair, but it has not been publicly stated how the rest of the 13 positions will be filled. How many board vacancies will be created by this measure?

6:23 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

I am sorry but I am going to have to take that question on notice.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

These are simple, straightforward questions. How many vacancies are created by this action by this government? There are officials here, but you are telling me that you cannot give me an answer to that. What will the process be for filling the vacancies on the Innovation Australia board?

6:24 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Unfortunately, there are no officials here from the Department of Industry, Tourism and Resources, which is looking after the board. I am going to have to take that question on notice.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

Mr Parliamentary Secretary, how did you allow a situation to arise where you do not have appropriate officials in the chamber to answer simple questions such as these? Why was it not your responsibility to ensure that officers were here to answer these questions?

The Temporary Chairman:

Senator Carr, would you be kind enough to ask your questions through the chair.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

I think the parliamentary secretary heard the question. I ask him again: how is it that—

The Temporary Chairman:

Senator Carr, I will disallow that question unless you ask it through the chair. That is all I am asking for.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

Mr Temporary Chairman, it is quite clear that the government is not able to do fundamental tasks that are required of an executive. These are simple questions. I ask again—through you, Mr Temporary Chairman—Mr Parliamentary Secretary, how did you allow a situation to develop where you do not have officers here to answer these basic questions?

The Temporary Chairman:

I have not allowed that question but you can answer if you wish to, Senator Colbeck.

6:25 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Thanks, Mr Temporary Chairman. I am not sure it is a case of whether or not I wish to answer; I think it is reasonable that I respond to Senator Carr. I am disappointed that I am not able to provide answers to the questions that he is asking. I think he is asking reasonable questions of the government and I am not happy that I am not able to give him that advice. I put that on the table as part of the debate. My action in taking the questions on notice is quite genuine. It is so that I can provide him with the information.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | | Hansard source

I take the parliamentary secretary’s answer in the spirit in which it has been offered. I think it would also be appropriate for him to point out that there are other more senior people in the government who should have made sure that officers were here to answer these basic questions. Given that, I ask him this: in the event that these appointments are made immediately, what will be the length of time for these appointments? Parliamentary Secretary, would you be prepared to take that question on notice in view of the circumstances?

The very last section of the bill states that the appointments of members of the committee under section 22 of the industry R&D act are revoked when this new act takes effect. Firstly, there are currently nine committees operating under the industry R&D board act. Is it the government’s intention to immediately re-establish equivalent committees under the new act? Secondly, does the government intend to establish any additional committees relating to the venture capital responsibilities? Thirdly, what is the process for the establishment of new committees? Fourthly, what is the process for appointing members to those committees and what would be the length of those appointments?

6:27 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

I undertake to take those questions back to the Minister for Industry, Tourism and Resources and get the answers to you as soon as I can.

Question agreed to.

I move:

That the House of Representatives be requested to make the following amendment:

(2)    Schedule 10, item 1, page 137 (lines 17 and 18), omit subparagraph 376-65(5)(b)(ii), substitute:

(ii)
each episode of the series is at least one half of a commercial hour in duration, except where the film is predominantly made using cell, stop motion, digital or other animation, in which case each episode is at least one quarter of a commercial hour in duration; and

Statement of reasons: why certain amendments should be moved as requests

Section 53 of the Constitution is as follows:

Powers of the Houses in respect of legislation

53. Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law.

The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government:.

The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people.

The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modifications.

Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws.

Amendments (1) and (2)

The effect of each of these amendments is to increase the number of films that may be eligible for a refundable tax offset under Division 3 76 of the Income Tax Assessment Act 1997. This will have the effect of reducing tax payable by claimants of the offset, and may result in refunds of tax to some claimants. The appropriation of any such refunded amounts is made by section 16 of the Taxation Administration Act 1953. The amendments are covered by section 53 because they potentially increase those appropriations.

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000

Amendments (1) and (2)

The Senate has long followed the practice that it should treat as requests amendments which would result in increased expenditure under a standing appropriation.

On the basis that these amendments would result in increased expenditure under the standing appropriation in the Taxation Administration Act 1953, it is in accordance with the precedents of the Senate that these amendments be moved as requests.

6:28 pm

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Labor supports the amendment.

Question agreed to.

6:29 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

I move:

That the House of Representatives be requested to make the following amendment:

(1)    Schedule 10, item 1, page 137 (lines 10 and 11), omit subparagraph 376-65(5)(a)(ii), substitute:

        (ii)    each episode of the series is at least one half of a commercial hour in duration, except where the film is predominantly made using cell, stop motion, digital or other animation, in which case each episode is at least one quarter of a commercial hour in duration; and

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

Labor supports the amendment.

Question agreed to.

Bill, as amended, agreed to subject to requests.

Tax Laws Amendment (2007 Measures No. 4) Bill 2007 reported without amendments; Taxation (Trustee Beneficiary Non-disclosure Tax) Bill (No. 1) 2007 and Taxation (Trustee Beneficiary Non-disclosure Tax) Bill (No. 2) 2007 reported without requests for amendments; Tax Laws Amendment (2007 Measures No. 5) Bill 2007 to be reported with an amendment and requests for amendments; report adopted.

Photo of John HoggJohn Hogg (Queensland, Deputy-President) Share this | | Hansard source

The committee has considered Tax Laws Amendment (2007 Measures No. 4) Bill 2007 and three related bills and requests, and agreed to the Tax Laws Amendment (2007 Measures No. 5) Bill 2007 with an amendment and agreed to the other bills without amendment.

Bill reported with amendment and requests; report adopted.