Wednesday, 17 June 2020
Treasury Laws Amendment (2020 Measures No. 2) Bill 2020; Second Reading
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
The speech read as follows—
This omnibus Bill includes a series of tax measures including a measure to amend the hybrid mismatch rules, continuing the Morrison Government's work on combating multinational tax avoidance, while ensuring that compliance burdens are kept to a minimum. The Bill also allows employers to report information already required for child support under Single Touch Payroll, further streamlining employer reporting to Government. The Bill establishes a deductible gift recipient general category for men's sheds and women's sheds and includes a number of other organisations on the list of deductible gift recipients. The Bill also includes a measure providing funding for Australia's continued financial support of the World Bank. Finally, this Bill will also allow the ATO to share critical JobKeeper-related information with the Fair Work Commission and the Fair Work Ombudsman to ensure employers comply with the scheme.
Schedule 1 to the Bill amends the Income Tax Assessment Act1997, continuing the Government's commitment to tackling multinational tax avoidance, by improving Australia's hybrid mismatch rules, which arebased on one of 15 Actions from the OECD/G20 Base Erosion and Profit Shifting Project.
The hybrid mismatch rules are designed to prevent multinational companies from exploiting differences in the tax treatment of instruments or entities between jurisdictions, which enable those companies to defer or reduce tax.
The amendments in this Bill will ensure that the hybrid mismatch rules operate as intended and help to ensure the integrity of Australia's income tax laws and their application to multinational enterprises. The amendments achieve this by making technical changes to the rules which clarify their operation and prevent the rules from applying in inappropriate circumstances.
Schedule 2 to the Bill amends the Taxation Administration Act 1953 to broaden the information employers can voluntarily report under the Single Touch Payroll rules, to include employer withholding of child support deductions and child support garnishee amounts. This measure will further streamline employer reporting to Government demonstrating the efficiency gains for employers provided by Single Touch Payroll.
Schedule 3 to the Bill amends the Income Tax Assessment Act1997 to establish a deductible gift recipient (DGR) general category for men's sheds and women's sheds. This will enable sheds to more easily access DGR status from 1 July 2020, which in turn, helps them attract public financial support for their activities. The Morrison Government fully supports the important work undertaken by men's sheds and women's sheds.
Donors to DGR-endorsed sheds can claim an income tax deduction for donations of $2 or more. The DGR tax arrangements are intended to encourage philanthropy and provide support for the not-for-profit sector.
There are currently over 1,000 men's Sheds and around 20 women's sheds. The number of sheds is growing as the movement gains traction for its community work and benefits.
Eligibility for endorsement in this new DGR category requires sheds to demonstrate that their activities advance mental health, and prevent or relieve social isolation.
Schedule 4 to the Bill amends the International Finance Corporation Act 1955 and International Monetary Agreements Act 1947.
The World Bank's International Bank for Reconstruction and Development (IBRD) and the International Finance Corporation (IFC) play a vital role in providing financial assistance and advisory services to middle and low income developing countries.
This assistance creates significant benefits throughout our Indo-Pacific region, allowing countries to reduce poverty and build shared prosperity through investment in much-needed physical infrastructure and improved social outcomes.
The IBRD and IFC periodically raise capital to fund their activities by issuing new shares to member countries such as Australia.
However, our participation in these capital raisings is a costly and time-consuming process; requiring the drafting and introduction of new legislation for each instance where Australia subscribes to an IBRD or IFC capital increase.
These amendments aim to streamline the process by creating a clear legislative framework for Australia to enter into agreements, or amend existing agreements, to subscribe to capital increases. The amendments also establish standing special appropriations that will facilitate payments that Australia has committed to in subscribing to capital increases.
As these types of purchases of shares in the World Bank Group constitute a formal international treaty action, they will always be subject to oversight and consideration by the Joint Standing Committee on Treaties.
