Senate debates

Tuesday, 24 August 2021


Treasury Laws Amendment (2021 Measures No. 2) Bill 2021; Second Reading

5:46 pm

Photo of Rachel SiewertRachel Siewert (WA, Australian Greens) Share this | | Hansard source

I rise to make a contribution to the debate on the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021. Schedule 1 of this bill introduces changes requiring an institution to be either a registered charity or a government agency in order to be entitled to deductible gift recipient status. While most DGRs are already registered charities, some are not. These are practical changes that will provide for improved regulation, governance and oversight of all DGRs and reduce unnecessary compliance costs. But any sensible reforms are under threat by the government's very real and very present attempt to shut down charities for speaking out. Charities across Australia are calling on the government to abandon the Australian Charities and Not-for-profits Commission Amendment (2021 Measures No. 2) Regulations 2021. Under these regulations, charities could be deregistered if they commit or potentially commit summary offences. They could also be deregistered if they fail to maintain internal control procedures documenting that their resources are not being used to promote minor offences. In practical terms, this means charities could be deregistered for lawful activity, like promoting a rally where people are peacefully blocking the entrance to a business; setting up an email group for a local community group which, even without the charity's knowledge, uses it to plan a peaceful protest involving a minor trespass, like a sit-in somewhere; or failing to implement or document policies and procedures that control how staff and volunteers may behave.

Every single day of every single year, charities do incredible work to support people through unprecedented crises in this country. I don't think we would be surviving the COVID pandemic without our charities sector. Charities are seeing people they have never seen before in need of emergency food relief and shelter. People enduring lockdowns across the country are experiencing unprecedented hardship and mental health issues. This isn't the first time the government has attempted to silence charities. In fact, I've been dealing with their various attempts through this place ever since I've been here. They would rather charities just delivered services without addressing the causes of the need for such services in the first place. How would we get through this crisis without our charities? The regulations proposed by the government are in danger of putting this vital work at risk. There is no doubt that they will significantly impact the ability of charities to carry out their work advocating for the most vulnerable in our community. The regulations are a blatant attack on charities and, I would strongly argue, on our democracy, because charities have a vital role in civil society and in our democracy.

Last week the Standing Committee for the Scrutiny of Delegated Legislation, in tabling Delegated Legislation Monitor No. 12 of 2021, noted that it had 'significant unresolved concerns about the regulations'. It said:

… the committee is concerned about the obligations the instrument imposes on charities to maintain reasonable internal control procedures to prevent the use of their resources to promote another entity's unlawful actions.

The committee said that these obligations will require the ACNC commissioner to make a subjective judgement and exercise broad discretionary powers without any clear guidance or limitations.

There are many outstanding questions that need to be answered: what objective test will be applied to determine whether a charity has complied with these requirements? In what circumstances can the ACNC commissioner seek advice from law enforcement agencies about compliance with the standards? Most importantly, where is the evidence to show that these regulations are needed in the first place? There are already adequate protections in place to prevent charities from engaging in unlawful acts.

The committee is also concerned about the impact of the regulations on the implied freedom of political communication. It said that the regulations may restrict a charity's ability to support or promote certain types of political protest without having committed any unlawful act themselves. The committee has asked the Assistant Treasurer for detailed advice on what objective test will be applied to determine whether a charity has complied with the requirements and how the instrument as a whole does not impermissibly restrict the implied freedom of political action. The regulations have serious and wide-ranging consequences for 59,000 charities across this country.

I would like to commend the committee for its commitment to scrutinising regulations closely. The Standing Committee for the Scrutiny of Delegated Legislation is going to continue to scrutinise these regulations. I urge all in this place to think hard about the devastating impact these changes will have on charities and the most vulnerable members of our communities. We simply cannot afford to abandon our charities at a time when we need them so much.

5:52 pm

Photo of Andrew BraggAndrew Bragg (NSW, Liberal Party) Share this | | Hansard source

I rise tonight to make some comments about the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, and I want to speak about the offshore banking unit policy. The offshore banking unit policy was introduced in 1987 by the then Treasurer, Mr Keating, with the view that Australia would be an open, dynamic economy that wanted to have a tech and finance sector and wanted to attract the sort of business where an Australian domiciled company could be providing financial services to organisations and to people who were not necessarily residents onshore. The principle was that you would conduct your business through an Australian organisation but conduct it to an offshore consumer. In 1982, a 10 per cent tax policy was applied to the offshore banking unit. That was a significant discount on the overall corporate tax rate, which today sits at 30 per cent; so offshore banking unit organisations, subject to the law of Australia, have a 20 per cent discount on eligible activities. Again, it is designed for offshore transactions and is not available to Australians.

This concept is not unique to Australia. It was put in place, wisely, by that Labor government because we do have an ambition to be a clever country, an economy which has a large and growing tech and finance sector, and one which is able to attract offshore investment in order to create more jobs in Australia in that services sector. And that need hasn't gone away since 1987. In fact, that need is more pronounced than ever. The reason we're here looking at the repeal and the closing of the offshore banking unit is that there have been judgements made by the OECD that the offshore banking unit, as put in place by the former Labor government, was a harmful tax practice. On that basis, there are many, many countries which have harmful tax practices—for example, Luxembourg, Ireland and Singapore—because they operate at significant discounts to the headline tax rates of those countries when they provide services to companies that are, in effect, doing business offshore. So we need to tread very carefully in the removal of the offshore banking unit, and that's what this bill does. It effectively closes the offshore banking unit to new entrants, with a view to grandfathering out the existing users of the offshore banking unit by the end of the 2022 financial year. But that can't be the end of the story. We still want to provide those sorts of services, in a tax preferred environment, because our competitors would continue to do so. The Treasurer's statement on closing down the offshore banking unit refers to the need to replace the offshore banking unit. We should be looking to do that over the next 12 months, because there are at least 1,000 jobs on the line—mainly in Melbourne and Sydney—which rely upon having some sort of policy certainty here.

Last year I commissioned a group of people in the tech and finance sectors to give advice to me, in my role as a senator for New South Wales, about what we could do to improve the competitive position of the country in this tech and finance space. This report, chaired by former Macquarie banker Mr Andrew Low, has provided a number of options. One of the options that the committee came up with could actually be used to replace the offshore banking unit. The Low committee proposed having an incremental business activity regime, which is an interesting idea. It would effectively be a system that would come into place when companies were relocating to Australia and bringing those jobs onshore from places like Hong Kong. I think it would be remiss of the Senate to ignore the geopolitical and economic changes happening in our region, especially Hong Kong. Hong Kong is going through the greatest disruption in terms of its legal stability, given it now has the draconian national security law from Beijing applying in Hong Kong. I think, in the long run, this is going to chill foreign investment in that jurisdiction.

