Gai Brodtmann (Canberra, Australian Labor Party) Share this | Hansard source

Taxation remains one of the most controversial areas that any government or indeed any parliament must deal with. It is a fundamental responsibility of government to create and maintain a fair taxation system which meets the basic principles of equity, efficiency and simplicity. Taxation is essential if a government is to discharge its responsibilities. It is essential if we are to maintain defence of the nation, to ensure our citizens are protected from harm and to ensure that the social services that modern Australians have come to expect from their governments are continued. I would share with many others in this place the sentiment attributed to the American jurist Oliver Wendell Holmes Jr: 'Taxation is the price we pay for civilisation.' This is literally true. Without the protections and structures afforded by government, civilised society would not be possible.

I should make a disclosure: while I have no difficulty in paying my fair share as a citizen, as a former small business operator I did not always enjoy the process of complying with my taxation obligations. It was at times very complex and very difficult to comply. It really did add an extra burden to a busy business and cause many headaches—and thank you to my tax agent.

Designing a simple tax system that meets the needs of government to provide essential public services while at the same time making it the least burdensome it can be on the taxpayer, in terms of paperwork and red tape, is not easy. For this reason tax reform is an ongoing process. By 'tax reform' I refer not only to the major reforms, such as the mineral resources rent tax, but to the ongoing patient work of improving the taxation system to make it clearer and easier for taxpayers to comply. But beyond these aims we must always be conscious of the effects of taxation systems on important social objectives and, for example, there is a constant focus on making sure that the taxation system does not create disincentives, to moving on from the welfare system, by minimising the unintended high effective rates of taxation that can occur.

It was a little over a year ago that I ran my own small business, so I know very well the stresses that come with owning and running a small business, a microbusiness. I know the burdens that tax and red tape can impose on the operations of smaller microbusinesses. In my case, I was a sole trader so I had no-one else to help me in dealing with my taxes and with my obligations, apart from my wonderful tax agent, so I always welcome measures that make it easier for small business and microbusiness owners to comply with their taxation obligations and to be able to do it themselves, rather than having to be constantly on the phone to a taxation agent.

The Labor government has made many such reforms and improvements to benefit microbusiness and small business owners and all taxpayers. We have made changes to the PAYG system to reduce the PAYG instalments for the 2011-12 income year for taxpayers, who pay quarterly instalments on the basis of the GDP adjusted notional tax method. This frees up some $700 million in cash flow from Australia's 2.7 million small businesses. We have also increased the instant write-off for assets bought by a small business to $6,500 and have introduced an immediate $5,000 deduction for motor vehicles. While these are not big-ticket items like the mineral resources rent tax, which captured the headlines and public debate, they make a big difference in the everyday lives of Australians and in the everyday lives of microbusinesses and small businesses.

Another reform passed by the House this morning and opposed by those opposite will take the tax-free threshold from $6,000 to $18,200 in 2012. This will increase to $19,400 in 2015. I am greatly encouraged by this because I think it will greatly encourage women to re-enter the workforce, particularly those who are at home at the moment with babies or small children. It gives them more encouragement to participate in part-time work. This reform that we passed today in the House of Representatives, again resisted by those opposite, will mean that some 100,000 Australians will no longer have to lodge a tax return. That is an amazing achievement. This reform also means that all Australians earning up to $80,000 a year will receive a tax cut. However, this is not the end of the discussion, and I do not think there can ever be an end to a discussion on tax reform. It may never be possible to build the perfect tax system, a system that fairly shares the burden of a civilised society, but I believe this government has the courage to—(Time expired)

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