Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Hansard source

by leave—I move amendments (1) and (2) as circulated in my name:

(1) Clause 2, page 2 (table item 2), omit "Schedules 1", substitute "Schedules 2".

(2) Schedule 1, page 4 (line 1) to page 9 (line 19), omit the Schedule.

Schedule 1 of the Tax Laws Amendment (2012 Measures No. 6) Bill 2012 deals with changes to native title benefits and seeks to classify such benefits as non-assessable, non-exempt income so that they are not subject to income tax or capital gains tax. Amendments (1) and (2) circulated in my name seek to excise this schedule from the bill. The coalition is opposing schedule 1 because it introduces a tax exemption for payments made to an individual that if received in comparable circumstances would be subject to tax. I am not talking about compensatory payments for extinguishing native title. Treasury, in its 2010 discussion paper, noted that these payments would be exempt under the current law because the payment is compensation for the loss of a pre CGT asset. Treasury noted that payments received for the suspension of native title could be regarded as receipts in the nature of a return on a capital asset. Therefore, these would normally be regarded as ordinary income. There would be equivalent treatment of a payment where received by a landholder for granting access rights over their property.

The coalition does not support a change to the law that infringes the taxation principle that money received by one person, regardless of derivation or from what activity, should be given the same tax treatment as if it had been received by another person. That is, the coalition is concerned that schedule 1 violates this key principle of horizontal equity. These amendments are likely to act as a disincentive for an individual to invest their native title benefits to provide intergenerational wealth creation as tax will be payable on the investment income earned and the distribution of moneys to future generations. The coalition believes that there is the potential for unsound policy outcomes arising from this particular change. Taxation systems drive behavioural outcomes. The changes put forward by the government have the potential to greatly impact how future payments from industry are made to native title communities and their future generations.

The coalition is disappointed that the government is pushing ahead with this policy in its current form. The government is displaying complete disregard to warnings that have been raised by various stakeholders in relation to this fundamental matter. I would have thought, given that the member for Lyne passed judgment on us, that he would be listening to this. But no, he has other priorities. I note that the government's Attorney-General has written to my Senate colleague Senator Mathias Cormann seeking support from the coalition to pass the bill. The Labor Attorney-General acknowledged that this legislation 'may create unintended incentives for native title payments to be disbursed rather than to be used to benefit communities and help close the gap'.

The member for Lyne said that this may well be used by the coalition to try and generate debate at the front of the pub. I find that extremely offensive, but as it comes from the member for Lyne it does not trouble me at all; he is obviously dealing with his own issues in relation to this matter. But I am troubled by his suggestion that somehow he consulted with the coalition. He did not consult me; he did not consult my office. He lives in his own little vacuum. But he just seeks to justify his own position—no matter what, he grabs it. But the bottom line is that he was the one who said that we need to let sunlight in on these processes. The sunlight from the government's own pen shows that this 'may create unintended incentives for native title payments to be disbursed rather than to be used to benefit communities and help close the gap'.

You know what the government has done? It has set up a working group—a working group to 'identify the best next steps to strengthen governance and sustainability in the management of native title payments'. This working group is just like the great idea that the member for Lyne had of a business tax working group. That went well! It was disbanded because it went nowhere. Or the idea of a summit. That went well, too! The establishment of a government department-led group to work out what to do next is from our perspective simply not good enough. We have higher standards in relation to the treatment of taxpayers. We have respect for taxpayers, unlike the government and the Independent member for Lyne.

If the government has acknowledged in writing that the coalition's concerns are in fact legitimate, why rush the legislation? I will tell you why: because the government is busy chiselling away on its grave in the lead-up to the next election. We are opposing this schedule because we believe that the arguments put forward by the Attorney-General and the government are simply not good enough. Therefore, we are seeking to have this schedule removed from the bill on the basis that it is a further example of a flawed process undertaken by this government in collusion with the independents. They have not properly thought it through. The government has admitted that there are major issues to do with and concerns about this piece of the bill. But they do not want to act on it. They simply want to have more monuments to their incompetence.

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