Michael Johnson (Ryan, Liberal Party) Share this | Hansard source

This bill is about taxation. Schedule 1 applies  to temporary residents exempting their foreign investment income from Australian taxation. The exemption is confined to foreign sources of income only and does not apply to Australian sources of income, ensuring that the measure does not disadvantage Australian employees compared with temporary residents. This amendment will allow business greater opportunity to attract internationally mobile skilled labour to Australia by reducing the costs to Australian business of bringing skilled persons to work in Australia.

This issue of bringing skilled workers to Australia is highly relevant at this time because of the very low unemployment rates we have in this country—five per cent, almost 30-year lows. It is a challenge for Australian businesses and employers to try and get highly skilled labour into this country. As a government we must do all we can to encourage into this country skilled migrants who will value add, who will contribute to the furthering of this nation’s prosperity. That is why that amendment is particularly important. Currently, the extra tax costs of hiring mobile skilled labour are often passed onto the employers, which of course means that they pass them onto the customers and onto their clients, so this is highly relevant in that context. It also has the advantage of making it easier for Australian businesses to relocate key staff to Australia.

Schedule 2 gives effect to the systemic treatment for business black hole expenditures, as announced in the 2005-06 budget. It provides a new five-year write-off for business capital expenditures not taken into account and not denied a deduction elsewhere in the income tax law. Capital expenditure incurred in relation to a past, present or prospective business will be deductible to the extent that the business was or is proposed to be carried on for a taxable purpose.

Schedule 3 will deter the promotion of tax avoidance and tax evasion schemes and protect the integrity of the product rulings system administered by the Australian Taxation Office by introducing a civil penalty regime. As a government and as a parliament all of us should be doing everything we can to encourage tax receipts to be fully paid. We do not condone Australians avoiding tax or trying to evade tax. That is not part of the compact between all of us as Australians. So it is not only important as a measure of running the country but it has an ethical or moral dimension to it that those who are required to pay their taxes do so legitimately and entirely.

Promoters will now be at risk of civil penalties imposed by the Federal Court in situations where their clients are already at risk of penalties under the tax laws for participation in tax avoidance schemes. The Commissioner of Taxation will be able to seek injunctions and enter into undertakings with promoters to stop the promotion of unlawful schemes. I know that the Commissioner of Taxation has taken a bit of a bashing from members of parliament from time to time. He does hold an independent office. I think it is important that whoever holds that position is mindful of the enormous powers that he has as well as being mindful that with the positions of Australians, whether they are in business or pay-as-you-earn employees, the corresponding degrees of influence are quite stark. It is important for him—or her, in the future—that he is mindful of his position and the enormous responsibility he has to this country. I am sure that all the commissioners of taxation are people of integrity and are aware of their significant office in this country.

As the local member, from time to time Ryan residents come to me to talk about taxation difficulties and problems they are having with the ATO. It is important not only that we represent them as members of parliament but that we from time to time remind the commissioner not to be too remote from everyday Australians. It is quite easy for highly paid, highly important officers of the government or of the Commonwealth to sometimes forget everyday Australians throughout this country when it comes to taxation issues. This amendment bill gives him important provisions to stop the promotion of unlawful schemes. According to the explanatory memorandum:

Schedule 4 to this Bill amends ... A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to ensure that certain prepaid phone products are treated as ‘eligible vouchers’ for the purposes of the GST Act.

Also, it will ensure that GST is paid on the face value of a voucher when it is used. The amendment does not alter any definitions under the act but simply confirms the policy intent that the GST will be applied to these products when they are used and not when they are sold. As the amendment confirms the industry’s existing practice as treating phone cards as eligible vouchers, it applies retrospectively from 1 July 2000. This amendment is primarily designed to provide consistency between industry best practice and the legislation.

These are important schedules. These are important points that need to be drawn out in the parliament, and I draw them out for the benefit of my constituents. In the context of broader taxation related matters, the government introduced with great courage and great integrity the taxation reform packages, which included the GST, and the people of Australia endorsed that policy initiative by re-electing the government in 1998 and 2001.

I think it is a strong reflection of what politics is all about and what policy is all about. It is to make a difference. The GST has made an enormous difference to this country’s governance. We all know that the state governments receive entirely every dollar of GST revenue. Not a single dollar comes to the Commonwealth at all and not one single dollar comes into federal consolidated revenue. In Queensland, my home state, the GST amounts to some $7.7 billion in revenue for the state Labor government of Peter Beattie. Again, in the parliament, I encourage him to spend that money on vital projects in health, infrastructure and roads. In my electorate Moggill Road is important.

We know that the GST goes to the states. In question time not too long ago the Treasurer again reminded us of the recently appointed Premier of Western Australia saying that the GST, as a measure of the sweeping taxation reform initiatives of the Howard government, was all about the national interest. I think it is important for us to remind ourselves, as well as our constituents and the wider Australian community, of how important taxation reform is to this country. It does make a difference.

As I have said, politics is all about making a difference. Politics is about improving the lives of our fellow Australians. We are highly honoured to be members of this parliament. Since Federation there have been only 1,000 men and women of Australia who have had the great privilege of coming into this parliament. I, as the fourth member for the federal division of Ryan, every day remind myself of the great privilege that I have in being a member of this parliament. On this historic day, I rededicate myself to serving my constituents—as I am sure all members of this House do to serving their respective electorates—and I know that the Howard government also recommits itself to governing in the interests of our country.

We are here for that purpose. Service in political life is a noble profession. It is a highly important one. It affects businesspeople in the country, it affects mums and dads, it affects schoolchildren and it affects funding for schools, funding for hospitals and funding for roads. It affects every facet of life and it is important that we keep our eye on the ball, which is why the government has had the faith of the Australian people on four successive occasions. This coalition will continue to work together very strongly and very positively in the interests of our fellow Australians. I commend this important bill to the parliament. It continues the hard work of the government and it continues the ideas of the government in the service of the Australian people.

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