Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Hansard source

Deputy Speaker, I put it to you that Australia is an example of the reverse of the United States, because we have had a more balanced taxation regime in place and because we have run budget surpluses. Our economy is in better shape to respond to the set of financial circumstances that exist internationally. In response to this international financial crisis, government surpluses built up by previous Labor and Liberal governments are now able to be poured into projects that can cushion the economy. Not only can they do that; put into areas such as education infrastructure, they will make our country even more productive and efficient into the future and create thousands of jobs. That is where I stand on the broad question of taxation. I stand for taxation levels that balance maintaining surpluses in good economic times so that we have the financial capacity to respond with economic stimulus in times of economic downturns—tax levels that are well targeted to social services balanced with tax levels that allow businesses to thrive and grow.

I will now return to the detail of this bill. We are refining a bill to deliver a balanced outcome on pay-as-you-go taxes, amongst other things. This bill covers three areas. The amendments will provide a 20 per cent reduction in the amount of PAYG instalments worked out under section 45 and other sections that follow for the quarter that includes 31 December 2008 for certain small business taxpayers; and a regulation-making power to allow the amount of the PAYG instalments worked out under the section to be reduced in the future in circumstances specified by the regulations within these arrangements.

The announced 20 per cent PAYG instalment reduction measure for small businesses broadly represents the reduction in average instalments necessary in a single quarter to reflect the expected slowing in small business profit growth for 2008-09. So what we are doing is providing a better balance in the current economic climate.

Schedule 2 makes the general unclaimed superannuation money regime more consistent with the temporary resident unclaimed superannuation money regime and other consequential amendments as a result of the payment of temporary residents’ superannuation to the Australian government.

Schedule 3 gives effect to the reforms to income tests announced in the 2008-09 budget. The reforms amend relevant income tests in the tax and transfer system to include certain salary sacrificed contributions to superannuation and net financial investment losses.

As I said, this bill shows the balanced approach this government is taking in relation to our taxation system. But, just as importantly, it shows that we as a government are prepared to move quickly and decisively to assist small businesses to weather the global financial crisis. The 20 per cent cut in the February instalment provides important and effective help to small business. It provides immediate and much needed cash flow for small businesses. Around 1.3 million small businesses with aggregated turnover of $2 million per annum or less will get immediate taxation relief.

So that is what we are doing as a government. We are providing a balanced taxation regime. We are providing immediate financial relief to families through cash bonuses. We are providing jobs by putting surplus money into social infrastructure, particularly education infrastructure. We are providing immediate taxation relief to small businesses. This help to 1.3 million small businesses will help sustain employment for the millions of employees working for these businesses and will be a big boost for our economy and jobs when it is needed.

I sometimes wonder what the opposition would have done in response to the financial crisis that has been whipping around the world. It is certainly very hard to tell from their current responses, which chop and change day by day or hour by hour. But I am pretty sure they would have had a fairly lethargic response. They would have gone down the same path as their American ideological idols. They would have chased the illusory pot of gold at the end of the Republican economic rainbow. They would have cut a narrow band of taxes, putting in place long-term structural deficits. They would have cut income taxes, mainly for the rich. They would have closed their eyes wishing, hoping, believing and expecting that everything would just go away.

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