Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

Noting I did speak on this last night, I'm just focusing on the amendment that will be moved by both Labor and me that seeks to direct the tax commissioner to disclose the amount of JobKeeper that has been paid to companies that have a turnover of more than $10 million not just retrospectively in terms of companies that have received it but also in relation to companies that will receive additional payments under the coronavirus measures passed in the previous sitting week. I did mention—and I wanted to clarify this from my contribution yesterday—that in terms of companies that have received JobKeeper that didn't meet the prerequisites of a 30 per cent or a 50 per cent fall in revenue, that equates, according to the PBO, to about $12.5 billion.

Again, I'm not in any way disturbed by companies that made a projection that they would lose 30 per cent and didn't quite lose that amount but received JobKeeper. I have no issue with that. I have a difficulty with the egregious behaviour of companies who took JobKeeper and then did much better than they have done in previous quarters, and that amount equates to $4.6 billion of taxpayers' money. That is money that can be used for other things. Again, I don't say that companies have engaged in anything unlawful; they simply complied with the rules. But they all know that they have taken taxpayers' money for something for which it was never intended. So I thank Mr Leigh in the other place for the work he has done on this with the PBO, through his speeches and also publicly. It's a very important issue.

When we get to the committee stage, the Senate will, I think, have two opportunities to vote in favour of disclosure of this information. I think every Australian wants it to be disclosed. We might see that we have a much greater return from companies that have been in receipt of JobKeeper and didn't actually need it.

Claire Chandler (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Treasury Laws Amendment (2021 Measures No.2) Bill 2021. I have been listening to the debate on this bill over the last few days. It has been a great opportunity, with the amendments, to come into this place and talk about all of the hard work and important policies that have been developed by this government to guide Australia through the economic crisis that has resulted from the COVID-19 pandemic and is still impacting on communities across the country.

One of the words that we hear thrown around so much regarding this pandemic is 'unprecedented'. Certainly we know that it's been a good century or so since Australia last had to deal with a pandemic illness of this nature, and, when we are dealing with an unprecedented situation, the economic response obviously has to evolve over time. I have quite regularly come into this place and spoken about the unprecedented nature of the pandemic and the unprecedented nature of the government's response to it. It has changed over time, quite markedly—from January and February last year, when we were first recording cases on the mainland, to understanding what impact border closures and lockdowns were going to have on our community and on our economy. Of course, coming into this year we had a brief moment of opening up again and a brief moment of hope before being plunged back into lockdowns due to the delta strain, which, again, has been something that we have had to learn about and quickly adapt our policies to. I know that the way the government has responded, particularly on the economic front, has been very well received.

We understand that Australians facing lockdowns are asking questions about their incomes and the weeks ahead and what the pathway back to normal life looks like. I've certainly sensed that within the Australian community, particularly within the Tasmanian community. It's perhaps not well understood by the mainland states that have been dealing with lockdowns, but in Tasmania, where we haven't had lockdowns—at least not since the really early days of the pandemic, back at the start of 2020—our businesses are still hurting incredibly as a result of the lockdowns on the mainland, particularly our tourism businesses. I've had the opportunity to speak to a number of operators in the last little while to understand the struggles that they are facing without having the visitation, particularly from Victoria and New South Wales, that we otherwise would have had. Those businesses are hurting, and that is why the Morrison government has worked with the Gutwein state Liberal government in Tasmania to deliver a $20 million business support package for local businesses in our state. This package will give much-needed relief to Tasmanian businesses struggling with the ongoing impacts of border closures to our biggest visitor markets. The support will target businesses operating in the tourism, hospitality, arts, events, seafood and transport sectors, as well as those that have been impacted directly by reduced interstate visitation. For those businesses, financial support of between $2,000 and $10,000 will be available if they have suffered a 30 per cent decline in their turnover. I'm certainly hearing from some businesses that, as a result of the lockdowns on the mainland, there have been incredibly drastic downturns in the consumer business that they had enjoyed in the last little while.