The passage of these amendments will also enable Australia to make its
A$154 million contribution to the IBRD's latest capital raising that was announced in October 2018.
Schedule 5 to the Bill amends the Income Tax Assessment Act 1997 to include C.E.W Bean Foundation, Governor Phillip International Scholarship Trust, High Resolves, Australian Academy of Law, Foundation Broken Hill, Motherless Daughters, Superannuation Consumers' Centre and the Headstone Project (Tasmania) on the list of DGRs. This will allow members of the public to receive income tax deductions for the donations they make to these eight organisations.
Schedule 6 to the Bill will allow the Australian Taxation Office to share JobKeeper-related information with the Fair Work Commission and the Fair Work Ombudsman. Access to this information will help the Fair Work Commission and Fair Work Ombudsman address JobKeeper-related compliance issues, in relation to obligations under the Fair Work Act 2009. This measure will help the JobKeeper scheme operate efficiently and equitably.
Full details of these measures are contained in the Explanatory Memorandum.
I rise to speak on the Treasury Laws Amendment (2020 Measures No. 2) Bill 2020 on behalf of the opposition. At the outset, I will confirm that the opposition will be supporting this bill. This bill contains six schedules relating to various aspects of Treasury legislation. The measures contained in the bill are technical and non-controversial.
Schedule 1 of the bill amends the hybrid mismatch rules in the Income Assessment Act 1997. 'Amends' is perhaps a generous assessment of this measure. The measure clarifies certain aspects and is expected to have a minor, unquantifiable revenue impact over the forward estimates period. We've heard the government make strong claims about how much they are doing to combat multinational tax avoidance, but you have to laugh when the strongest measure they've brought forward this year is a few minor typo corrections and clarifications in the more obscure chapters of the Income Tax Administration Act 1997. The government must urgently act to end multinational tax avoidance.
Schedule 2 of the bill allows the Single Touch Payroll system to include employer withholding of child support deductions from salary and wages. This measure will further streamline and simplify our child support and family law system.
Schedule 3 amends the designated gift recipient rules in the Income Tax Assessment Act 1997 to include a new category for community sheds. This means that men's and women's sheds across the country will now be eligible to receive tax-deductible gifts. There are now more than 1,200 men's and women's sheds across Australia. These sheds are doing vital work, building connections and communities. This work is more important now than ever before as our community recovers and rebuilds following the coronavirus pandemic.
Schedule 4 of the bill amends the International Finance Corporations Act 1955 and International Monetary Agreements Act 1947, to allow the government to meet obligations to the World Bank's International Bank for Reconstruction and Development and the International Finance Corporation that they have under this bill. These measures support the provision of financial assistance and advisory services to middle- and low-income countries. Of course, Labor supports them. Labor will continue to offer the government bipartisan support for Australia's participation in important global institutions.
Schedule 5 of the bill adds a number of specified designated gift recipients to the broader list of specified designated gift recipients. Labor welcomes the inclusion of the Superannuation Consumers' Centre and welcomes their advocacy of the interests of ordinary Australians in the superannuation sector. I'm glad that we're now hearing more from people who represent the interests of ordinary Australians in the super sector, whether the union movement or the consumer movement.
Schedule 6 provides for the Australian tax office to share information on JobKeeper payments with the Fair Work Ombudsman and the Fair Work Commission. This will allow the Fair Work Ombudsman to better address JobKeeper related compliance issues, particularly where employers are rorting the system and pocketing funds. We welcome the government's decision to allow the Fair Work Ombudsman to do their job here, but we would encourage the government to go further. I'm speaking about the $6 billion in superannuation guarantee levy payments that are rightfully earned by Australian workers but snatched away by their employers to fatten their own profit margins. The Fair Work Commission and the Fair Work Ombudsman could be part of that solution, and yet at this point these bodies do not have the powers or the information necessary to tackle the problem of superannuation theft.
