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

I will be dealing with costings. Providing leadership means taking a long-term view that we need a competitive tax regime. The previous government gave Australia the highest withholding tax rate in the world—30 per cent. They thought that was competitive. We took the view that that was unacceptable. The opposition seems to have the view that that continues to be acceptable. It is completely unacceptable to the government. Australia should not have the highest withholding tax rate in the world. We went to the election with a commitment to reduce the withholding tax to a rate more in line with world standards—15 per cent. During the budget we decided we could do better. We decided we could take Australia from the highest withholding tax rate in the world to effectively the lowest in the space of three years. Why did we do that? Because you do not create a financial services hub with tinkering. You do not create a major policy reform by working around the edges. We took the view that if we could give Australia the lowest withholding tax rate in the world this would be a major advance in making Australia the financial services hub of Asia. We took the view that a withholding tax rate of 7½ per cent was an appropriate way to promote Australia as a financial services hub.

The shadow Assistant Treasurer, the member for Stirling, had this to say about the 7½ per cent rate:

As far as I am aware, nobody within the industry was actually calling for the rate to be 7½ per cent and I would be fascinated if the government could actually provide any evidence of anybody who thinks that this was an appropriate response.

The member for Stirling said:

... I would be fascinated if the government could actually provide any evidence of anybody who thinks that this was an appropriate response.

I am more than happy to assist the member for Stirling, because this is what he has asked for:

... nobody within the industry was ... calling for ... 7½ per cent and I would be fascinated if the government could actually provide any evidence of anybody who thinks that this was an appropriate response.

He has asked the question; he will get the answer.

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