When you look around our region, you think of Singapore and Hong Kong as strong tech and finance hubs. The instability of Hong Kong should be an opportunity for Australia to try to capture some of the growth. What we shouldn't be doing is trying to close down avenues where Australia can attract that growth and investment in jobs from places like Hong Kong. So the timing of the removal and the closing down of the offshore banking unit at the behest of the OECD, where you would think we'd perhaps have a bit more purchase now, really does need to come with the strong commitment that the Treasurer has made to replace the OBU. The Low committee came up with one option, an incremental business activity regime. The Senate committee that I'm chairing will also look at options. But it is a very important principle that we don't get bashed up by multilateral institutions that take away our capacity to be competitive and leave the capacity to be competitive in other countries, largely in Europe. This is a very important principle: for Australia to be committed to dynamic policies like the offshore banking unit, which was put in place—and all credit to Mr Keating for doing it—some 30 years ago. The way forward on the offshore banking unit has to be that we are going to be at least as competitive as Singapore, Ireland and the UK in relation to finance and banking services.

I make one final point, and that is that there has been much discussion through the OECD recently about the new global commitment amongst OECD member nations to a minimum corporate tax rate of 15 per cent. If we had a minimum global tax rate of 15 per cent, which would be half the Australian statutory rate, and that were applying to the offshore banking unit regime, which is to be abolished in the next two years, I don't think that would be a great problem. You would find that those 1,000 jobs that are hanging off offshore banking units today would be there tomorrow if you were to ratchet up the tax rate by five per cent. What I'm very anxious that we do over the next six to 12 months is to look at the options to replace the offshore banking unit regime, because, as this bill goes through—and I expect it will go through both chambers—the offshore banking unit regime will be closed. It is due to close in 2023, so it is critical that we provide a commitment to the people who are employing these 1,000 Australians—mainly in Sydney and some in Melbourne—that there will be an arrangement that retains the competitiveness that they enjoy today in some form.

We need to look at the options that were flagged by Mr Lowe, and we need to look at the options that may fall out of having the minimum global tax rate that is being flagged by the OECD, and we need to do that over the six to 12 months, because the clock will run down very quickly. There will be many other distractions over the next six to nine months, I'm sure, and it's very important that we value these jobs in services just as much as we value the jobs in coalmining and other parts of the economy.

6:01 pm

Photo of Jenny McAllisterJenny McAllister (NSW, Australian Labor Party, Shadow Cabinet Secretary) Share this | | Hansard source

I rise to speak to the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021. This bill, as colleagues have pointed out, undertakes largely technical amendments via two schedules. The first concerns the regulation of charities, and the second concerns the tax treatment of offshore banking units. As my colleague Senator Watt explained in the contribution he made earlier, although Labor supports these changes—they are sensible changes—we will be taking the opportunity presented by this bill to address other very serious problems created by the Morrison government in these two policy areas.

It's ironic, really, that the government has described the charities provisions as an opportunity to support and strengthen the charity sector, because in fact the charity sector is under incredible attack. It is regulated by a person who has shown himself, by so many words and deeds, to be demonstrably unsuitable to occupy the position of charity regulator. The government now plans to give him further powers to persecute those charities that are not, it seems, of a flavour that the government likes. The government proposes to extend the ability of the charities commissioner to deregister a charity for a summary offence or because the charity commissioner anticipates that the organisation will commit a summary offence. It is draconian, it is unnecessary and, as group after group after group has pointed out, it will lead to unconscionable anomalies in the way that charitable organisations are run, to enormous amounts of red tape and to an unfair regulatory exposure which does nothing to strengthen the charity sector and can only weaken it.

This is indicative of a government led by a man with a glass jaw. Mr Morrison hates criticism. He cannot deal with criticism. You can see him seize up when he's even asked a question, especially by a lady journalist. I've seen it happen. So it's not surprising that he seeks to muzzle those organisations that might advocate for the people who don't have very much, for people with disabilities, for the environment or for future generations that would like a climate that they can live in safely.

It's not surprising that Mr Morrison doesn't like some of the arguments that are put forward by Australia's charities, but it's unacceptable that he would seek to regulate them in the way that is proposed. Labor stand with the charity sector that is being unfairly targeted in this way. That's why we are moving a second reading amendment calling on the Senate to note that the government is pursuing these changes to charity law that could stop charities and churches from speaking up for core principles and articles of faith in civil society, limiting their freedom of political communication and limiting their participation in our democratic system. This is not in Australia's interests. It's on that basis I move the second reading amendment that I believe has been, or is shortly to be, circulated in my name:

At the end of the motion, add ", but the Senate notes that:

(a) despite promising to streamline reporting in the charity sector, this Government is instead pursuing changes to charity law that could stop charities and churches from speaking up for core principles and articles of faith in civil society, limiting their freedom of political communication and participation in our democratic system; and

(b) while the Government boasts about its multinational tax measures, it has failed to curtail the use of tax havens and tax avoidance schemes by multinational corporations."

Turning to schedule 2, this is the schedule of the bill that amends the Income Tax Assessment Act to remove the preferential tax treatment that is provided for offshore banking units and provide transitional arrangements for those existing offshore banking units. In 2018, the OECD forum on harmful tax practices determined Australia's OBU regime to be a harmful and preferential tax regime. In response, the regime will be closed to new entrants. Existing participants will be allowed to use this tax treatment until the end of 2022-23. It's good that the government is finally cracking down on the schemes that let multinationals take advantage of our tax system. It only took them three years! Like so many things with this government, it is never ever quick to move. But it's better late than never. But there is more to do, and that's why the second reading amendment that I referred to earlier calls on the Senate to recognise that the government has failed to curtail the use of tax havens and tax avoidance schemes by multinational corporations.

As the Leader of the Labor Party has flagged, Labor will have more to say about multinational tax ahead of the next election, but in this speech I wish to foreshadow a substantive amendment that Labor will be moving during the committee stage relating to JobKeeper transparency. Earlier this year we found out that $13 billion in JobKeeper payments went to firms that increased their turnover during the pandemic. It went to Monaco based billionaires, men's only clubs and the highest fee-paying private schools in the country. This is a shocking waste—$13 billion is more than the government spent on the childcare subsidy last year and it is more than the government spent on public schools last year. JobKeeper was supposed to support firms that were suffering. It was supposed to support workers whose jobs were at risk. It was never meant to go to firms whose profits were rising. It was a good idea. Labor argued for a scheme which would support people's connection to their workplaces during the worst phases of the pandemic, but it was implemented very, very badly.

If the Morrison government had avoided this waste, it could have afforded to extend JobKeeper to the one million casual workers who missed out on any support. It could have saved people from losing their jobs. It could have saved those many young people, mostly women in the hospitality and retail sectors, that missed out. It could have saved them from losing jobs and livelihoods during the pandemic. If this waste had been avoided, we would have more to spend on supporting Australians currently in lockdown who are struggling to pay rent and put food on the table. The Prime Minister has never asked any of these companies to pay back a single cent. He says that calls to pay back JobKeeper are the politics of envy.

We know what the answer to this problem is. It's something that the Liberal Party is apparently entirely allergic to—and that is transparency and accountability. Transparency is not a radical solution in this context. Both New Zealand and the United States keep public databases of companies that receive income support. It doesn't make a difference. In the early months of JobKeeper, 15 per cent of the money went to firms with rising earnings. Some companies have repaid it, with repayments totalling $225 million, about a quarter of a per cent of the total. But almost all of those repayments have come from public companies. What's the significance? Those, of course, are the companies whose JobKeeper receipts had to be reported in their annual reports. Those were the companies exposed to some measure of public scrutiny.

