Scott Buchholz (Wright, Liberal Party) Share this | Hansard source

I rise in this consideration in detail debate in absolute amazement as to why we cannot get a simple answer out of the Assistant Treasurer. I, too, ask the question: why? I think the whole principle of this comes back to trust. Managed investment trusts make a conscious decision to come into our country to invest. As a nation we are net importers of capital. We are net importers of funds. They have been a fundamental building block in creating the quality of life that we have.

In the Standing Committee on Economics hearings we took evidence from Martin Cordina of the Financial Services Council. This may help in understanding why the government has chosen to offer the amendment today. In response to a question at the hearing, Mr Cordina said:

We were disappointed that we were not consulted prior to the announcement being made on budget night.

This bloke is from the Financial Services Council. Whenever I have the opportunity to take evidence from the Taxation Office or from Treasury, their words are always: 'We have consulted extensively with the market. We have consulted with industry.' Guess what—industry did not have a clue that this was coming. Mr Codina went on to say:

Since this government came into office in 2007, we have issued something like 10 media releases which were supportive of subsequent changes that have been made, either to our tax system or regulatory-wise, that essentially had their origins in the Johnson review. We were one of the leading participants in the Johnson review, involved in much of the work that was conducted there. So I guess all I can say is … in this area, that the announcement was made without any prior consultation.

So here you have it—Martin Codina from the Financial Services Council saying that they were not aware that we were going to see, overnight, a doubling of the rate, from 7½ per cent to 15 per cent.

We are asking the Assistant Treasurer why. When you listen to the rest of the evidence provided by Mr Codina, it becomes crystal clear. He was asked:

Is there any evidence for that flight of capital occurring?

That was asked by a member of the government, and he was inquiring whether or not, if there were an increase from 7½ to 15 per cent, there would be a flight of capital out of this country. Mr Codina replied:

There is absolutely evidence of that. Collectively we have quantified in excess of $1 billion, some of which has been made public and some of which is highly sensitive, because of the nature of the foreign investors. In some cases you have sovereign funds—in other words, it would be akin to a foreign government being critical of the Australian government as a consequence of the change.

When you look at the wafer-thin budget surplus that has been forecast and when the Financial Services Council of Australia—a body not to be dismissed or taken lightly—have identified in good faith a potential flight of $1 billion of capital out of this country, it is no wonder these guys are now standing up and saying, a couple of weeks after the budget, 'We got it wrong,' and that we are now having to make amendments.

All we need is for the Assistant Treasurer to stand up and answer our question as to why, because it does come back to trust. Foreign investment in this country is raised on the back of us providing good government. What happens in this room fundamentally underpins the confidence of foreign investment markets in our nation—it is what happens in this room, the way we carry ourselves, our integrity. Business confidence is at an all-time low. Do not take my word for it; have a look at the Australian Chamber of Commerce and Industry-Westpac survey for the last 17 consecutive quarters. The biggest inhibitors of investment in business at the moment are government taxes and red tape. We in this room need to get it right. The shadow Treasurer needs to get to his feet and explain the backflip made a couple of weeks after the budget, because we have to gain the trust of other nations—they have to know they can depend on us—if we want investment in this nation.

See this speech in context