Robert Oakeshott (Lyne, Independent) Share this | Hansard source

I certainly welcome the parliamentary debate on the back of the Tax Forum in what I hope is a quest, as per the final words of the member for North Sydney, for comprehensive tax reform in Australia. For that to happen I hope we have a comprehensive parliamentary debate, but I have to say that, from the first two speakers so far in this debate, we can juxtapose what happens in this chamber—as to part of the problem of tax reform—and compare it with what happened in what was a detailed, thorough and much more mature debate at the Tax Forum last week.

I did not rise to correct the record on comments made by the member for North Sydney but I have to, because he made direct reference to the fact that I have not mentioned that the opposition should have been at the Tax Forum. I have done so, quite publicly, and also in my speech to the Tax Forum. In fact, I have my speech here and I will directly quote what I said. I said: 'It is disappointing, for example, that the potential next government are not here today. They should be, but at the same time we should be buoyed by comments that they welcome an independent office of tax simplification. I think in their absence they have, either by accident or design, just put the first offer of this forum on the table for government to accept and I will be doing what I can to see that happen.' That is to correct the record on what was just said by the member for North Sydney.

As well, on the comment in regard to the tax research institute and the $1 million per annum that came out of the forum, it is incorrect to say that that is not linked to the university sector. That is very much part of what the tax research institute is doing—to try and put a divide between the very good work done by people in the university sector now and this money and greater research in tax in some very necessary areas. These areas were exemplified in the Tax Forum in the debate around negative gearing, for example, where all the arguments about the rights and wrongs of its impact on housing affordability had merits. The tax research work and money will help the best and brightest minds in academia to assist in some of those detailed issues, as per the example of negative gearing.

The third issue I need to correct is the campaign to somehow position lifting the tax-free threshold as bad. What we have just had as a vote in this chamber today is a significant win in the lifting of the tax-free threshold from $6,000 to $18,200—$19,400, I think, in 2015—with the aspiration that came out of last week of lifting that to $21,000 and the target from the Australia's Future Tax System Review report, which mentioned $25,000 as the goal. These are good and sensible steps for very low-income earners in Australia and for the great challenge that we have in regard to the casualisation of the workforce, returning mothers to the workforce, the whole interrelation between the tax and transfer system, participation rates of the long-term unemployed, and any blocks there are in current policy in decisions made by individuals in returning to the workforce. This is good and sensible work that is being done right now, so I am somewhat surprised by the campaign that seems to be emerging from the opposition, including by what I saw from the motions at the National Party conference in Port Macquarie. The National Party looks to be opposed to lifting the tax-free threshold to $25,000 at all, which surprises me a lot.

The need for a parliamentary debate to put some of the positions from all the public policy leaders in regard to some of these issues is important. I hope that the debate that flows within the parliamentary chamber can at least come close to the maturity and the detail of the debate that took place last week. I hope that is a challenge that all MPs take up as this debate unfolds. I certainly invite input from as many MPs as possible, and all ideas on the table for comprehensive tax reform will be welcome.

I will put a motion to the House next week to continue to push for the road map from government for comprehensive tax reform. I think we do have unsustainable tax settings in Australia. This is not the curse of one political party or the other; this is something that has happened over a long period of time from many governments. We have seen the Sara Lee cake of tax upon tax added to the system, offset on offset, concession on concession, all without any removal or any campaign between local, state and federal governments to simplify the tax system, make it more efficient and reduce the number of taxes, which was the underlying theme in the Australia's future tax system report, done and led by Ken Henry. The underlying theme that seems to have been missed by all governments is that we have got 10 efficient taxes collecting 90 per cent of the tax base in Australia and we have 115 doing 10 per cent of the work—arguably the nuisance taxes, the inefficient taxes and the ones that are ripe for the picking if we can build a system as part of comprehensive tax reform to reduce those taxes and lift the burden on Australian community life. That is our challenge. It is not owned by one political party or the other and—particularly in the 43rd parliament, where anyone can get to the number of 76 on the floor of this chamber—all ideas should be welcome.

So if a private members bill comes from the opposition, for example, for an independent office of tax simplification, I will do what I can to advocate it. That is the challenge for the member for North Sydney and the coalition to consider. If there are any ideas around tax swapping, where Liberal state premiers and state treasurers are engaged alongside Labor state premiers—as we saw come out of the tax forum, where we saw the Queensland Labor Treasurer and the new New South Wales Liberal Treasurer agree to a process of working on the state tax reform plan through to the end of 2012 on harmonisation on some of the key, inefficient bad taxes that are run at state level; and additional steps, which in my view is hopefully code for looking at options such as minimisation elimination or all the ideas around tax swapping. The one that is floating around at the moment as an example is with the National Disability Insurance Scheme picked up by the Commonwealth entering disability back into the Commonwealth transfer system. There is an opportunity there for a tax swap for service opportunity, where the states could arguably start to look at some of the bad taxes that they all agree are bad taxes for stamp duties on property, insurance taxes and the like. They now have an opportunity through this state tax reform plan to look at those and negotiate with other levels of government as to getting more efficiency in the tax system.

What do we mean by 'efficiency'? With some of those bad taxes at a state level, such as insurance taxes and stamp duties on property we burn somewhere between 50c and 67c in the dollar of the tax raised in the actual process of collection. That is nuts! That is completely inefficient in collection and adds to the burden of tax life in Australia unnecessarily. So if we make it as simple as disregarding whether it is a local, state or Commonwealth tax and we rank them on their efficiency or inefficiency, and we do all we can within public policy to work our way through eliminating and minimising the inefficient and maximising the efficient, it is a pretty simple exercise on paper. The problem is the partisan nature of debate in Australia today, which seems to be only to look at two years in advance when a core part of our business as MPs of all political persuasions is to at least look 20 years in advance. Yet we do not seem to be able to look beyond two years. We do not seem to be able to look past the partisan in public policy consideration. Obviously vested interests have an awful lot of say in a lot of the debate, as we have seen this morning and as we are going to see with the introduction of another Henry recommendation, the mining tax.

I welcome the parliamentary debate. I hope it is a mature one. I hope many people participate and I hope the goal of comprehensive tax reform can be achieved. (Time expired)

See this speech in context