In New Zealand, which has an online register listing all recipients of their wage subsidy scheme, around five per cent has been repaid. It's a very big difference, isn't it, to the very small amount that has been offered back here by those companies who did pretty well? This is most likely a result of greater transparency. Labor has been calling for more transparency for a long time. It's why we were happy to support an amendment that Senator Patrick moved in the last sitting fortnight. Unfortunately that amendment was to the bill providing support for people in lockdown. The government is so opposed to transparency that it's pretty clear it was willing to play chicken with that support for people in lockdown, to avoid the consequences of scrutiny of their waste and mismanagement. There was a chance that insisting on the amendment here in the Senate would have delayed support for those in lockdown, including thousands in Western Sydney. It says something about this government that the Prime Minister was prepared to let the livelihoods of Australians on COVID support payments become collateral damage in his fight against the transparency that the Senate has demanded of his government. It's an outcome Labor doesn't want to risk, but we strongly believe that the public deserves to know how its money is being spent. We were and we remain committed to finding other opportunities to force the government to be more transparent about JobKeeper payments. I will have more to say about Labor's amendments during the committee stage.

6:11 pm

Photo of Slade BrockmanSlade Brockman (WA, Liberal Party) Share this | | Hansard source

I rise to speak on the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021. I will spend most of my time this evening speaking on the deductible-gift-recipient-status element of this bill. The bill has two schedules. I note that the second schedule, regarding offshore banking units, is largely uncontroversial and is agreed by everyone in this chamber. I hope that is the case. So I am not going to spend a lot of time dwelling there. However, I will address some of the issues just raised by Senator McAllister and I will remind the Australian people again that, a little more than 12 months ago, we were entering a pandemic the likes of which we had not seen for 100 years, the economic outcomes of which we could not guess.

The level of uncertainty in those first few months of last year was extraordinary. In setting up the JobKeeper scheme, the government did allow businesses to base it on what they felt was going to happen into the future. This was done for a very good reason. In situations like this, confidence is absolutely key to bouncing out of the negative impacts. It is key to maintain high levels of confidence to maintain economic activity. By being able to maintain a link to their employees, companies and business leaders can have the confidence to actually bounce out of the negative impacts of a one-in-100-year global event of very significant economic proportions. That is wilfully ignored by those opposite. Confidence was, right from the beginning, always going to be key. By closing the borders rapidly and early, as the Morrison government did, there was confidence that we would protect the health of Australians. Acting in a strong way to protect businesses' economic underpinnings and to protect the links of those businesses with their employees was a part of sustaining that confidence in the Australian economy, in the business sector and in the hardworking Australians who wanted to stay connected to those jobs, who wanted to stay connected to their employers.

It was a compact with business. They had to make a projection as to what they thought the negative impact on their business would be. Did all those businesses get that projection correct? No, they did not. In fact, this government took swift action in doing such things—difficult things, things that others on the international stage said that we should not do—like closing our international border very quickly, at first to Wuhan, then to wider China and then to other affected areas around the globe before finally, unfortunately, having to close our international borders to pretty much the rest of the world. In doing so, obviously that was always going to have a dramatic impact on the economy. Add to that the internal lockdowns that we faced over a period of time, which unfortunately are still going on today, and we have a rolling economic impact. We have government acting strongly and decisively, in the face of an economic crisis the likes of which the nation has not seen since the Great Depression, to allow those businesses to estimate where they would be. In good faith, we said: 'You do the right thing. You keep your employees connected to this workplace, and we will underpin that through the JobKeeper program.' And that is what occurred.

Now, subsequently, in what is quite frankly a bit of a political stunt that those opposite obviously revel in, they want to seek to look at those rules retrospectively. I think that the government made it very clear, right upfront, what the rules of that initial phase of JobKeeper were. They changed over time. That was done at a particular point in time in a particular set of circumstances, and the rules were very clear. This government stands behind them. I will get on to deductible gift recipient status, but I think the economic underpinning that we put into our society not only protected jobs and our for-profit economic sector, if you like; it also did an extraordinary amount to allow our not-for-profits, our charity sector and our deductible-gift-recipient-status organisations to continue their work. It kept a level of activity, certainty and confidence in the entire Australian economy, which stretched not just through the for-profit sector but also into the not-for-profit sector, into our civil society. It allowed Australians to continue, to a great degree, supporting the charities and organisations that they wished to support.

I do wish to get to the actual provisions of this bill. The bill makes a number of changes to tax law to implement reforms to the administration and oversight of organisations with DGR, deductible gift recipient, status. DGR organisations are those which can receive donations that are tax deductible. If a donation is tax deductible, donors can deduct the amount of their donations from their taxable income when they lodge their tax returns. The Australian Taxation Office is responsible for decisions on DGR endorsement.

Schedule 1 of the bill amends the Income Tax Assessment Act 1997 to require non-government entities seeking endorsement as a DGR to be a charity registered with the Australian Charities and Not-for-profits Commission or be operated by a registered charity. Ancillary funds and specifically listed entities will continue to be exempt from this requirement. The requirement to be a charity already applies to the majority of the general DGR categories in subdivision 30-B of the 1997 tax law. Currently, for the remaining 11 DGR categories, the requirement to be a registered charity or government agency does not need to be satisfied for the fund, authority or institution to be entitled to DGR endorsement. As charity registration is not a precondition for DGR endorsement for these categories but is for other categories, there can be inconsistent governance and reporting requirements for these DGRs. Making charity registration a precondition for DGR endorsement across all the general DGR categories will improve the consistency of regulation, governance and oversight of DGRs while also reducing unnecessary compliance costs.

When the amendments take effect, DGR applicants will generally have to register as a charity with the ACNC before applying for DGR endorsement. There will be streamlined processes to allow DGR applicants to lodge a single application with the ACNC seeking charity registration and indicating their intention to be endorsed as a DGR or as a DGR for the operation of a fund, authority or institution. Once the ACNC is satisfied that the applicant is entitled to be registered as a charity, the ACNC will pass on the necessary information to the ATO to assess the applicant's entitlement to DGR endorsement.

The amendments include a 12-month transition period, which will provide non-charity DGRs with the time to meet the charity registration without losing DGR status. Eligible DGRs may also have access to an additional three-year transition period. Improved consistency, governance and oversight of DGR entities will ultimately help support continued public confidence and support the sector and DGR entities. I think this last point is absolutely imperative for those out there listening to this debate to understand. There is a level of confusion within the general public about what all these various categories mean—what a DGR is versus what a charity is. Clarifying this and making it very clear that everyone has to fit within this governance framework will enhance the way that charities are viewed, will enhance the status of those organisations within the general public's eye, and will actually improve confidence and improve the sector over time.

I will just return to where I started. This government is committed to having a very strong charities and civil society. It's why we have done many of the things that we have done over the last 12 months. It's good to see that this legislation is before us now. It's very clear that, contrary to what those opposite have been saying for the last few weeks, this government is capable of doing many things at once and doing many things very well. So, with those few short comments, I thank you very much.