Unlike minimum wages, sick leave, annual leave or parental leave, the universal right to superannuation is not included in the National Employment Standards. This means that ordinary workers are powerless to pursue super theft claims through the Fair Work Commission and means that the Fair Work Ombudsman is toothless in the face of this $6 billion problem. This means that workers are powerless to organise through their union to take action through the Fair Work Commission to stop having their superannuation stolen by their employer, and this is not good enough. While we welcome and support the government's decision to allow these bodies to access information relating to JobKeeper and appropriately enforce compliance around this measure, we do call on the government to act to end superannuation theft and to give the Fair Work Commission and the Fair Work Ombudsman the powers that they need to do so. I commend the bill to the chamber.
The Greens are particularly interested in schedule 6 of this bill before us today, the Treasury Laws Amendment (2020 Measures No. 2) Bill 2020. Essentially it's an omnibus bill that includes six different legislative instruments, but we're particularly interested in schedule 6. The reason is pretty simple. We in the Greens fought hard to get JobKeeper during the COVID crisis that we've all been through in recent months. Indeed, I think the Greens were the first ones to raise the issue of the need for a living wage during this pandemic. We raised the fact that countries like the UK and New Zealand were considering a living wage, and that, while we applauded it—especially Senator Siewert, after all her fantastic work in recent years to increase Newstart, which has essentially become jobseeker—we felt that it didn't go far enough. We actually needed to provide certainty for workers and businesses to stay in business during this most unprecedented crisis that we've found ourselves in. It is simply to give confidence to families, to workers and to business owners and even to consumers and the economy, which is what we need to do in times of pandemic. We've learnt enough from history to know the most important thing we can do in times of crisis is inject confidence into the economy. We learnt that from the GFC and we've learnt that from other crises.
We got JobKeeper. Let me just say a few brief words about the background of JobKeeper. It wasn't just the Greens and the Labor Party and others who were actively out there saying that we needed a living wage in the form of something like JobKeeper. I understand that the reason the government finally came to the party and legislated a living wage like JobKeeper is that the business community itself, along with the unions, the ACTU—and the role that Sally McManus and others played in negotiating the JobKeeper package with the business community has been well publicised—recognised the need to keep businesses open and to keep continuity in place. They also recognised the fact that many small business owners especially—and that is what JobKeeper was firmly aimed at, small businesses—didn't feel comfortable about joining and were unlikely to go down and join the long queues outside Centrelink. So we got JobKeeper, and I think it was a fantastic collaborative effort both by people within this parliament and by many, many stakeholders outside the parliament.
It hasn't been perfect. The Greens have been on the COVID-19 committee inquiry and we've been continually asking questions about some of the failings of JobKeeper. It is a gigantic effort to pull something like this together at short notice, and I put on record the Greens' thanks to all the hardworking public servants, especially the Treasury officials, those at the Australian Taxation Office and others, who have literally worked around the clock to make sure that we have this payment to keep small businesses ticking and to give money to workers and give them confidence. But it did leave out huge cohorts in this country, such as casual workers who have been employed for less than 12 months; and those on foreign worker visas, who are absolutely critical. In my state of Tasmania we especially need foreign workers in many of our agriculture industries and tourism industries. So it hasn't been perfect. The Greens have continually pushed for extra payments to the disability support sector, to the arts sector and indeed to the university sector and so on, and we're not taking our foot off the brake in that regard.
