John Murphy (Lowe, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

I rise to commend and support the amendment moved by the member for Rankin to the Tax Laws Amendment (Small Business) Bill 2007 before the House this afternoon. This bill is one of at least seven tax law amendment bills being introduced into this House for the purpose of either reducing taxation burden or reducing what is known as the ‘shoe leather costs’ on small business owners and operators in complying with the massive taxation law red tape this government created when it dreamt up the so-called A New Tax System legislation.

Indeed, it must be said that the A New Tax System legislation of 1999 has been an unmitigated disaster for small business. The A New Tax System legislation included some 40 pieces of legislation, kilograms of legislation—and I well remember the member for Rankin coming into this House with acres of paper, because I was sitting immediately in front of him. He had a set of weights and measures, and you just could not deal with the volume of legislation, so complex was it, thanks to this government. Clearly it needed a systematic overhaul. So the bill today is but part of the big picture of necessary amendments to a badly flawed and ill-conceived taxation overhaul that led to the outcry from the small business world particularly.

As members of this House are aware, this bill is the result of the findings on the new small business framework which, if this bill is enacted, will be established in divisions 3 to 8 of the Income Tax Assessment Act 1997. The most significant effect of the new small business framework will be to amend the definition of what is known as simplified tax system, or STS, taxpayers to an inclusive single definition of small business entities.

There are a large number of amendments to the existing legislation, all of which are reportedly designed to lessen the administrative burden on small businesses. Members of this House and the general public have had drawn to their attention various aspects of this bill, which implement the findings of the Banks task force report of 2005, named after the Prime Minister’s appointment Mr Gary Banks. I cite from Bills Digest No. 156 of 23 May the job of Mr Banks. It was:

... to identify practical options for alleviating the compliance burden on business from Commonwealth Government regulation.

Given that we as a parliament are at this time so preoccupied with fiscal policy, it is timely to remind ourselves again of what is meant by fiscal policy. On 23 May in this House I spoke on another of the fiscal policy bills presently before this House, that being the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007. In that bill, as here, I found it necessary to remind us of what fiscal policy is chiefly concerned with. I reminded this House that fiscal policy is essentially concerned with taxation and public expenditure. The honest end of fiscal policy is—as was identified in the Commonwealth Parliamentary Service’s Budget Review of 2007-08, published on 21 May 2007—commonly known as the three Ps: population, participation and productivity. I further noted on this point that a key aspect of a successful criterion in any fiscal policy in the context of the three Ps is (1) economic stimulation, (2) increase in real disposable income and (3) relation of fiscal policy on net inflation, including wages growth.

As I noted during the debate on the personal income tax reduction bill, so too the bill before us this afternoon, measured in purely utilitarian terms, looks good superficially. However, fiscal policy can never be measured purely in utilitarian terms such as tax deductions and reduction in red tape. Theoretically, the anarchocapitalists will argue that good government is no government. If any government were to proclaim zero taxes and no regulation of business affairs—in other words, a policy of absolute laissez-faire—then, for a time, no doubt the general public would be jumping for joy, for no business or natural person likes to pay any tax any of the time, nor do businesses like to be regulated at all. But we all know that that is not sustainable, and we all know the immortal words of United States Supreme Court Justice Oliver Wendell Holmes: ‘Taxation is the price we pay for civilisation.’ The quote draws succour from the book of II Corinthians at chapter 9, verse 7:

Every man according as he purpose in his heart, so let him give; not grudgingly, or of necessity: for God loveth a cheerful giver.

The various fiscal bills before us today, in my view, smack of the usual fistful of dollars and release of regulatory burdens cynically just prior to a federal election, which we all know is only months away—probably 13 October. The Prime Minister will fire the starting gun.

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