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

by leave—I am pleased, on behalf of the coalition, to raise some of the objections put forward in the dissenting report by coalition members with respect to this so-called inquiry—predominantly because there was no inquiry. The Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013 was a bill which was referred for inquiry to the House of Representatives Standing Committee on Economics for which there was no inquiry. Liberal members were particularly concerned because it did not provide us with an opportunity to test the information that was provided—to test, not only in terms of public opinion but also with a number of key and specialist stakeholders, a number of the assertions that were made by various parties and of course by the government in relation to this bill.

With respect to questions about the financial impact of this bill and specifically how schedule 1 applies to part IVA of the Income Tax Assessment Act, the explanatory memorandum to the bill states:

The amendments are expected to prevent the loss of over $1 billion a year.

But the reality is that there was very little detail provided as to how this amount had been quantified. Also, it would have been prudent to confirm whether there was any financial impact from the changes put forward in schedule 2 of the bill, relating to the modernisation of transfer pricing rules, despite the fact that the explanatory memorandum stated that the impact would be nil. On those two principal bases alone, we as coalition members of the Standing Committee on Economics have sincere and grave concerns that we did not have the opportunity to inquire into this bill.

Specifically, with respect to schedule 1, coalition members have legitimate concerns that the drafting of this schedule may once again be an overreaction by this Labor government with respect to the operation of part IVA of the Income Tax Assessment Act. There have been a number of instances over the past several years with respect to part IVA where the Commissioner of Taxation has lost high-profile court cases, and there is a real risk, frankly, that the government, via these amendments, is overreacting and giving the commissioner too much power to raise tax and penalties in the context of alleged income tax avoidance. I note that this is a view that seems to be held and shared by, among others, the Tax Institute, the Corporate Tax Association and the Law Council of Australia.

With respect to schedule 2, the modernisation of transfer pricing, the reality is that Australia's transfer pricing regime has stood the test of time. But the committee, as a consequence of not holding hearings, was unable to look at whether or not the new proposals that have been put forward, the amendments encapsulated by this bill, will in fact achieve the same longevity as the previous framework did—and, again, we do not know whether or not this has the full support of stakeholders. For example, many submissions, including from the Corporate Tax Association, PricewaterhouseCoopers, KPMG and the Tax Institute, all shared our concern about ensuring that it was robust and workable and will stand the test of time. But, as I said, without the opportunity for a public inquiry, we do not know whether or not that is the case. I note that the TI—that is, the Tax Institute—said on page 7 of their submission:

… we are concerned that the Bill as currently drafted will not yield many of the lauded simplicity and certainty benefits and will increase the compliance burden especially and disproportionately on small to medium enterprises.

Now, that is something that resonates with coalition members, because this side of the chamber understands small business; this side of the chamber has a background of small business. And, frankly, it stands in stark contrast to, firstly, the government's lack of understanding on small business and, secondly, the sometimes hollow safeguards or guarantees the government put forward with respect to the application and consequences of bills that are introduced. So, for those reasons that I have outlined, we dissented from the main report.

I want to thank the committee secretariat for their assistance to the government members and to some extent, albeit minor, to the coalition members! But it has ever been thus and, I suspect, always will be thus. I am grateful to have had the opportunity to speak.

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