6:22 pm

Photo of Tony SheldonTony Sheldon (NSW, Australian Labor Party) Share this | | Hansard source

[by video link] I rise to speak on the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021. Labor supports the two schedules of this bill. Schedule 1 makes minor changes to the Income Tax Assessment Act to require non-government entities seeking endorsement as a deductible gift recipient to be a charity registered with the Australian Charities and Not-for-profits Commission or to be operated by a registered charity. This measure to improve the consistency of governance and oversight of deductible gift recipients is a small but welcome change from Mr Morrison's ongoing war on charities.

Mr Morrison's war on charities has ramped up in recent weeks, with the unveiling of new regulations that will allow Mr Morrison's charities commissioner to silence and deregister charities for criticising Mr Morrison, all for speaking out on their core issues. This silencing of opinion is something you might expect from Xi Jinping in China or from Putin in Russia, not here in Australia. Because Mr Morrison has introduced these changes as regulations, rather than as a bill, they do not even need to be approved by parliament. It is antidemocratic. It is chilling.

So what exactly do these regulations say? They say that any Australian charity can be deregistered and shut down if a single employee or volunteer engages in any unlawful conduct. That includes minor trespassing or vandalism. Not only that; charities can also be deregistered and shut down if they fail to ensure their resources are not used to promote or support misconduct. So what does this mean in practice? Some of the most highly respected charities in Australia have shared examples of conduct that might now mean they can be shut down for good. The ACT Council of Social Services CEO, Dr Emma Campbell, said:

If enacted, these new regulations will mean that charities could be deregistered for the most minor of offences such as blocking a footpath at a public vigil or placing a sticker on a lamppost.

The CEO of the Victorian Aboriginal Legal Service, George Selvanera, is reported as saying:

Under these laws,[ the Aboriginal legal service] could be deregistered if one of our employees attended a protest organised by a third party and temporarily obstructed traffic during that protest …

There's also Nicole Hornsby, executive director of Baptist Care Australia, who described the measures as 'totally unreasonable'. The list goes on. The CEO of Vinnies, Toby O'Connor, says:

The administrative burden of monitoring all our activities is enormous and not warranted. Unlawful acts are already covered by existing criminal law. These changes increase red-tape for no good reason.

Kasy Chambers, the executive director of Anglicare Australia said:

… this is silly and it's going to have consequences which will not be good for anybody.

She also said:

Who they'll come after first is anyone's guess …

An open letter from charities including Amnesty International and the Fred Hollows Foundation says:

Our reputations could be harmed, our boards could be stood down and replaced, and at worst, we could be deregistered as charities.

In times of crisis and disaster, we will be forced to slow down our response and seek advice on possible risks created by these unnecessary proposals.

…   …   …

These regulations must be abandoned. The work of Australia's charities should not be stifled when the country needs us the most.

So there you are. The ACT Council of Social Services, the Victorian Aboriginal Legal Service, Baptist Care, Anglicare, Vinnies, the Fred Hollows Foundation and Amnesty International all roundly oppose these regulations. These are the groups that Mr Morrison is trying to crack down on—and 60,000 other charities.

The government's own Treasury review recommended that the existing regulation around 'unlawful conduct' be scrapped—so the laws as they are were already deemed too harsh by the government's own review—but, instead, Mr Morrison wants to dramatically increase the restrictions on charities. We all know why this is happening, and it needs to be called out. Mr Morrison does not want charities, those who advocate for and support the most vulnerable people in Australia, disagreeing with his callous and harmful policies. Remember, Mr Morrison introduces laws which attack vulnerable Australians, such as his deadly robodebt policy; he does not want charities to speak out on their behalf. It's the exact same approach the Morrison government has long taken towards trade unions, because, ultimately, in Mr Morrison's Australia, charities, trade unions and the shrinking middle class are on one side and he is on the other.

Schedule 2 of the bill amends the Income Tax Assessment Act to remove the preferential tax treatment provided for offshore banking units. Offshore banking units are effectively a tax loophole that enables financial services companies to provide banking services to offshore customers. Labor supports this move. It's the least the Morrison government could do to address corporate tax avoidance. After eight years of this government, we still have a third of large companies in Australia paying no tax on their profits. When Mr Morrison and his colleagues were in opposition, they voted against the laws the Labor government proposed to begin closing tax loopholes.

That brings me to the group Mr Morrison is actively trying to protect and shield from criticism: the billionaires who have been rorting the public purse through JobKeeper. Labor is moving an amendment to this bill to create a transparent register of firms with an annual turnover of more than $10 million that received JobKeeper. Mr Morrison's JobKeeper system is unique. It is the only system of its kind in the world that was introduced with zero—zero—transparency. In New Zealand, there is an online register listing all the firms that received their equivalent of JobKeeper. Of course, as a result of that, many New Zealand companies who actually increased their earnings during the pandemic have paid the money back. Here in Australia, there is no online register. There is no requirement for highly profitable companies to pay the money back. The Morrison government has been fighting tooth and nail to stop the Australian public from seeing what it has been doing with their money.

We have barely scratched the surface on companies that actually increased their profits by receiving JobKeeper. Thankfully, through ASX reporting requirements, we do at least know about ASX listed companies that have rorted the system. In fact, according to the corporate advisory group Ownership Matters, nearly 90 per cent of JobKeeper that has been returned has come from public companies. This shows that transparency does cut out the rorting. But there are plenty of highly profitable companies that refuse to pay that money back, and there would be many, many more that we still don't even know about because Mr Morrison opposes JobKeeper transparency. He supports companies being allowed to use public money to pay dividends, pay down debt and pay executive bonuses.

We know who the losers in the Morrison economy are: middle-class Australians who are suffering through eight years of record low wage growth, who are seeing their jobs made insecure and who no longer have middle-class pay for middle-class jobs. We know that charities are losers in Mr Morrison's economy. He has threatened to shut them down for even the most trivial infringements. We know small businesses in Western Sydney are more of Mr Morrison's losers, because they're suffering through months of lockdown because of his botched vaccine rollout.

Who are the winners in the Morrison economy? The billionaires, of course. Mr Morrison's top winner is Gerry Harvey. Harvey Norman more than doubled their profit during COVID-19, while receiving $22 million in JobKeeper. Gerry Harvey did not even have to lift a finger to receive that $22 million, which is many times more than the vast majority of Australians will make in their lifetime. Did Mr Morrison even ask him to pay it back? Of course not. Gerry Harvey took that public money and paid himself a $78 million dividend. This is the same Gerry Harvey who once said:

You could go out and give a million dollars to a charity tomorrow to help the homeless. You could argue that it is just wasted. They are not putting anything back into the community … You are helping a whole heap of no-hopers to survive for no good reason. They are just a drag on the whole community … It helped to keep them alive but did it help our society? No. Society might have been better off without them …

That's Gerry Harvey's view. I think society would be better off without billionaires like Gerry Harvey leeching off the public purse. These are the sorts of vile, sneering billionaires that Mr Morrison is running a protection racket for.

