Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Hansard source

The interjection is that it is protecting revenue. It does not raise a dime, yet so urgent is this potent and powerful measure that the parliament is not afforded the courtesy of a hearing about it. You just have to jam it through. When you look at its impact on small business, submission after submission points to an overriding concern about this legislation creating extraordinary additional compliance costs for taxpayers and also uncertainty about what taxpayers need to do and what they need to do differently to ensure that they are complying with these revised transfer pricing tests.

The government comes in here and talks about the evil of these behemoth multinationals, ignoring the fact that there is no safe harbour for small business. There is no carve-out; there is none of the wisdom reflected in the United Kingdom law. I quote from the ICAA's excellent submission, where they say:

In our view, in a proper balancing of compliance costs against revenue risks, it is essential that some taxpayers are completely carved out of the transfer pricing rules. This is on the basis that below a certain point it is just not cost effective or practical to impose transfer pricing guidelines. The UK has recognised this in its transfer pricing rules which provide that SMEs are exempt from the transfer pricing rules. An SME under this definition is one that has less than 250 employees and either:

We note that this approach of completely carving SME taxpayers out of the transfer pricing rules need not however, prevent the ATO from still being able to gather information—

and use its extraordinary toolkit that is available now—

to address any concerns it has around related party dealings by SMEs.

They make the following point:

… the Institute believes that penalties should not be imposed for any adjustment made under Subdivisions 815-B to 815-E on a SME taxpayer that has made reasonable efforts to comply with the legislation—

should be taken into account. Where has that wise counsel gone? The de minimis thresholds of $10,000 and $20,000 proposed here are far too low to achieve their intended purpose. To go after those behemoths that the government likes to say this is about, why are those thresholds so low? The proposition is to raise the threshold to $5 million to have their intended effect, but then we think, 'This is not supposed to raise a dime.' It is a saviour of budgets. It is the headline the government is after. It is an appalling abuse of parliamentary process and it is just further evidence of this dysfunctional, divided and hopeless government. (Time expired)

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