As a government we know that there is more to be done to support our businesses during the COVID-19 pandemic. Like I said, our approach has had to continually change and pivot and evolve, just as the virus has continued to change and pivot and evolve. We will continue to monitor the situation and we will continue to provide support to the businesses, in particular, that need it. But I think it is important to note and echo the words of the Treasurer, Josh Frydenberg, and indeed the Prime Minister, Mr Morrison, that we can't stay in lockdown forever. Our businesses can't survive if we stay in lockdown forever, and there will come a point where we come out of lockdowns and see the end of these border restrictions. It is absolutely contingent on our vaccination rollout, and that is, again, something I've spoken about in this chamber many times before. I urge all Australians to go out and get vaccinated once they become eligible. It is that which will stop the lockdowns and the border restrictions. The plan has been agreed to and set by the national cabinet, and I, along with so many Australians, am looking forward to enjoying a little bit more freedom, hopefully by the end of 2021.

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (2021 Measures No.2) Bill 2021. This bill makes a number of important changes to laws to implement reforms to the administration and oversight of organisations that have deductible gift recipient, or DGR, status, and it also delivers on the Morrison government's commitment to amend Australia's offshore banking unit regime to address concerns raised by the OECD Forum on Harmful Tax Practices.

The bill is made up of two schedules. Schedule 1 amends the Income Tax Assessment Act 1997 to require non-government entities to seek endorsement as deductible gift recipients to be a charity registered with the Australian Charities and Not-for-profits Commission, the ACNC, or operated by a registered charity. Ancillary funds and specifically listed entities will be exempt from this requirement. The requirement to be a charity already applies to the majority of the general DGR categories, and this measure will amend the special conditions applying to the remaining general DGR categories. The majority of the general DGR categories currently have a special condition requiring that the fund authority or institution be a registered charity or an Australian government agency or to be operated by a registered charity or an Australian government agency.

For the remaining 11 general DGR categories, these requirements do not need to be satisfied for the fund authority or institution to be entitled to DGR endorsement. These categories can include organisations on the Register of Environmental Organisations and the Register of Cultural Organisations. As charity registration is not a precondition for DGR endorsement for these categories, there can be inconsistent governance and reporting requirements for these DGRs. Making charity registration a precondition for DGR endorsement across the general DGR categories will improve the consistency of regulation, governance and oversight of DGRs whilst also reducing unnecessary compliance.

Fewer than 2,000 entities are expected to be affected by the changes. These amendments do not affect ancillary funds or funds specifically listed by name as DGRs. When the amendments take effect, DGR applicants generally must register as a charity with the ACNC before applying for DGR endorsement. In practice, there will be a streamlined process 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. 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 Australian tax office to assess the applicant's entitlement to DGR endorsement.

To be eligible for registration as a charity with the ACNC, the entity must: have an Australian business number, an ABN; be able to demonstrate its charitable purpose and not-for-profit character through governing documents or other means; provide the details of people responsible for the governing entity; have only charitable purposes or purposes ancillary to charitable purposes; provide other relevant information periodically such as financial information; be able to demonstrate compliance with the government's standards and external conduct standards if applicable; and, importantly, not be covered by a decision in writing made by an Australian government agency under an Australian law that provides for it to be characterised on the basis of it engaging in or supporting terrorist or other criminal activities. The schedule also amends the definition of 'environmental organisation' and 'cultural organisation'. These amendments provide that a fund, authority or institution must be registered to be listed on the Register of Environmental Organisations or the Register of Cultural Organisations.

Schedule 2, as I said earlier, looks at the offshore banking units regime. It addresses the concerns of OECD and European Union countries about offshore banking or the OBU regime. Action to amend the OBU regime to remove the effective concessional tax rate is necessary to avoid future sanctions that would have adverse outcomes for Australian financial markets. The existing OBUs can continue to access the concessional tax rate for the next two income years to ensure a smooth transition process. The OBU regime is closed to new entrants.

I commend the bill to the Senate.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I rise to contribute to the debate on the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, and I do so having circulated an amendment to this bill. This is at a time when we are talking about what this place and the government need to be doing to help in relation to COVID for businesses and individuals, including workers who are struggling under the restrictions that have obviously been put in place for health reasons but that are nonetheless having an impact on particular sectors.

One of those sectors, of course, as we've known for a long time—in fact, since the very beginning of when COVID hit here in Australia—is our live performance, music and arts sector—our entertainment sector. Those in this sector were the first to be hit by the restrictions of COVID. They were shut down overnight. One day they had scheduled shows, festivals and events, and the next day they were told that the limits on numbers and venues meant that they would have to shut down. That was over 12 months ago—in fact, it was 18 months ago—yet we've still seen very little coming forward from this government to help this sector.

