Steven Ciobo (Moncrieff, Liberal Party) Share this | Hansard source

by leave—I rise to speak on the advisory report on the Passenger Movement Charge Amendment Bill 2012, the Tax Laws Amendment (2012 Measures No. 2) Bill 2012, the Income Tax (Managed Investment Trust Withholding Tax) Amendment Bill 2012 and the Pay As You Go Withholding Non-compliance Tax Bill 2012. There was, as the chair outlined to the House, a dissenting report from coalition members with respect to each of the bills insofar as it is our recommendation as Liberal members on the committee that the bills not be passed by the House in the current form but, rather, require change.

The Tax Laws Amendment (2012 Measures No. 2) Bill 2012 and the Pay As You Go Withholding Non-compliance Tax Bill 2012 amend the Taxation Administration Act 1953 and four other acts to extend director penalties so that directors are personally liable for a wide range of company guarantees in relation to superannuation and pay-as-you-go withholding even if a company is placed into administration or liquidation. Liberal members of the committee are concerned that the government has not adequately addressed bipartisan concerns previously raised during the last inquiry into the measures. Importantly, the bill has failed to appropriately target phoenix activity and concerns that liability would apply indiscriminately to all directors, including those of charities and not-for-profits that are limited by guarantee, as many are. There are some 11,700 companies in Australia that are limited by guarantee.

It is typical of this Labor government, unfortunately, that directors would appear to be saddled with liabilities even where there is no illegitimate activity or undue liability. Questions were raised in the inquiry about whether the directors of the company may be liable to pay these measures if they join a board after the fact, and these questions were not adequately answered. It is repugnant not only to the rule of law and the processes of natural justice but also in terms of assigning all directors an indiscriminate liability, the history of company law and the legal principle of persona ficta.

The Australian Institute of Company Directors and many other stakeholders contend—and Liberal members of the committee concur—that phoenix activity is not appropriately defined in the bill. We as Liberal members were concerned about the need to do something with phoenixing activity. It is just that this approach is too broad and not effective in terms of its operation—and that is why we are not supporting the government's steps in this respect. The consolidation tax, cost-setting arrangements and related taxation of financial arrangements are retrospective tax changes. Liberal members of the committee are fundamentally opposed to post factum law, especially taxation legislation. This government has failed to justify both to the public and to members of the committee the retrospective aspect of this legislation.

Similarly, issues arise under the Income Tax (Managed Investment Trust Withholding Tax) Amendment Bill 2012, which amends the Income Tax Managed Investment Tax Withholding Act 2008 to increase the managed investment trust withholding tax from 7.5 per cent to 15 per cent. Both investments made, especially in infrastructure, and the reputation of Australia as a safe and stable place will now be placed at risk because of the facilitation of the government. Taxpayers who made a sound effort to comply with the prevailing law as it was when they entered into financial arrangements are particularly affected. In submissions made to the committee there were instances of entities that, with these changes in place, may not have entered into financial agreements outlined. Fundamentally it is a function of the mismanagement and, in our view, incompetence of the government that only serves to encourage the lack of certainty that already plagues public confidence.

Finally, the Passenger Movement Charge Amendment Bill 2012 increases the passenger movement charge from $47 to $55 from 1 July this year and indexes the charge to the consumer price index from 1 July next year. This is simply a revenue-raising measure and presents an enormous cost to the tourism sector not only directly but also in terms of the relative competitive disadvantage that it will present. Liberal members of the committee are gravely concerned that, at a time when Australia's tourism industry is already struggling, at a time when Australia has gone from being an exporter of tourism to being a multibillion dollar importer of tourism, this government is flying blind with respect to the extra impost it is putting on the industry. It is particularly obnoxious for an industry that employs roughly 500,000 Australians that this government would continue to reduce funding to that industry in real terms and at the same time impose an extra $600 million to $800 million of new tourism taxes. This is not good public policy. This is nothing other than a money-grabbing exercise from a government that has completely eroded Australia's fiscal position and now must lash out with new taxes on an industry that can ill afford it. It is a bad policy choice and all Australians involved in the tourism industry, directly or indirectly, know it to be exactly that.

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