Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Hansard source

In speaking on the Tax Laws Amendment (2012 Measures No. 2) Bill 2012 and the package of bills before the House, let me also join with my colleagues, the shadow Treasurer, the shadow minister for finance and those others from this side of the House, who spoke in this debate in reiterating our opposition to these bills. The shadow Treasurer outlined in great detail, schedule by schedule, the deficiencies with this legislation.

In my contribution today I particularly want to focus on one aspect of the legislation that is before the House, which has received some debate this morning and that of course is the schedule that deals with the managed investment trusts withholding tax for foreign investments. The shadow Treasurer this morning outlined some of the government's history on this legislation. He also indicated that the government has tabled an amendment to delete these very schedules this day, so it appears that we are witnessing, apparently—not that the government has said anything discernible at this point—a U-turn in slow motion on this issue. Let us focus on this issue because it says so much about this government's approach to taxation.

In the budget the government announced that it would double from 7½ per cent to 15 per cent the withholding tax for foreign investments for managed investment trusts, and the shadow Treasurer and the shadow minister for finance have outlined the great damage that announcement has done already and the flawed nature of that announcement. They have also outlined in great detail how this is completely contrary to earlier actions and statements by the government.

I just said the government 'announced' this in the budget. That is being too generous to the Treasurer. In my cursory look at his budget speech just now, before beginning my contribution to this debate, I could not find any mention of it. On a closer reading maybe there is a word or two there, but I suspect not. I start from the position with this Treasurer that if there is some bad news to announce it will not be in his budget speech. He has got great history on this, of course. This is the Treasurer who refused to name the debt or deficit figures in his budget speech in 2009.

I will take the House through the history of this because it exposes so much: not only the incompetence of those opposite but their complete lack of understanding on matters of taxation. If you go back to the Treasurer's budget speech of 2008, he very clearly outlined the government's plan to cut this particular tax. He said:

Our nation has the potential to be a financial services hub in the Asia-Pacific Region—the fastest growing region in the world. To support this ambition, the Budget begins the process of significantly reducing the withholding tax—

et cetera, et cetera—

to a final rate of 7.5 per cent …

He was quite happy to make great fanfare of it in his speech. That 7½ per cent rate was to be doubled in this year's budget. There is no parallel statement, and it must flow that if the government thought the 7½ per cent rate was so necessary for what they wanted to achieve, a doubling of that rate indicates a change of policy; and if what they said was so important and so beneficial, a doubling of that rate must therefore be detrimental.

Look to the statements of some of those who have spoken in the debate—it is a wonderful thing Hansard, Madam Deputy Speaker, as you know. We have had in this House today a number of those opposite trying to defend the indefensible. My friend the shadow Treasurer was a bit harsh on the member for Blair, who speaks on all of these tax law amendment bills. My friend the shadow Treasurer rightly pointed out that he had not addressed the substance of this issue. I can tell you why: the member for Blair is a good bloke with a bad brief. What this Treasurer has asked those opposite to do is to vote to cut this particular tax to 7½ per cent and then in his budget to double it. They will be able to go around Australia saying, 'We've supported a cut and an increase in the same tax.'

I have said this before in this House and I cannot be sure that every member will know what I am talking about here, but I know the minister at the table will because he has a great understanding of Australian history and a great understanding of sporting history.

See this speech in context