One of the main issues, as we go through these various different phases and stages of dealing with COVID and managing the various different restrictions—the border restrictions and the different types of lockdowns—is, of course, the boom-bust nature of events that are being organised. It is still the fact today that event organisers—whether in the music industry or in other forms of entertainment; whether they're festivals big, small or in between; and whether they're suburban, metropolitan or the many, many festivals that bring light, culture and a buzz to our regional areas—have found it very difficult to exist without much certainty.

One of the biggest problems, of course, is planning. If you can't access any type of insurance, it's very difficult to plan anything into the future. What we're now hearing from the music and entertainment industry in particular is that, even in trying to plan for things in stage B or when Australians reach those crucial vaccination targets where things hopefully—fingers crossed—will be able to be opened up again safely, they're finding it very difficult to plan without access to proper insurance. Time and time again, events are being shut down overnight, and the cost of that is being left mostly to small businesses that have been wrecked and smashed over the last 18 months. It's very difficult for them to have any capital to rely upon. So what we are facing is a sector that is already smashed, that is struggling and that still can't plan. We've got big insurance companies making it near impossible for small businesses and those involved with events, whether they're musicians or entertainment promoters, to access insurance, with huge price-gouging premiums which simply cannot be afforded, if indeed that type of insurance is available.

I know we've debated these issues many times in this parliament. But, again, 18 months on, the government has not addressed the very dire need for it to address this issue. That is why the amendment that I foreshadow I will move in the committee stage addresses this issue. The amendment directs the minister to put in place an insurance guarantee. This isn't going to cost the taxpayer any money—in fact, it probably won't even cost the government money and it might actually make the government some money. The government will simply act as an underwriter of an insurance scheme because we can't trust the big insurance companies. They are screwing these small businesses to the wall, and these businesses simply don't have any access to affordable insurance. It's not the fault of the small business or the music promoter that they organise an event and it gets shut down overnight with all costs laid at their feet because a state government decides to close its borders, or indeed an outbreak of COVID happens and the health restrictions kick in. These costs shouldn't be borne by those individual small businesses. These costs should be something for which, if government's not going to cover them directly as compensation, at least the government will put in place an insurance scheme. That's all the sector is asking for. It doesn't cost the taxpayer anything; it doesn't cost the government anything. It is just asking the government to address what is clearly a market failure. I look forward to debating these issues when we get to the committee stage and I commend the bill, with these amendments, to the Senate.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

[by video link] I wish to speak on the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021 and I indicate that the Greens do support this bill. Of course we support measures to improve the integrity around eligibility for status as a deductible gift recipient and we also support the measures to remove the concessional treatment of offshore banking units, which is one very small step towards making our tax system something other than a playground for multinational tax avoiders. I indicate to the Senate that I will make a contribution in the Committee of the Whole in regard to the amendment on sheet 1387 foreshadowed by Senator McAllister. I can indicate now that we will be supporting that amendment, but we will have some comments that I will make in regard to both that amendment and Senator Patrick's amendment.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

There is lots to talk about in the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021. People who are listening to the Senate's proceedings might be a little bit confused because, when you hear some of the contributions from Labor senators and from crossbench senators, you might think one of two things. The first thing you might think is that the JobKeeper program has been unsuccessful. Nothing could be further from the truth, and I'll talk about that in a moment. The second thing you might think is that the government's doing nothing in regard to tackling multinational tax avoidance. Of course, again, nothing could be further from the truth.

As we move through the pandemic and as we move further and further away from the beginning of the pandemic, it won't be a surprise for people to understand, to come to an appreciation, that certain myths and mistruths will start to be generated about the success of the government's initial economic responses to the pandemic. I think any fair minded person would understand that the government's early economic response was timely, it was effective and, of course, it was very, very necessary. I think the JobKeeper program stands out as a beacon to that timeliness, that success and that precision in regard to the government's economic initiative. I think it's worth putting on the record the success of the JobKeeper program and to dispel some of the commentary that we've heard in and around this particular debate.

