Bernie Ripoll (Oxley, Australian Labor Party, Shadow Parliamentary Secretary for Industry, Infrastructure and Industrial Relations) Share this | Hansard source

I rise today to speak on the Tax Laws Amendment (2006 Measures No. 5) Bill 2006 and offer my support to the amendments that were moved earlier by the member for Hunter and the comments that he made. The bill, according to the Bills Digest, does a number of things. I will speak on a variety of issues that have an impact on tax and a range of other matters contained in this bill.

The changes to fringe benefits tax in particular, according to the Bills Digest, are about reducing the regulatory burdens on business. Schedule 1 amends the Fringe Benefits Tax Assessment Act 1986 to do a number of things, including: increase the minor benefits exemption threshold from $100 to $300, increase the reportable fringe benefits amount threshold from $1,000 to $2,000 and increase the reduction of taxable value that applies to eligible in-house fringe benefits and airline transport fringe benefits from $500 to $1,000. It extends the definition of ‘remote’ for the purposes of the fringe benefits tax concessions where the shortest practical route involves travel by water. These amendments will take effect in the fringe benefits tax year starting on 1 April 2007 and later fringe benefits tax years.

The increase in the minor benefits exemption and the reportable fringe benefits amount thresholds were announced by the Treasurer and the Prime Minister in their joint press release No. 019 of 7 April 2006 as part of the government’s response to the report of the Taskforce on Reducing the Regulatory Burden on Business, which of course is something that this government needs to deal with seriously. After 10 long years of talking about being the best friend of government, little has been done on a practical level to deal directly with regulatory burdens on business. Although there have been a lot of reports, task forces and inquiries, the government has taken very little action. In fact, the amount of red tape and the regulatory burden on business today are somewhat weightier than they were 10 years ago when this government came to power.

This bill, according to the government, is also a rethinking of regulation in the 2006-07 budget. The increase in the reduction of taxable value applying to eligible fringe benefits and the extension of the definition of ‘remote’ were announced in the 2006-07 budget and in attachment B of the Treasurer’s press release No. 039 of 9 May 2006. So the government is at least moving forward, albeit slowly, and making some attempts to recognise the burden that is placed on small business and to do something about it.

This burden on small business has a number of effects on small business, particularly in the area of, for example, skills. While businesses are occupied and busy dealing with administrative issues, they cannot be dealing satisfactorily with skills issues, and we have plenty of evidence of that. The last 10 years has been marked by a growing skills crisis in Australia, to the point where today it really can be defined as a crisis.

We are seeing the government react in a number of ways to that skills crisis, through short-term solutions such as 457 so-called skilled visas and a range of other activities. The reality is that the number of Australian apprentices and trainees quitting their courses and not following through has hit an all-time high in this country, and the government has done little to nothing to address this issue. These issues form just as much of a burden as any regulatory burden that small business faces.

In fact, according to new figures from the National Centre for Vocational Education Research, in the March 2006 quarter, apprenticeship cancellations and withdrawals reached 36,000. That is up 13 per cent from the same time last year. Over that quarter 40,400 people completed an apprenticeship. That high number of those who did not finish, who either withdrew or cancelled, is startling and something that the government should be seriously trying to address.

The government is so out of touch that the training minister recently proposed building TAFE colleges not here in Australia but in Africa. I think it confused everybody, not only in this place and on his own side but out in the community as to why that would be a good idea. The government ought to be acting to cut the dropout rate by adopting Labor’s proposal for a $2,000 trade completion bonus to encourage more traditional apprentices to complete their training.

I think sometimes dealing with issues and burdens placed on small business, be they regulatory or otherwise, is not so much about trying to come up with new ways to attract people but about trying to stem the flow, stop the bleeding and stop the pain that is being felt by small business in trying to get skilled, qualified and trained people through their industries. Once again, the Howard government has forgotten what its top priority ought to be in this country—that is, training Australians first and training Australians today.

The NCVER figures from the March quarter also showed an increase of 24 per cent last year in the number of cancellations and withdrawals from apprenticeships in the trades and related workers category. So it is not just restricted to one area. The number of apprentices and trainees also declined slightly in the March quarter compared to the same time last year. It will take another 10 years at the current level of training to make up for the lack of training over the past decade—a terrible record and a terrible legacy that has been left by this government.

According to a recent report commissioned by the Australian Industry Group, Group Training Australia and the Dusseldorp Skills Forum, that level of training, that 10-year bridging gap, is a complete disgrace and something that Australia is going to struggle to fix. Building TAFE colleges in Africa obviously will not solve the problem, and the minister could not have backed away from it any faster than he did when we raised that issue and asked a question on it in this place. That is why Labor says our priorities are to train Australians and train them now. This is having a very serious effect on small business.

