David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Hansard source

The bill very specifically and very clearly goes to the protection of superannuation entitlements of working people. That is what those opposite are voting against. They are voting against protections that we want to put in place that will ensure that a regime is in place that provides some accountability with respect to the provision of superannuation entitlements.

It is a shameful thing. I can understand why the member for Paterson does not want to accept the fact that that is what he is voting against. When he was talking about the bill he preferred to focus on other parts of the bill. But it is no surprise that the opposition come into this place and launch a further attack on the entitlements of working people.

Schedule 2 of the bill amends the taxation of financial arrangements, the TOFA regime, to ensure that the tax treatment of joining/consolidation events is consistent with the TOFA tax-timing rules and that financial assets and financial liabilities are treated symmetrically.

Schedule 3 amends the Income Tax Assessment Act 1997 to modify the consolidation tax cost-setting rules. The changes are necessary to take away unexpected retrospective benefits arising from amendments to the consolidation regime that were made in 2010. There is an important point to make. Amendments were made in 2010 that provided retrospective benefits. These amendments merely recognise the fact that unanticipated and unintended benefits flowed from those amendments. It is widely recognised that it is appropriate to correct it to ensure that a more balanced outcome is achieved.

These changes demonstrate the government's commitment to maintaining equity, fairness and integrity of our tax system. The changes implement recommendations made by the Board of Taxation for future consolidations and will ensure that companies inside consolidated groups do not receive tax benefits that companies outside consolidated groups are unable to receive. Following extensive consultation, the changes affecting a corporate acquisition will depend on the time when the acquisition took place.

The changes affecting corporate acquisitions that took place before 12 May 2010 are necessary to ensure deductions are claimed only when it was intended and to protect a significant amount of revenue that would otherwise be at risk. Changes for the period between 12 May 2010 and 30 March 2011 will largely protect taxpayers who made business decisions on the basis of the current law, before the Board of Taxation was asked to review the law. For corporate acquisitions after 30 March 2011, the changes will increase certainty for taxpayers and will implement the board's recommendation to apply a business acquisition approach in certain cases.

Those opposite talk about these changes to the consolidation regime, going back to the start of the regime in 2002. They say that they will oppose this bill, because taxpayers were right to act based on the law at that time. This reveals their complete ignorance about what these changes are actually doing. What they fail to understand is that under the law at the time, between 2002 and 2010, taxpayers could not claim immediate deductions for what were essentially capital items, such as goodwill. The 2010 amendments changed this position. What we are now doing is taking away the unanticipated and unintended windfall gains arising from those changes. In fact, this bill confirms that consolidated groups will still be able to claim more deductions for those years between 2002 and 2010 than they would have been able to under the law as it stood when the coalition were last in government.

Schedule 3 to this bill removes unintended windfalls from the 2010 changes that would provide consolidated groups with inappropriate tax benefits, benefits that are not available to companies and small businesses outside the consolidation regime.

Taxpayers who did act on the law at the time, between 2010 and March 2011, are largely protected. Taxpayers who have written advice from the tax office or who have already finalised their tax returns are also protected. We are acting appropriately to protect the integrity and fairness of the tax system and to remove these unintended windfall gains.

It is true that we need to backdate these changes to the start of their respective regimes. The government never takes lightly the decision to make retrospective changes but there are circumstances where retrospective legislation is justified. The Board of Taxation said that the 2010 changes went much further than was intended and the Australian parliament rightly considers each proposal for retrospective legislation on its merits. Like this case, this is generally only done where the law is operating in a manner inconsistent with the parliament's intention and where there is a significant risk of revenue loss. The revenue at risk here from these unintended windfalls is definitely significant. This bill protects over $6 billion of revenue at risk. To demonstrate the lack of credibility of the opposition on this question of retrospectivity: they seek to come into this place and, whiter than the snow, suggest that they have never supported, and they never will support, retrospective legislation, particularly in the tax context. Do not have a look at what they say; have a look at what they did when they were in government. They introduced numerous measures, many of which were backdated by up to several years, in order to go back and ensure that the original intent of a policy was actually delivered, and there were numerous examples. This particular bill also seeks to protect the rights of working people, which they are seeking to oppose. In the very same week when these matters are being debated, when they come in and say that they never support retrospective legislation, when they have done that in the past, their New South Wales Liberal colleagues are supporting retrospectively ripping away the entitlements of workers with changes to the workers compensation scheme in New South Wales. So retrospectivity is something that they say they oppose, but when they were last in government they embraced it, where it was appropriate or where they deemed it to be appropriate, and in New South Wales this week we see them retrospectively ripping away the rights of working people. Do not listen to what they say; look at what they do.

I will also be moving an amendment to remove schedule 4 to the Tax Laws Amendment (2012 Measures No. 2) Bill 2012, which will be introduced into parliament at a later date. I commend the bill to the House.

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