Let me begin by reinforcing the fact that any fair minded person, any fair minded senator, would understand and appreciate that the JobKeeper program has been a vital, and some might even argue the most vital, economic lifeline for many millions of Australians as they entered the pandemic—3.8 million Australians and around one million businesses were supported by the JobKeeper initiative. Small- and medium-sized businesses represented 98 per cent of all JobKeeper recipients. That's an important statistic for a party like ours, like the government, that prides itself on being quick to support small- and medium-sized businesses in our country, particularly when so many of them are family run and family owned.

I think it's also important to draw to people's attention that 90 per cent of JobKeeper recipients were microbusinesses with turnovers of under $2 million, eight per cent went to small- to medium-sized enterprises with a turnover of between $2 million and $250 million, and only 0.2 per cent went to large businesses—that is, with turnovers of greater than $250 million. According to the Reserve Bank of Australia, JobKeeper has saved at least 700,000 jobs in the period April to July 2020. Of course we reflect on lives lost, tragically as a result of the pandemic. As we watch it unfold not just in this country but internationally, I think it's important to recognise that the JobKeeper program saved 700,000 jobs and put the minds of many Australians and their families at ease.

It's also worth re-emphasising that Treasury's three-month review found that the program was 'well targeted'. I might just read, for the sake of the Senate and to put this into proper context, some of the contributions that we've heard in this debate thus far. The JobKeeper payment three-month review said—and you can see it for yourself at page 7:

the payment went to businesses that experienced an average decline in turnover in April of 37 per cent against the same month a year previous (compared with a 4 per cent decline for other businesses) ); and it went to businesses at which the job separation rate had doubled following the introduction of operating restrictions just before JobKeeper was introduced (compared with no change in other businesses).

Clearly it was a successful program. But it's worth emphasising again what the Governor of the Reserve Bank of Australia said. He said:

I think the JobKeeper program is really about keeping people in jobs, isn't it? It's done a remarkably good job at that.

So, as we move through the pandemic and as the government calibrates its economic and other responses, I think it's important that we don't revise the history in a way that seeks to unnecessarily distort what has been a necessary and effective response from this government in the early stages of the pandemic.

It's worth restating that Australia was the first advanced economy to return to pre-COVID employment and activity levels. Australia recorded an unemployment rate of just 4.6 per cent in July 2020, the lowest level in over a decade. Notwithstanding this success, Labor's Shadow Treasurer is obsessed with wanting to find fault and error with the JobKeeper program. The Treasurer and the Prime Minister 'have been sprung' sending JobKeeper money to 'dead people', the Shadow Treasurer said. These are 'humiliating revelations' about JobKeeper, Josh Frydenberg and Scott Morrison, Labor's shadow Treasurer said. Labor's shadow Treasurer said on 29 January 2021:

They are humiliating revelations because Morrison and Frydenberg have spent much of the last 10 years banging on about cheques for dead people during the global financial crisis, so they have a lot of explaining to do.

Labor's shadow Treasurer has been constantly refuted. On 30 January 2021, just a day after Mr Chalmers made those comments, the ATO released an official statement, which can be found on its website, to clarify what it called recent media commentary about incorrect JobKeeper payments. Let me share with the Senate what the ATO's statement said. First it said, 'The ATO is not aware of any ultimately successful claim for deceased or other fictitious employees.' Second the ATO media statement said, 'Where claims including fictitious employees are identified, no JobKeeper payments are or have been made.'

Where else can we look to find evidence that Mr Chalmers's comments are false? We can look at the Australian National Audit Office. The Australian National Audit Office reports get used very regularly in this place by Labor senators and other senators to try to undermine confidence in much of what the government is doing, so let's look at what the Australian National Audit Office said in regard to the JobKeeper program. The Australian National Audit Office report on the ATO's management of risks related to the rapid implementation of COVID-19 measures, which was released on 14 December 2020, found three important things.

Firstly it found, 'The ATO has been effective in managing risks related to the rapid implementation of COVID-19 economic response measures.' The Australian National Audit Office found that the ATO had managed 'fraud and other integrity risks on a progressive basis'. Finally, the Auditor-General did not find it necessary to make any further recommendations. That is good news for the management of the JobKeeper program and is a clear rebuttal of the comments Labor's shadow Treasurer made on 29 January this year in seeking to undermine public confidence in what has been a very important and very necessary economic measure—one that has been applauded in many other places around this country and internationally. Mr Chalmers, Labor senators and crossbench senators should have the decency to recognise that it came at a very significant time early in the pandemic and brought considerable relief—some 700,000 jobs were saved and, importantly, businesses were given a lifeline.