The Australian Hotels Association, at a briefing that you and I, Mr Deputy Speaker Quick, got just recently, raised some of the issues that we are both concerned with, including the quality of training of young people and the level of service within that industry. It is an industry particularly marked by the number of young people and transient and casualised workers who come through and, potentially, do not stay in that industry, or who come through the industry to support themselves while they are doing some further educational studies or perhaps while in between jobs. Or perhaps they are people who really do want to have a long-term career in that industry. But what the industry is finding is that they are just not being supported by government, and I do not believe they are being supported by the government’s extreme industrial relations changes. The changes are not benefiting the industry as a whole. While on the surface there may be this impression that they give employers greater flexibility to determine how people ought to work, they do not actually do anything for the industry itself.

What I am referring to is the dumbing down of skills in restaurants, coffee shops and service industries where we are finding that people no longer get trained. They no longer have those skills, and employers are no longer willing to spend the money that they otherwise would, and they cannot find enough skilled people to fill the jobs. So they are finding it very difficult, and that is causing major problems for the industry. One of the things we were told by the AHA is that there is a problem in the Australian market with domestic tourism, and I think this could be a part of that. If people are going to get a bad service experience or some other bad experience when they are travelling or holidaying domestically, then this skills crisis and all those other burdens that are on small business are not going to help.

That is the real and practical impact: the dumbing down of skills and noncommitment to an industry. Young people are not silly. If they do not find opportunities and prospects for career advancement in an industry then they just move on. But I believe the AHA is actually becoming involved; it is doing everything it can. It understands the problems with skills and the skills crisis in this country, and hopefully it will do much more to address these issues, to reinvest in its own industry and in young people and training, and make sure that we do not end up with a very second-rate service industry. This leads straight on to the relationship between the extreme industrial relations changes of this government and the 457 so-called skilled visas class. I say ‘so-called’ because once upon a time a 457 skilled visa was just that; it was a visa that somebody attained. They then came to this country and worked to fill a particular skill gap which was identified and which had selection criteria. The employer looking to fill that position would have done everything they could have to find somebody domestically. So they would apply.

It is a fairly big process, obviously, and a big leap for somebody to look overseas to fill a job. But that has all changed now, because this government has decided that it should go out there and relax the rules and regulations on how business can get so-called skilled labour—guest labour, as it were—into this country. Now those controversial temporary business long-stay visas are being used not to fill skills gaps but just to employ cheap labour. That is a real concern, because those people being displaced are the people in the service industries who I referred to earlier.

We are now finding an opening up of this new class, particularly when it comes to chefs and people working in hotels. You will find that now they are all from overseas, supposedly filling a skills gap. But the reality is they are being used as cheap labour, and I find that completely appalling. I think that this government ought to seriously reconsider its position on the use of foreign, so-called skilled labour in this country. At the end of the day, what this really means in practical terms is taking jobs away from people who probably ought to be in those jobs and who may develop long-term careers if they can receive the training they need. Labor have made a number of comments and proposals on 457 visas. What we have said from the outset, though, is that we support a 457 skilled visa class. We have always supported one, because it is an important part of the mix in Australia to deal with skills and particular industries. But it should not be used as a replacement for skills just to import cheap labour. It should not be used to exploit people.

There has been an inquiry on the abuse associated with the visas. There were problems with the launching and the administration of that inquiry on making it a more transparent visa class. The inquiry, rejected by the government, was to examine a number of things. I think these are very important. That inquiry would have examined the general efficiency and effectiveness of this visa class, the safeguards in place to ensure the integrity of the system, the government’s performance as an administrator of the visa system, the role of the domestic and international labour hire firms and agreements and the potential for displacement of Australian workers, and the difference between the pay and conditions of visa holders and the relevant rates in the Australian labour market. That particular point is another issue. Workers are brought in under this visa class not only to be used as cheap labour but also to undermine the wages and conditions of Australian workers working beside them. This is something that needs to be investigated fully.

The inquiry would also have examined the government’s labour market testing required before a visa can be approved, and we have already seen a number of test cases that have shown that there are unscrupulous employers out there who will exploit and abuse people under this visa class. If it had been accepted by government, the inquiry would also have looked at the regional certifying bodies for visa certification and the interaction of this visa with the Work Choices legislation. These are some very serious issues, and if the government were serious about actually dealing with this properly they would have allowed this inquiry to take place. But they have cut and run. They are hiding; they do not want anybody to fully examine the impact this is having on our economy and on Australian workers. All I can assess from this is that they just do not care. They do not care enough about Australian workers and Australian industry to make sure that this visa class is not going to have some long-term detrimental effect.