Of course, Gerry Harvey isn't Mr Morrison's only winner. There are other billionaires. James Packer, who is worth $4.69 billion, received $110 million in JobKeeper through his company, Crown. John Gandel, who is worth $5.4 billion, received $11 million in JobKeeper through his company, Vicinity Centres. Brett Blundy, who is worth $2.2 billion, received $6.48 million in JobKeeper through his various retail brands. Of course, there is the pokies king Lenny Ainsworth, worth $4.42 billion, who received $11 million in JobKeeper through his company, Aristocrat Leisure. Aristocrat went on to pay dividends of $63.9 million to shareholders. That's our money. These are the big winners in Mr Morrison's economy, the billionaires who are only ever a quick phone call away from a big, public cash-out from Mr Morrison, with no expectation that they will ever have to pay it back.

At the same time, Mr Morrison has instructed Centrelink to chase with debt recovery notices more than 11,000 workers who received JobKeeper. Those 11,000 working Australians are being hounded for alleged overpayments of JobKeeper. How disgraceful is that?

This gets to the core of why Mr Morrison is so opposed to any transparency around JobKeeper. The truth is that JobKeeper is the biggest corporate and billionaire welfare rort in Australian history. Mr Morrison and his mates, such as Gerry Harvey, could never again sit on their gilded thrones and complain about dole bludgers or welfare recipients. Gerry Harvey is the biggest dole bludger in Australian history. If the Australian public were ever to be given a glimpse of the scale of the rorting that Mr Morrison has allowed through JobKeeper, it would be a national disgrace on par with his botched vaccine rollout.

So I urge the Senate to support the Labor amendments in order to force some desperately needed transparency into the JobKeeper scheme. I note that Senator Patrick and others on the crossbench have also been advocating greater transparency in JobKeeper. It appears that the Australian parliament, with the exception of the Liberal and National parties, is in fact very unified around this cause. I don't know how many members or senators of the Liberal and National parties can go back to their electorates and tell them with a straight face that they are coming to Canberra to represent their interests. If they were to stand here today and vote against this measure, that would increase transparency around JobKeeper rorting. Mr Morrison may be able to go to Canberra and say with a straight face that, no, Gerry Harvey deserves that $22 million welfare payment—he earned it—but I would hope that some of his colleagues could not.

Mr Morrison is, of course, a seasoned veteran of talking out of both sides of his mouth. He runs scare campaigns about debt and deficit while racking up the largest debt and deficit in Australian history—a trillion dollars in debt, thanks in large part to the billions in JobKeeper he has handed out to billionaires. Mr Morrison says that the Australian government could not afford to provide JobKeeper to casual workers, yet he has given Gerry Harvey $20 million in JobKeeper. Mr Morrison says highly profitable big businesses should not have to pay back JobKeeper, yet he hounds 11,000 welfare recipients with JobKeeper debt recovery notices.

There are vaccines, lockdowns, bushfires, aged care, the NDIS, sexual harassment at work and labour hire in the mining sector—the list goes on and on. (Time expired)

6:37 pm

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | | Hansard source

I must say that I always like following Senator Sheldon, but on this occasion his rhetoric wasn't as bright as his jumper. It's a beautiful blue jumper. I saw you on the TV screen, Senator Sheldon, and I thought, 'What's that little tint of blue in the sky?' It was Senator Sheldon! But it's always good to follow Senator Sheldon.

I'm also pleased that Senator Siewert is in the chamber as I make this contribution. If Senator Siewert were to speak on this legislation, and I'm not sure if you are speaking on it, I would say to you—

Photo of Rachel SiewertRachel Siewert (WA, Australian Greens) Share this | | Hansard source

I already have.

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | | Hansard source

I say to you, Senator Siewert, that I could anticipate knowing what you would have said, and you would have said it with the great passion you bring to all debates in this place. As a relative newcomer to this place, I really pay tribute to you. You've been a great example for everyone to follow.

Maybe I should say something nice about all the senators in the chamber. I won't say it's going to get progressively harder as I go around the chamber, because it won't, but I should get back to the topic under discussion, which, of course, is the legislation we're talking about today, the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, which deals with charities.

If I can, I will talk for one moment about the issue of JobKeeper. I just want to flip it. I want to make it a positive. Let's make the negative a positive. Senator Sheldon made some negative points, and I take them on board, but let's talk about some positive points with respect to JobKeeper. The first point is that it was a massively successful system. It was a game changer. It absolutely was a game changer when this pandemic first hit Australia. I think we as a country and both sides of parliament—all of us—should be very satisfied with the impact that JobKeeper had. It saved hundreds and hundreds of thousands of jobs and made sure that businesses, small and large, could keep operating. That was so important. I, like many representatives in this place would have, met businesspeople across Queensland at that time who described what it was like to be under such stress. Then the announcement of JobKeeper arrived, and it was transformative. They saw a future. So let's first take a moment to reflect on how successful the system was, on how successful the policy initiative was.

The second thing to note is that what's being discussed here isn't a question of companies going outside the realm of what was permitted by the JobKeeper legislation. It should be noted that at the time companies were applying for the JobKeeper incentive no-one knew what the future was going to be like. The companies didn't know whether or not they were going to be profitable in the eight, nine or 10 months ahead. They just didn't know. The policy was available for them. It was intended to be a generous policy. It was intended to be proportionate. It was intended to be limited in time frame. It was intended to get the money out there as quickly as possible. It was successful. The companies who applied for JobKeeper payment didn't know what the future held for them.

Thirdly, I will talk about some of the companies who have paid back some of the JobKeeper that they've received. We should take a moment in this place to acknowledge those companies, who considered their own circumstances—I don't know all of their circumstances—and have repaid JobKeeper payment to the Commonwealth, to the Australian people. I will mention a few at this point and call out to them and congratulate them, because I think their example is a shining bright example for all Australians. The first one is SIMEC. It received $20 million in JobKeeper payments and repaid $20 million. Iluka Resources received $13.6 million in JobKeeper payments and repaid $13.6 million. Santos received $4 million and repaid $4 million. Domino's Pizza—I wouldn't know who they were as I've never heard of them; don't laugh too loudly, Senator Hume—received $0.8 million and repaid $0.8 million. Adelaide Brighton received $0.2 million and repaid $0.2 million. Toyota, apparently, received $18 million and repaid $18 million.

Senator Dean Smith interjecting

Oh what a feeling, Senator Smith! Absolutely, oh what a feeling. That's right, a bit of product placement in the Senate. There were also four companies outside the ASX 300 who repaid JobKeeper amounts, and I think we should acknowledge them as well. They were Australian Clinical Labs, Peter Warren Automotive, Universal Store and Dusk Group. Congratulations to all of those companies, who at the time of the pandemic were entitled to receive JobKeeper payments. They didn't know what was going to happen in the months following, so they applied for and got the JobKeeper payments. Looking back in time, they didn't need the payments, and in good conscience, in accordance with their social licence, they repaid those amounts. I congratulate each and every one of those companies.

