Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

I am responding now. They both should be in place by 1 July. The opposition says it is appropriate that we not tax the Prime Minister’s Literary Awards. We obviously agree; it is our legislation. The Commissioner of Taxation will not seek to collect tax on the Prime Minister’s Literary Awards, even if this bill has not passed the parliament by 1 July. As is always the case, the tax commissioner takes the view that, if legislation is before the parliament and both sides have indicated they will support it, the fact it has not passed will not mean he will actively seek to collect the tax. There will be no real time effects of the delay on the Prime Minister’s Literary Awards being made tax free. If anything, it is frankly much more important that the withholding tax cuts be passed by 1 July. We will pursue this. We will press vigorously in this place and in the other place for this to be in place by 1 July. If the opposition wishes to take a different view, I am sure it will be more than happy to explain to everybody interested in this matter why it is proposing to hold up this very important tax reform.

Australia as a financial services hub is more than a slogan. It takes hard work, it takes initiative, it takes boldness and it takes a government prepared to make the tough decisions and not to take the cheap, populist Hansonesque route that the opposition appears to be taking. What we can do is make Australia a place where young people who are thinking about a job in the financial services sector or thinking about playing a role in a major financial services hub do not feel obliged to move to New York or London. We will not be New York or London—we are not suggesting we will be. If people wish to move to New York or London to work in a major financial services hub, that is great. I hope they bring their skills back to Australia when they are finished. But a young person should not feel obliged to do that. They should feel that they can work in Australia, which is on a par with Hong Kong, Singapore, Dublin or Luxembourg as a financial services centre.

We have an industry in Australia which has been built up. We have an industry in Australia which is very good at this. It has the fourth largest pool of funds under management in the world—not per capita but in the world—because of the superannuation reforms of the Hawke and Keating government. We have an industry which has built up great skills but which does not export those skills, because we have an industry which has been saddled with an uncompetitive tax regime which the party of free enterprise over there chose to give them. We have an uncompetitive tax regime where we have big superannuation funds and pension funds around the world looking at where to invest their money and they say: ‘Well, Australia is pretty good at this. They have got a well-developed superannuation system. Australia is in a strategic time zone, placed between the United States and Asia. Australia has a well-respected prudential regulation system. Australia has stable government and a stable democracy. It is a good place to invest. Why don’t we invest our money in Australia? Because the withholding tax rate is 30 per cent.’ Yet around the world the average is 15 per cent, and some countries are as low as 10 or 7½ per cent.

Why don’t we give this industry a break? Why don’t we say to this industry: ‘We will give you a level playing field’? Why don’t we say to this industry: ‘You go out and win the business; why don’t you export more than 2½ per cent of your capacity?’ Why don’t we say to this industry: ‘It is up to you, you go and do your job, but we’ll give you a level playing field; we’ll give you a tax system which allows you to compete’? Those opposite will give them a tax rate of 30 per cent—and shame on them! Shame on them for holding back an industry that wants to compete on its own. It is not asking for government assistance, it is not asking for special favours, but it is asking for a tax regime which allows them to be competitive. That is exactly the tax regime this government will give them and it is a tax regime that those opposite stand against.

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