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

in reply—I thank all members who have contributed to this debate: the member for Lindsay for his usual well-considered and erudite contribution, the member for Moreton likewise, the member for Stirling and the member for Fadden. I recognise the cross-party support for schedule 1 of the Tax Laws Amendment (2008 Measures No. 4) Bill 2008. Schedule 1 provides relief from capital gains tax for policyholders of private health insurers that convert from a not-for-profit insurer to a profit insurer by demutualising. The amendments will facilitate the demutualisation of private health insurers and will apply from 1 July 2007. These amendments disregard any capital gains or losses that arise to policyholders under the insurer’s demutualisation. The amendments also ensure that no other tax consequences will arise to policyholders from their receiving a cash payment or an issue of shares under the demutualisation. Policyholders who receive shares in the demutualised insurer will receive a market value cost base for those shares. These amendments will also allow shares issued under the insurer’s demutualisation to be held on trust and then transferred to or sold on behalf of policyholders who are unable to directly receive their shares without capital gains tax consequences for the trustee.

In relation to schedule 2, I note that this has not been an area of agreement between the two sides of the House. I must take this opportunity, in summing up, to correct some of the misstatements from members opposite. I am sure they are genuinely misguided. I am sure they are not deliberately misleading the House but they are misleading the House nonetheless. Firstly, on the issue of costings, the member for Stirling, the shadow Assistant Treasurer, said that the change in the lineal descendants mechanism would save the government $1 million over the forward estimates. He quoted extensively from the Senate inquiry evidence and alleged that this would save $1 million over the forwards. I need to correct the record and refer to the evidence from the Treasury to the Senate inquiry. Mr Brown, who is a Treasury official, said:

My recollection of the costing of this is that the lineal descendants, over the forward estimates period, is a very small part, probably around $1 million.

The evidence continues:

Senator Bushby—$1 million out of the $20 million?

Mr Cicchini—Each year.

Mr Brown—Each year.

Senator BUSHBY—$1 million each year?

Mr Brown—Each year.

It is not $1 million over the forward estimates; it is $1 million each year—a fundamental mistake by my honourable friend the shadow Assistant Treasurer. Mr Brown went on to say:

But that number outside of the forward estimates period would grow.

That is a fundamental point. It is not simply about savings over the forward estimates but also about protecting the integrity of the tax system going forward. It is about protecting the revenue base going forward to ensure that we continue to have a fundamentally robust revenue base and that changes made by the previous government do not undermine that revenue base. That is the first mistake from the shadow Assistant Treasurer, who, once again, was not completely on top of his brief.

Secondly, we had an allegation from members opposite that the government should have split this bill and that, because we have arrogantly refused to split the bill, they are forced to vote against it. Tax bills are omnibus bills. It is the way it has worked for time immemorial. The government puts a range of measures in tax bills. The job for members opposite, as it was for me when I was the shadow Assistant Treasurer, is to recommend and to determine whether to support or oppose the bill as a whole. And may I introduce members opposite to the concept of an amendment. If you do not like part of the bill you amend the bill. You propose an amendment. You move that a schedule be removed or you propose other changes. The government then accepts or rejects the amendment and the House votes. That is how it works.

The opposition are constantly calling on the government to split bills so that they can vote for parts that they like and so that the other parts can be put in a separate bill. That is not generally how it works. I am happy to split bills if there are timing issues—if there are particular parts that the opposition genuinely want more time to examine if it would have an implication for the timing of other bills. I am always happy to consider those requests on their merits. But, where the opposition oppose part of a bill but support the other part of the bill, they have to make the call. It is not our job to make the call for them. They have to make the call. They can move an amendment if they wish. If that amendment fails in either house, they have to make a judgement on balance as to whether to support the whole bill. That is a matter for them. That is what we used to do when I was shadow Assistant Treasurer: we would move amendments if we did not like parts of the bill and then, if those amendments failed—as they regularly did—we would make a call as to whether to support or oppose the bill. That is what you do.

I think the opposition have indicated that they oppose this bill. That is fine. They have made a judgement that, while they will support schedule 1—

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