Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The International Tax Agreements Amendment Bill (No. 2) 2010 amends the International Tax Agreements Act 1953 to enact a second protocol amending the agreement between Australia and Singapore for the avoidance of double taxation and the prevention of fiscal evasion with respect to income tax. The opposition supports this bill, but I thought I should make the obvious point that we have a government that is not only addicted to spending but also addicted to new taxes and more taxes. I wish there was a bit more focus on avoiding all these tax increases, these tax hikes, within Australia as well as trying to avoid double taxation internationally, which of course is entirely commendable as something for the government to do.

We have had a government over the last three or four years which has been addicted to spending and has fed its addiction through new and increased taxes. This, of course, has also resulted in record debt and deficit. We had the biggest deficit ever in the last financial year, and we are looking at a deficit in excess of $40 billion this financial year alone. This is of significant concern to Australians because it leads to things like increased interest rates and increased cost-of-living pressures for people right across Australia, which all of us in this chamber should be very concerned about.

In recent weeks the Minister for Finance and Deregulation, Senator Wong, has been talking about the $83.6 billion worth of savings that were made by this government. But when this government talks about savings they are actually talking about tax increases as well as spending cuts. When you ask them how much of that $83.6 billion worth of spending cuts is true savings, they cannot tell you. They can confirm that ‘savings’, in government-speak, means both tax increases and spending cuts but they cannot tell you how much of the $83.6 billion in so-called savings is one or the other.

When it comes to taxation, we had the Henry tax review—a process that went over nearly two years—which was supposed to provide a road map for root-and-branch reform of our tax system and was supposed to deliver a fairer and simpler tax system. What have we ended up with? Madam Acting Deputy President, you guessed it—just another new tax, after the alcopops tax and after the luxury car tax increase and after the tax on the North West Shelf gas project and after a whole plethora of other new taxes and tax increases. When the government was facing yet another debt and deficit challenge, it came up with yet another tax. There were 138 recommendations in the Henry tax review. What did we get? Just another tax—a tax which was not thought through, which was not properly discussed with either industry or state and territory governments, whose royalties were supposed to be abolished, but which the government thought at the time was going to deliver $12 billion worth of additional revenue.

It was handled so badly that all hell broke loose. The government’s political fortunes went into a nosedive. It was in serious trouble. It went into damage control. The Prime Minister was discarded. The Treasurer that was responsible for the new tax got promoted. And here we are, still talking about this tax and still nobody knowing where all of the revenue estimates are coming from. As I mentioned in an earlier contribution, this is a very secretive government. This is a government that is not prepared to be open and transparent. It is not prepared to be accountable to the Australian people. We have a government which told us at budget time that the then so-called resource super profits tax would raise $12 billion and a couple of weeks later the Treasurer, Wayne Swan, came out and said, ‘Oops, it would have been $24 billion.’

Then we had a deal that was done in secret with the three biggest taxpayers subject to the tax, excluding everybody else. All of a sudden we were led to believe that this was going to raise $10½ billion. The government said: ‘We have changed about 100 assumptions, but we are not going to tell you how we have changed them. We just want to get this tax through. We want to get these big miners off our backs, but we want to preserve this questionable assertion that we can deliver an early surplus. So we cannot really tell you what those underlying assumptions are; otherwise, you would be able to scrutinise the work we have done.’

Whatever way you look at it, at the end of the day it is the government’s addiction to spending that drives its desperate pursuit of ever new taxes. I wish this government was as committed to avoiding tax increases and the need for further tax hikes in Australia as it is—appropriately—to avoiding double taxation through the International Tax Agreements Amendment Bill (No. 2) 2010. Australians would be better off, our economy would be better off and we would not be having some of these discussions that have been taking place for some time now. With those few words, the coalition supports this bill, but we do want to impress upon the government that what Australia needs is genuine tax reform—not just more Labor Party taxes, moving forward.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I thank Senator Cormann for his contribution and for the opposition’s support for the International Tax Agreements Amendment Bill (No. 2) 2002. The government is committed to combating cross-border tax evasion. This bill will give the force of law to the second protocol to the Australia-Singapore tax treaty, which will upgrade the exchange of information provisions in that treaty to the internationally agreed tax standard. The enhanced exchange of information provisions in the second protocol to the Singapore tax treaty will allow the tax authorities of both countries to exchange information on a wider range of taxes in a wider range of circumstances. This will discourage taxpayers from participating in abusive tax arrangements by increasing the probability of detection, making it harder for taxpayers to evade Australian tax. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.