But what we've discovered in recent weeks is that there are a number of glaring omissions that have raised their heads and need to be fixed, and one of them is about the government's one-in all-in rule, which basically said to employers, 'If you are going to put any employees on JobKeeper, you must put all your employees on JobKeeper.' Remember that employers, yes, had to fund the first four to five weeks of this payment, but then they would be refunded. That has definitely been an issue for many small businesses, particularly if they have dozens of employees; that was potentially $20,000, $30,000 or $40,000 they had to come up with at short notice. And, for those not following this debate, there was pressure put on the banks to provide low-interest loans and 'interest holidays' on existing loans, to do whatever they could, to help small businesses meet that gap. I moved an amendment to the original legislation many weeks ago to bring that payment date forward to make sure small businesses weren't put under that pressure. Nevertheless, that's no excuse for employers in this country, when they're being given money by the government—it's not their money; these are public funds, a stimulus payment to their workers, to keep confidence in the economy, to keep food on the table, to keep their businesses going—to cherry-pick who gets JobKeeper and who doesn't. If you are eligible—and I'll get to that point in a minute, because it's very important—the law as it stands says, if you pay one employee, you must pay them all.
Now, we know that many businesses, sadly, have not adhered to the one-in all-in rule. I accept there has been some confusion in terms of dealing with accountants around this. The rules and the goal posts have been changing a lot. The situation is very fluid. It has been a difficult time. But the one-in all-in principle is very simple, and it's there for a reason. This is a government stimulus payment to keep confidence in the economy, provided by the Australian taxpayer, the public. I know that Fair Work are dealing with thousands of complaints from employees who have been left out of JobKeeper. They've been told by their employer, 'Sorry. Joe and Jane got it, but I haven't been able to sign you up for it.'
Someone very close to me has been going through exactly this situation. They contacted Fair Work and said, 'Four of my fellow employees received it, three of us haven't, and our employer has provided no explanation apart from that he got it late or he didn't see it when you sent it through, and so on and so forth—all the excuses in the world'. Fair work said: 'You are entitled to this. Your employer needs to sign you up to it. It is the law.' Then Fair Work contacted them again and said, 'Look, we feel sorry for you, but there is nothing we can do to enforce this.'
I raised this issue in the COVID inquiry directly with the Australian tax office and directly with Treasury. As it turns out, while we have this rule in place, there are no enforcement powers in the legislation. There are no enforcement powers at all. Fair Work has been telling employees who have missed out—many of whom have severe anxiety and don't have the money to pay their rent and get through this—that it can't help them until this parliament legislates enforcement powers so Fair Work can go after these employers. When the tax office answered my question, it was quite interesting. I have a lot of time for Mr Hirschhorn and have worked with him now for many years. He said, 'Look, our first port of call is to have a discussion with the employer and say, "Why aren't you putting these workers on JobKeeper?" and try to sort it out at that point.' Mr Hirschhorn's view was that it's in no-one's interest for the employer to be fined. I understand where Mr Hirschhorn is coming from, but it's easy for him to say that. He's not the one missing out on getting a payment when he needs it. That's not a slur against Mr Hirschhorn at all, but I fundamentally disagree. I think there has to be a stick-and-carrot approach. If the carrot doesn't work—there are, sadly, dodgy employers out there—there needs to be a stick. Fair Work needs the information from the tax office and it needs the power to enforce this rule.
We don't know how much longer this scheme will go on. The government introduced, unfortunately, significant uncertainty into the equation again by saying that JobKeeper will be reviewed in June, after employers and employees had been told they would get it until September. The government suddenly took it away from the childcare sector 10 days ago at short notice. So the whole point of introducing confidence into the system by providing a stimulus payment is being eroded by this government's rush to pull the rug out from under the feet of employers and employees in this country. There is this idea that somehow the economy will snap back, but we're all very worried that we're facing a fiscal cliff and that, when these payments are withdrawn, we will have significant pain and hardship on our hands.
The Greens' view is that this payment should be extended, and it should certainly be extended to those unfortunate Australians who have been left out by this government. But let's fix the law as it is before us now, especially schedule 6 in this bill, which relates to the one-in, all-in rule. I understand that a second reading amendment has been circulated in the chamber on behalf of me and the Australian Greens. I move:
At the end of the motion, add:
", but the Senate:
(a) notes that:
(i) the JobKeeper scheme requires that employers that have decided to participate must ensure that all eligible employees are nominated for the scheme,
(ii) the decision about employee eligibility is entirely at the discretion of employers, and
(iii) there is currently no avenue for employees to dispute decisions made by their employer to include some, but not all, employees in the scheme; and
(b) calls on the Government to give the Fair Work Commission the power to deal with disputes about whether a worker of an employer participating the JobKeeper scheme is eligible for the JobKeeper payment".