If time allows, I will refer to another point that has been made—and I think Senator O'Neill might have made this contribution; certainly crossbench senators made this contribution—in relation to multinational tax avoidance. If you listened only to the contributions of crossbench senators and Labor senators, you would think that the government was doing nothing in tackling multinational tax avoidance. Nothing could be further from the truth. Australia is a global leader in the international fight against corporate and multinational tax avoidance. Since 1 July 2016 till 30 April of this year the ATO has raised around $21.5 billion in tax liabilities against large public groups, multinational corporations, wealthy individuals and associated groups. Of this, around $13.5 billion in liabilities was raised from multinationals and large companies. The suggestion that often gets made in this place and outside it that the government is doing nothing to tackle multinational tax avoidance, that no multinationals pay tax in this country, is clearly untrue. This has thus far generated cash collections of around $12½ billion.

I could go on, but I think it's important, as we bring this debate to a conclusion, that senators in this place and people that are listening to the contributions understand that the JobKeeper program has been tremendously successful; it came at exactly the right time as an economic lifeline for our country. The suggestion that is often made in this place that the government is doing nothing to tackle multinational tax avoidance and is raising no taxes from multinationals is absolutely false.

Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Link to this | Hansard source

I would first like to thank those senators who have contributed to this debate today and yesterday as well.

Schedule 1 to the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021 amends the Income Tax Assessment Act 1997, referred to as the 1997 tax law, to require a non-government entity seeking endorsement as a DGR to be a charity that's registered with the Australian Charities and Not-for-profits Commission, or to be operated by a registered charity. Ancillary funds and specifically listed entities will 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. This measure will amend the special conditions applying to the remaining general DGR categories requiring non-government entities to maintain charity registration in order to retain their eligibility for DGR endorsement. These amendments include a 12-month transition period, which will provide non-charity DGRs with the time to meet the requirements for charity registration without losing their DGR status. Eligible DGRs may also have access to an additional three-year transition period. This measure will improve the consistency of regulation, governance and oversight of deductible gift recipients, in turn helping to support the continued confidence in the sector and, of course, public support for DGR entities.

Schedule 2 of this bill contains amendments to the Income Tax Assessment Act 1936 that remove the preferential tax treatment provided for offshore banking units, commonly known as OBUs, and provide transitional arrangements for existing OBUs. In October 2018, the OECD's Forum on Harmful Tax Practices found that Australia's OBU regime contained some harmful features. As a result, the Treasurer announced, on 26 October 2018, that the government would seek to address those concerns of the OECD, and the OBU regime has been closed to new entrants since the Treasurer's announcement. Passing this bill will allow the OECD to confirm that Australia has amended the OBU regime to ensure that it is not what is known as a 'harmful tax practice'. This is consistent with the Morrison government's ongoing support for international tax integrity, and it will protect Australia from potential reputational damage and other possible consequences. Most importantly, this bill provides for two years of transitional arrangements to assist existing OBUs to transition away from the regime.

I note that there is a second reading amendment that has been tabled by the opposition. I should make it very clear that the government, of course, will be opposing the opposition's second reading amendment. That amendment has two components. One is essentially irrelevant: it refers to issues in the charity sector that are well outside the scope of this particular bill and is simply a pious amendment. The other element of that second reading amendment is simply about multinational tax measures, which I think my colleague and the whip described particularly well. The amendment suggests that the government has failed to curtail the use of tax havens and tax avoidance schemes by multinationals, but nothing could be further from the truth. In fact, we are a global leader in the international fight against corporate and multinational tax avoidance, and, since July 2016, the ATO has in fact raised around $21.5 billion in tax liabilities against large public groups and multinational corporations.

Carol Brown (Tasmania, Australian Labor Party, Shadow Assistant Minister for Infrastructure and Regional Tourism) Share this | Link to this | Hansard source

Minister, it now being 12:15, the debate is interrupted, and you will be in continuation.