Moving on to charities, there was a bit of talk around regulations et cetera in the charities space. Let me simply say that I commend the work of our scrutiny committees to everyone who watches what happens in this place and reiterate how much I enjoy serving on both scrutiny committees with my good friend Senator Carr on the other side of the chamber. Our scrutiny system does great work, and I'm sure it will do great work in the years and years to come.

The first point to note with respect to charities is that charities perform an absolutely crucial role in filling the gaps, in making sure that aid is provided to those less well off in our community, to vulnerable Australians. Government can't do it all. I've seen over the course of the COVID-19 pandemic just how important our charities are in reaching different groups, different cohorts of people who weren't being given enough aid, not through any act of bad faith or anything but simply because they've fallen between the cracks for whatever reason, and our charities are always there to support them. That's a wonderful thing. Not only are our charities there to support those vulnerable people, but Australians are there to support the charities. That also is a great thing. That spirit of philanthropy, that spirit of generosity, goes to the very heart of what it means to be an Australian.

The second point I will make is in relation to tax deductibility. It is fit and proper that we as a civic society give an incentive to the private citizen to make a charitable donation, so I fully support the concept of deductible gifts which can be taken off your assessable income. I also think it's quite reasonable for the government and individual taxpayers who are donating to these charities to expect some sort of conformity and consistency with respect to the regulation of charities and those groups and organisations that get the benefit of deductible gift status.

It should be noted that in 2017 Treasury identified 28,000 different organisations—that actually surprised me—who qualify for the deductible gift recipient classification. Of those, 18 per cent were not registered charities—10 per cent were government entities and eight per cent were others who can transition to become registered charities. That's what we are talking about there. That's the field we're talking about—eight per cent of the 28,000. Those were the figures back in 2017. I think it is important that there's consistency in approach for deductible gift recipients and also for charities. Schedule 1 of this legislation seeks to promote that consistency.

What's the framework that those deductible gift recipients are being brought under? They are being brought under a framework that is absolutely appropriate in terms of the regulation of charities. Australia has a very robust system in terms of regulating our charities and ensuring—and the Australian people are entitled to be assured—our charities are well run, transparent and accountable. Of course this happens under the Australian Charities and Not-for-profits Commission Act. Under that act six standards have to be met by any charity. I want to run through those six standards.

The first standard is about the purposes and not-for-profit nature. A registered charity must be not-for-profit and work towards their charitable purpose. That charitable purpose must go to the heart of what that organisation does. The charity must be able to demonstrate this and provide information about their purpose to the public. So that charitable foundation has to go to the heart of the organisation.

The second standard is in relation to accountability to members. Charity members must be able to take reasonable steps to find out what the charity is doing. The charity has to be accountable to those members. Members have a legitimate right to raise concerns and issues and have those concerns addressed by the charity. A charity should not ever just be run for the benefit of a small group at the top. It needs to be accountable to the membership. That's absolutely crucial.

The third standard is about compliance with Australian laws. There was some discussion with respect to proposed regulations in that regard. I note for the record that at the moment charities must not commit a serious offence, such as fraud, under any Australian law or breach a law that will result in a penalty of 60 penalty units, which is currently $13,320 or more.

The fourth standard is about the suitability of responsible persons. Charities must take reasonable steps to be satisfied that its responsible persons, such as board or committee members or trustees, are not disqualified from managing a corporation under the Corporations Act. If you've been disqualified from managing a corporation under the Corporations Act, you shouldn't be on the executive board or a director of a charity. That should go without saying. If you can't be a director of a company, you shouldn't be a director of a charity.

The fifth standard is about the duties of responsible persons. Charities must take reasonable steps to make sure that responsible persons are subject to, understand and carry out the duties set out in this standard, including to act with reasonable care and diligence, to disclose conflicts of interest and to ensure that the financial affairs of the charity are managed responsibly. That's fair and reasonable. If there's an incentive for people to make donations to charities to provide them with a source of revenue and those charities get the benefit of that then the flipside is that there needs to be responsibilities and duties imposed on those who are running the charity.

The sixth standard is about maintaining and enhancing public trust and confidence in the Australian not-for-profit sector. I want to quote this, because this is really important. A charity must:

… take reasonable steps to become a participating non-government institution if the charity is, or is likely to be, identified as being involved in the abuse of a person:

(a) in an application for redress made under section 19 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth) (Redress Act) or

(b) in information given in response to a request from the National Redress Scheme Operator … under … the Redress Act.

I would like to take this opportunity to commend my very good friend—and I don't say that lightly, even under parliamentary privilege—Senator Smith in relation to the work that he's done in this space. I think it's incredibly important work, and I know how seriously Senator Smith treats that work and that it comes from the heart, which is so important to the survivors of those horrific events. I can remember how shocked I was seeing the list of Queensland based charities and not-for-profit organisations that had come within the National Redress Scheme. It was nearly everyone. It gives everyone cause for deep reflection.

So those are the six standards under which these deductible gift recipients are going to have to transition to the charitable legislation, and it's fit and proper that they should do so. But they'll also be given time to do so. They'll be given at least 12 months to make that transition, to get their paperwork together and to do all the things they need to, and that time can be extended in certain circumstances if the regulator sees fit. One of the scrutiny committees on which I've sat has also had something to say about those circumstances. I think it is fit and proper that there is a situation where the organisations can be given more than 12 months to make that transition if they need it. On that basis, I'm happy to support this bill.

6:52 pm

Photo of Deborah O'NeillDeborah O'Neill (NSW, Australian Labor Party) Share this | | Hansard source

I will make a contribution which goes to the part of the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021 that seeks to deal with offshore banking units. Before I do that, I want to respond to some of the statements from Senator Scarr, who I know takes his work in this place very seriously. As he's part of the committee that looks at legislation with great care, I always listen carefully to what he has to say. But I also listen carefully to people who go out into our community and act with charity, whether that's an expression of a particular faith's perspective, an expression of a particular philosophical perspective about the world and our place in it, or the Islamic call to give 10 per cent to care for others. We've got that going on all over the country right now. The people who are upset with the government for what it's proposing to do include none other than Anglicare Australia. Many St Vincent de Paul members have a few things to say about the government pulling a swiftie here. So we should be very careful to look at what the government is actually attempting with this piece of legislation.

I think we should be particularly mindful because of the warning—it's like a great neon sign that we should be looking at very carefully—that comes from Mr Gary Johns. He's the hand-picked guy that this government decided to put in charge of the ACNC as the commissioner. He's been no pushover, as I understand it. I didn't haven't any encounters with him, but I understand he's quite a serious and ruthless operator in his own way. But what he said about this is that there is no charity that has had its registration withdrawn due to activity of the kind that this government is purporting needs correction. So there are alarm bells and neon signs. We need to be careful about what's embedded in this piece of legislation, and I hope that we might get to the bottom of that as we move into the consideration in detail phase of this bill.