I also want to highlight that my colleague in the other place, the Leader of the Greens, Mr Adam Bandt, will be introducing a private member's bill to cover this exact issue.
And I've just been reminded that my colleague Senator Faruqi has done exactly the same thing on behalf of Mr Bandt.
This is an issue we all care about. I know the Labor Party care about it and, I'm sure, so do the crossbench. To my colleagues across the chamber: in the spirit in which you introduced JobKeeper—and thank you for doing that; thank you for working with all stakeholders and bringing in a living wage—let me also remind you that what has been seen can't be unseen. Government stepping in and keeping businesses going is a good thing when it's needed. We would like to see this concept extended way beyond COVID to look at a permanent living wage. We think it's very important that government plays a strong role in our lives. The Greens have always argued for a strong role.
May I remind the minister, while I'm on my feet, that, in a recovery phase, the government also has a strong role to play by investing in the community: investing in infrastructure projects that will build this country; investing in transitioning to 100 per cent renewable energy in this country; providing job security for young Australians, who, by Jove, have had a difficult few years. If you're a young Australian now, you've been told to stay at home for three months and not go out. You've seen a summer of horrendous bushfires, with Australians being evacuated from beaches; record droughts; the destruction of the Great Barrier Reef, with a third mass coral bleaching in our oceans. You surely must be wondering what the future holds for you. It's our job as government to give them that certainty—for the next generation, not just for the next few weeks or the next month through the JobKeeper scheme. Our role is to take that concept and provide a future and security for young Australians—something that they can feel that they are being supported on. So we need to take these principles that we've all applied in recent weeks and months, which have been great, and now extend them to the future. No more austerity. No more zombie budget cuts. Let's have a strong role of government in our lives. The Greens will be supporting— (Time expired)
Can I start by thanking Senator Whish-Wilson for his praise of our public servants—and I agree—with the great work that's been done by many officials, not just in the Treasury, though the Treasury certainly has been at the heart of the economic response of the government, and we're very pleased and very grateful for that very, very hard work.
Very briefly, on this second reading amendment that has been circulated: given we've had five minutes or so to consider it, we won't be supporting it. Senator Whish-Wilson obviously flagged that there may be private senators' bills that deal with this, and I think that that would be more appropriate than, with five minutes notice, looking to set up a new mechanism, as is suggested in that second reading amendment. So, for that reason alone, we won't be supporting the second reading amendment.
I'd like to thank those senators who have contributed to the debate. Schedule 1 to the bill amends the Income Tax Assessment Act to ensure that the hybrid mismatch rules operate as intended and help to ensure the integrity of Australia's income tax laws and their application to multinational enterprises.
Schedule 2 to the bill amends the Taxation Administration Act to allow employers to voluntarily report under the Single Touch Payroll rules information about employer withholding of child support deductions and child support garnishee amounts from salary or wages that are paid to the Child Support Registrar. This measure will streamline the child support reporting process, simplifying reporting and giving employers a greater return on their investment in Single Touch Payroll.
Schedule 3 to the bill amends the Income Tax Assessment Act 1997 to establish a deductible gift recipient general category for men's sheds and women's sheds. This provides sheds with more opportunities to attract public financial support.
Schedule 6 to the bill will allow the ATO to share relevant information relating to the JobKeeper scheme with the Fair Work Commission and the Fair Work Ombudsman. This information will help the Fair Work Commission and the Fair Work Ombudsman to address JobKeeper related compliance issues in relation to obligations under the Fair Work Act 2009. I commend this bill to the Senate.