I will also add to that a very important part, which is that there are lots of very good, solid employers out there. Some are large employers. There are a number of them—quite a few, in fact, in my electorate, who are concerned about 457 visas. They use them themselves, but they use them properly. They do not use them to undercut wages and conditions; they use them to fill real skills shortages and gaps. The problem they are finding, though, is that some of their competitors are exploiting and abusing that visa class. And the problem they find is that it is getting harder and harder to compete with unscrupulous employers who are trying to undercut them and compete just on wages. If this government does not want a race to the bottom on wages and conditions, a dumbing down of industry and training and a running down of our own labour market then it should look very carefully at this visa class and its full impact on the Australian economy and labour market.

I also want to talk briefly on the issue of interest rates. I do not think you can talk about any tax bill or any other bill in this place without raising interest rates because they seem to be the daily discussion point and certainly the barbecue stopper and all those things that the Prime Minister always talks about. But something very special happened in this place this week—that is, for the first time for a long time Labor asked a question citing 17 per cent interest rates. We threw it at the government with open arms, saying: ‘Here it is. Here’s a free kick. We’re going to raise 17 per cent interest rates with you and we’re going to compare our record to yours.’ What do you think the Prime Minister had to say on it? He ran and hid and tucked his tail under because his record is worse than it ever was with 17 per cent interest rates. Even though 17 per cent interest rates were very brief, they did hurt people, but people are hurting more today. That is the new interest rate reality—that is, it is 50 per cent more expensive today, in today’s dollars, than it was with 17 per cent interest rates when Labor was in government.

This government has nothing to be proud of. It will leave no great legacy, apart from the fact that it is creating a whole generation of young people who now no longer consider it possible to even dream about owning their own home. They have other things to do. They have to worry about paying for their HECS and university degrees, which are now the price of a home. They have so many other bills, including personal debt and credit card debt, and are trying to survive the cost of living and all those other issues. As a young person, the dream of being able to save a few thousand dollars and to get into the housing market at the low end—something cheap and affordable but where you can start your family and start a bit of wealth creation, which this government seems pleased to crow about but does not do anything about in real terms—is gone. It is gone for a whole generation.

Interest rates are nothing that this government ought to be proud of. We have seen the seven back-to-back rises and we have seen the broken promise the Prime Minister made at the last election. There have been three or four interest rate rises since then and there are potentially more interest rises to come. We do not want interest rate rises. We think people are paying too much already. Just because it is a low number it does not mean that you are not paying a lot of money. In fact, people are paying more money than they ever have in history. Consider these facts: the average new mortgage in Australia is over $220,000 and, of course, it is much higher in major capital cities. I do not have to talk about Sydney for too long for people to understand what that means for people in that market. Since the election, repayments on an average new mortgage have increased by $108 per month. It is a lot of cash, a lot of after-tax dollars, that people have to find. This means that, over the last 10 years, since this government has been in, household debt has doubled. Again, it is a very terrible record and one that this government should not be proud of.

It is not going to be easy to fix. The only solution that the Prime Minister and this government ever put forward is: ‘Let’s blame the states.’ Okay, we will do that; that is fine. Do it for as long as you like, but at the same time start coming up with solutions and start looking at what you can do practically to deliver something, particularly for first home buyers, who cannot afford to buy a home anymore. The proportion of first home buyers in the market has hit a 12-month low. Of all loans, first home loans are now just 16.7 per cent. That is a startling figure and something that this government should be very concerned about.

A range of issues have come to the table over the last few days in this place. Certainly the tax take and its relationship to interest rates and to what this government has been doing is not good. This is the highest taxing government in Australian history. We just heard the member for Rankin give a very eloquent contribution on tax, and he gave some comparisons and reminded us of some of the porkies that have been told by the Treasurer on taxation. Make no mistake: this is the highest taxing government on record. It is the Howard-Costello legacy.

In the very few seconds I have left, I want to make a quick point about Medibank Private. It should not be sold. The sale should not go ahead. The government, whilst it has delayed the proposal for the sale, is still committed to this sale. It wants to flog off everything. I am waiting for the bill to sell off Parliament House! Maybe there will be some shares in it for Australians. Although they already own it, they will have to buy shares in their own parliament. Maybe democracy could be aligned with the number of shares you own. That is the mentality of the Howard-Costello government. It is unbelievable and incredible. This government ought to be condemned for even considering the sale of Medibank Private. (Time expired)

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