There is an important part of this bill that I rise to discuss today, and that is what's happening with the tax treatment of offshore banking units. I particularly want to speak to reforms on offshore banking units and laud the work that's done to remove tax breaks for offshore financial institutions. In this time of national debt that Australia has never before seen, and a great need to build up domestic capabilities, we should be closing these wasteful tax loopholes. The tax concession was initially started as an incentive to attract and maintain highly global financial sector activity. In particular, it was seeking to draw Hong Kong and Singapore. However, over the years, with so much change in the financial market, what's happened is that this has actually become a loophole that has preferenced harmful financial activities due to its low tax rate of 10 per cent and an interest withholding tax exemption on interest payments made by offshore banking units on eligible offshore borrowings.

It sounds like a great mouthful, and if you don't have much to do with offshore banking units it's a little bit unintelligible, but it's not good. In 2018 the OECD Forum on Harmful Tax Practices blasted this current regime and what it was doing, because it had the effect of attracting offshore businesses to Australia and it then provided them with ring-fencing to avoid Australian transactions from its scope. That's not good. That doesn't make us good international citizens.

So we've come to this reform three years later. This bill will ensure that offshore banking units will not receive any special taxation arrangements and will be subject to the applicable corporate tax rate that Australian financial institutions pay. While the OBU regime has effectively been closed since 2018, this bill will forever bury this tax giveaway and end all of the grandfathering of the scheme by 2024-25. So, effectively, this part of the bill I'm discussing is a correction and a long overdue reform that I wholly support.

However, as is the style and practice of this government, this is a reform that's coming too late and in a piecemeal fashion. What we've seen over eight years of government, with a failure to act on such a loophole as this, is that Australians are missing out on millions of dollars of tax revenue that slipped through these loopholes for overseas banking units. That has been going on year after year after year after year—count up eight and it ends up being an awful lot of money.

Labor has been working very hard to draw attention to this reality. We are very proud of the tireless work we've done in the financial sector space to constantly stand up to the financial services sector and for good practice in the financial services sector. It was Labor that pushed for the Hayne royal commission. People in this chamber stand up and make all sorts of claims along the lines of a former senator who said he was here to 'keep the bastards honest'. And this has been the official position of the opposition, which has constantly fought the government to protect Australian consumers and not let the reckless pursuit of private wealth for a few crush the dreams of everyday Australians.

Labor pushed the multinationals and the government for years and years to tighten rules around this multinational tax avoidance and to get these companies to just pay their fair share. There's nothing wrong with asking multinational companies to have the same standards as Australian companies and pay their tax. Labor pushed the government to support the royal commission into banks. But the government voted against that 27 times. And because they did that, because they perpetuated for so long a system that was replete with the widespread rorting of Australian customers, we really had to push to prompt an ethical reshaping of Australia's entire financial sector. Labor pushed for that inquiry into the auditing sector, which promoted a complete rethink of how Australian companies are audited. The inquiry looked at the conflicts of interest in auditing between the work of consultants and the work of auditors from the big four professional services firms. That was a great piece of work undertaken by the Joint Committee on Corporations and Financial Services. The report was really a road map for this government to take action. But, as this government does so often, the work got done, the government was given the plan and then the government forgot to show up for work. They don't get on with the job of doing the things that need to be done to make life better and safer for people in Australia.

The Australian people look to Labor to stand up for social justice and equity, certainly in the workplace but also in the marketplace. A healthy and functioning business environment is vital to the creation of jobs and the opportunities that those jobs give all Australians to grow and fulfil their potential. We, as the Labor Party, understand how vital people's retirement is. In the absence of dignity in retirement for too many Australians we created superannuation for Australian workers. Right now we are firmly invested in an ethical financial sector to ensure that the retirement incomes of millions of Australians are managed in an ethical and efficient way that benefits them, their families, their lives and their communities. We could all benefit from ethical practice in the financial sector, rather than a few benefiting with impunity. I support our financial services sector to continue to be a world leader and grow in its role as a financial services centre for the Asia-Pacific region. As fintech providers keep innovating and digital wallets become more commonplace than leather ones, I think that regulation needs to keep pace to ensure Australian consumers are protected. It's a solemn role of this government to safeguard their interests, and I'll always fight to ensure consumers are heard.

In a recent inquiry conducted by the corporations and financial services committee—and I see Senator Hume nodding—we looked into what was happening in the digital wallet space. I have to say it was quite concerning to find out that 80 per cent of the transactions in the country occur on Apple phones and that 20 per cent happen on android phones. That is because the profile of people who own these Apple phones tend to be people who have a bit more money. With these older phones, we put our thumb on the icon and point them generally at the reader. There's a little chip in the corner, the digital message goes across and all of a sudden your money is transferring. The government need to be paying attention to what's going on there because in the infrastructure between where you put the chip on that little reader and the person who sells you a good or product gets the money is completely outside any regulation in this country. The ACCC don't know what to do with it; it's just a mess. There's nobody carefully watching what's going on. Because of COVID-19 we've had a massive increase in the number of people using digital technology to pay for things. Just a couple of years ago about 24 per cent of transactions were using that technology, and it's going to be over 51 per cent by the time we get to the end of the year. In jurisdictions that are pretty similar to us, they are up to about 80 per cent of transactions using digital technology, so it's important that our government is on to this stuff.

I know that there was a review in October last year that was heralded: 'Hurry up, we've got to find out about what's going on in the financial space.' A good friend of the Treasurer's and one of his former colleagues, Mr Farrell, was apparently commissioned to do a second report for the government. It was supposed to be due in April. It didn't land on the Treasurer's desk until 1 June. Here we are, just about hitting September, but there's no sign of the report. We've got problems that are happening as I speak tonight. How many people will have used that technology while the government's not paying attention? That's why this legislation that deals with overseas banking units is actually too late to be good governance, but at least it's finally being done. Too often the government is found wanting in this space, where good action should be taken.

I contrast that with Dr Gary Johns's very significant neon signal that the government is doing something pretty dodgy with regard to charities—so dodgy that charities like St Vincent de Paul, Anglicare and other agencies that we know so many people in our community rely on are saying: 'Do not allow the government to put in regulation that's going to change what we are able to do, do not put a lot more red tape in place and do not attack us,' because that's what's happening, to the point where they put out an open letter.

So, with regard to this bill and what it does in terms of making sure that Australians can no longer be ripped off by overseas banking units, I will vote for this bill. I'm glad to vote for it and to finally close one of the most generous loopholes in our taxation system, a loophole that has been open for far too long. I look forward to working with all those in this place to ensure there is an ethical financial sector that makes money in an honest, non-exploitative way; one that pays its fair share of taxes; and one that, in this changing time of switching to a digital economy, is considered in a way that anticipates the exploitation of Australian small business owners and their customers, who deserve much better care, consideration and protection from this government than they are currently being afforded. This is too late. Everything's not a race to this government, but, in the end, the people who pay the price for it not doing its day job properly are the Australian people.

7:06 pm

Photo of Susan McDonaldSusan McDonald (Queensland, National Party) Share this | | Hansard source

[by video link] I rise to speak in support of the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021 and changes to offshore banking unit rules as they apply to groups wanting to register for the status of a deductible gift recipient. This measure makes changes to the Income Tax Assessment Act 1997 to require non-government entities seeking endorsement as a deductible gift recipient to be a charity registered with the Australian Charities and Not-for-profits Commission or operated by a registered charity. Ancillary funds and specifically listed entities will be exempt from this requirement.

