Kelvin Thomson (Wills, Australian Labor Party, Shadow Minister for Public Accountability and Human Services) Share this | Hansard source

I rise in support of the Tax Laws Amendment (2006 Measures No. 1) Bill 2006 and in support of the amendment foreshadowed by the member for Hunter. The purpose of this amendment is to align the definition of ‘facilitation payments’ in the Criminal Code Act 1995 and the tax act 1997 in order to specify that payments made to facilitate or secure the performance of routine actions of foreign governments are to be of a minor value. By aligning these definitions in these acts, this foreshadowed amendment closes a loophole that currently allows scope to make facilitation payments of any amount, as long as you can argue that it is minor in nature.

By strict comparison with the value of Australia’s $5 billion wheat trade, I suppose you could say that in one view the $300 million kickbacks paid to Saddam Hussein over a number of years are minor. However, if this loophole did not exist, Australian law would have provided yet another legal impediment and yet another flying red flag to alert the likes of Mr Flugge and, indeed, the Minister for Foreign Affairs and the Minister for Trade that hundreds of millions of dollars were being provided via Australia to a regime known to support terrorism.

We are told that the Middle East and Asia are such corrupt places that we have to do this in order to do business there. No, we do not. It is not that they are corrupting us; it is that we have been corrupting them. It is time to stop it, and that is why I strongly support the member for Hunter’s foreshadowed amendment. I think we have to say that there will be no more trying to get around the United Nations sanctions, no more ignoring the international standards and no more looking the Canadians and the Americans in the face and telling them barefaced lies.

We can start right here by aligning Australian tax laws with our Criminal Code so that payments of millions of dollars to dictators cannot slip through an Australian loophole. If this loophole had not existed, perhaps the Howard government would not have posted Mr Flugge to Baghdad, paid him $1 million from the foreign aid budget and provided him with a slush fund with millions of extra Australian taxpayer dollars. If it were not for this government’s track record, it would be beyond comprehension that any government in Australia would ever have overseen such shameful deeds and now be rolling out such a shameless rosy-cheeked cover-up as the Minister for Foreign Affairs has been doing.

The member who spoke before me, the member for Ryan, wanted to note that this is the 10th anniversary of the Howard government. The foreshadowed amendment would not be so urgently needed if the government were not so out of touch with community standards and world developments. This amendment is closing a loophole that would never have been exploited under the watch of reliable ministers. It is picking up the slack of an arrogant government. Ten years on from the 1996 federal election, Australia is coasting with ‘it wasn’t me’ ministers at the helm—people who claim, ‘We weren’t there; we knew nothing; this is all a great surprise to us.’

On the back of the last Labor government’s economic reforms and a booming world economy, Australia is rolling along; but, in the absence of moral governance and prudent national investment, our future is less secure than it was in 1996. Our medium- to long-term economic security and international standing have been largely squandered and in 2006, after all the work of the past decade, our future is less secure than it really ought to be. Needless risks have been taken by the Howard government to enable needless indulgence for which we may well end up paying a price, and the visionless coasting of the last 10 years has left us unprepared to handle what will surely be a changing and uncertain world.

The tax loophole that I have been speaking of has come to light as a result of the AWB inquiry. My colleague the member for Hunter has foreshadowed that, during the consideration in detail stage of the bill, he intends to move a technical amendment which will seek to align the Criminal Code in this country with the Income Tax Assessment Act. At the moment the Criminal Code in this country succinctly defines a facilitation payment—

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