Charities and charitable bodies operate best when they have the full trust of the public, and this bill seeks to reinforce the framework on which that partnership is built. These changes are designed to help the affected entities and their donors by making absolutely clear the entity's tax-deductible status. It is similar to how some companies stamp their products with 'RSPCA approved' or with the Heart Foundation tick. Doing that is reassuring to the people handing over their money, because the product carries a stamp of an official certifying authority.

With deductible gift recipients, this bill grants some rolled-gold government-recognised status as a legitimate operation people can confidently donate to. It will also improve the consistency of rules governing deductible gift recipients, providing clarity and improving efficiency so that they can maximise the time spent on helping their chosen causes. The requirement to be a charity already applies to the majority of the general DGR categories in tax law. This measure will amend the special conditions applying to other general DGR categories. This measure takes effect three months after the bill receives royal assent. The 12-month transition period will provide non-charity DGRs with times to meet the requirements for charity registration without losing their existing status.

I have touched on just a few of the details in the legislation, because I think it has already been so well covered by the always gracious Senator Scarr, but I do want to touch on some of the other points that have been made, particularly around the multinational tax avoidance. It has to be acknowledged that we are a global leader in the international fight against corporate and multinational tax avoidance. From 1 July 2016 to 30 April 2021, the ATO raised around $21.5 billion in tax liabilities against large public groups, multinational corporations, wealthy individuals and associated groups. Of this, $13.5 billion in liabilities were raised from multinationals and large companies. So this has generated cash collections of around $12.5 billion already.

Since 2016, we have implemented more than a dozen measures to address corporate and multinational tax avoidance. This includes adopting the actions recommended by the OECD and G20: base erosion and profit shifting, including country-by-country reporting; hybrid mismatch rules; antitreaty abuse rules; strength transfer pricing rules; signing multilateral instruments; adopting other measures beyond BEPS, including a multinational anti-avoidance law which ensures companies do not avoid a taxable presence in Australia; diverted profits tax; double penalties for multinationals that seek to avoid tax; imposition of tax conditions on foreign investors; and strengthening thin-capitalisation laws. Enhanced whistleblower protection has been enacted to limit disincentives for individuals to report tax misconduct to the ATO. The MAAL has meant an additional $8 billion of sales revenue being booked in Australia each year. So Australia has played a key role in driving the agenda on the OECD G20 process. We are on the BEPS steering committee and have contributed to every G20 meeting where this has been discussed and have implemented the recommendations. These are really important points to make.

I listened with interest to those opposite. I listened to the increasingly breathless hyperbole about what should have or could have happened at the beginning of COVID. I think we all recall the dark days of March 2020, with the terrible uncertainty of the pandemic. What would it mean to people's security? What would it mean to their ability to put food on the table? The introduction of JobKeeper and JobSeeker was massively welcomed by Australians at all levels, even at the most basic level of ensuring mental health security for people who just didn't know what was going to happen next.

So the appalling attack by the opposition on the very sensible approach that was taken during those dark days just beggars belief. It seems that they have forgotten their own stimulus package of the Rudd days of 2009 when they too understood that there is a time for stimulating the economy and providing security to the people of Australia. The opposition seem to think there are only two jobs in leading a government and, of course, that is not only not true; it gives you much discomfort to think about them ever holding the Treasury positions, because they just truly don't know what the job entails. I commend this bill to the Senate.

7:12 pm

Photo of Rex PatrickRex Patrick (SA, Independent) Share this | | Hansard source

[by video link] I rise tonight to speak on the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021. I'm not going to focus on the substantive aspects of the bill but rather on the amendment that has been foreshadowed for the committee stage by Senator McAllister. I will start by saying that Senator Scarr has risen in this debate and has presented a perspective and I will come to that in a short while. Everyone seems to like Senator Scarr. I'm wondering if he is trying to take the trophy off Senator Dean Smith. We will have to see as a function of time what happens in that space. But Senator Scarr did rise and speak about the benefits of the JobKeeper program.

I think everyone around the chamber would agree that JobKeeper was a necessary measure during COVID-19. There's no question that there were companies that absolutely needed to have a hand up or, indeed, a handout from the government to help them through a most difficult time. No-one begrudges those companies for having taken that money. We have to remember that the purpose of the program was, in fact, to try and maintain a connection between employers and employees, and it was effective in doing that. We didn't put in place a lot of constraints or controls. Part of the problem we have found ourselves in is that the government were mindful of the need to assist without having too much red tape and allowed companies to estimate what their profits and turnover might be moving forward. And everyone had a right to basically say, 'Things look pretty grim.' There's no issue with the approach that was taken by the government. However, we now know that there are a number of companies that have come through the other side of the pandemic with increased profits, which they've then directed at bigger dividends and executive bonuses. So what's happened here is that we've taken taxpayers' generosity, through the JobKeeper program, and basically funnelled that into the pockets of investors and the pockets of executives. That was never what this money was intended for.

I agree with Senator Scarr that none of these companies has broken any law; the law was created very loose, and that was done because of the uncertainty moving forward. But now it is incumbent upon the company directors, those who have taken the money and then managed to make a much larger profit than what they already had, to return money. We know from analysis that is being done by the PBO that the amount of money we are talking about is in the order of $12½ billion—$12½ billion that was handed over to companies who, in the end, did not need it.

The proper thing for all of these companies to do is to hand back that money. I'm talking about the companies that did better as a result of the circumstances of the pandemic. The taxpayer doesn't want money back from companies that struggled; I don't mind the fact that they've helped them out. But the companies that did well need to look long and hard at themselves. One of the ways we can assist them in doing so is to make public exactly how much each company received so that it's very clear who received JobKeeper and how much they received. That can be looked at in relation to how well they did, and we can use that to encourage companies to repay money.

We know that this has worked in New Zealand. In Australia, you can go onto a New Zealand government website—people can use Google to look for a site that goes to their wage subsidy programs—and type in the name of any company that is operating in New Zealand, including Harvey Norman and Qantas. It will tell you exactly how much they received in New Zealand's equivalent of JobKeeper and other assistance money, and, where it is a wage subsidy, how many employees were involved in the transaction—whether it was 100 employees or 200 employees. You can see that information. This is not information that is sensitive to companies; it is taxpayers' information; it's the amount of money the government has handed over. New Zealand has managed to get back five per cent of the moneys paid under its program. How much have we got back in Australia? We have got back 0.25 per cent, just a fraction. And the difference between the two countries is simply transparency—turning on the lights and letting everyone see and make their own assessment. That has brought about a return of money that can be used for many other things—many important things that we need in society.

We regularly come into this chamber and see cuts being made to programs. Just imagine what $12.5 billion could do. That would be of great assistance. That's why we can't turn our backs on this. That's why we need to look at what happened here. Again, I'm not suggesting companies have broken the law, but they have a moral obligation to return money that was provided to them for a different reason—money that was generously given to them by the taxpayer for a particular purpose—

Debate interrupted.