Craig Laundy (Reid, Liberal Party) Share this | Hansard source

Before I begin in earnest, I would like to attach myself to the end statements from the member for Oxley about the importance of employers paying superannuation. As someone that prior to being in this place has paid more than I care to imagine into the accounts of people's superannuation over the last 23 years from work in my father's business, seeing many of my staff retire from our business and live on their savings afterwards, I cannot agree more, but I will say more about that in a minute.

On the night that we won the election the Prime Minister uttered those now famous words:

… I declare Australia is under new management and is once more open for business.

While that means to a lot of people immediately new business, what it means to me as a prior existing business operator in this country is getting out of the way of existing business too. It is to the Prime Minister's credit that he has sought to keep this in his portfolio.

I note today that we are talking about the Treasury Legislation Amendment (Repeal Day) Bill 2014, and I want to applaud the Treasurer and the Parliamentary Secretary to the Treasurer, the member for Moncrieff, who have taken up the challenge in this set of measures. It is not just the Prime Minister; it is that the Prime Minister took it in his portfolio and put in charge the member for Kooyong, Parliamentary Secretary to the Prime Minister, to drive this agenda. And I am privileged that not long after being elected, the member for Kooyong made contact with me, and some other colleagues who will talk shortly on this bill, and asked if I would give him a hand in the great state of New South Wales given my background. I of course jumped at the opportunity. Over the last 12 months, one of the great things for me has been to work with the member for Kooyong in liaising with other ministers' portfolios in an effort to find ways that we can get out of the way of businesses.

Why is it so important? You have heard since May, discussion always gravitates in budgets to the expense side of our national profit and loss statement. At the moment we are about to have the MYEFO, in which I believe we will find that the discussion starts to move to the revenue side of the profit and loss statement as we come under pressure.

But one of the things that we do not realise, in my humble opinion, is that as government we are not just regulators and we are not just legislators. We are ultimately depending upon the company structure or the ownership structure of every business that operates in Australia irrespective of size. We are a 'shareholder', and the more we can do, irrespective of ministerial portfolio, to get out of their way—and I mean get out of the expense side of their profit and loss statement—the more money will flow to their bottom line. Why is that important? Firstly, because they make more brass, and secondly, so do we as government. That is where we are battling. And that is the part of this deregulation agenda and narrative that this government, I do not believe, have expressed strongly enough to this point. It is not just about making life simpler for business—yes, that is important; it is about enabling them to increase their bottom line, their profit. Why? Because we go for the ride. And, at a time when revenue is short and vulnerable, the more we can do this, the better we will be. It will allow us to focus less on the expense side of our national profit and loss statement in our budget and focus on where we can better spend our money.

But I draw your attention back to the legislation in front of us, and I note that this bill forms part of our whole commitment. The measures contained in this bill improve and simplify the operation of laws relating to taxation, superannuation and shareholdings in certain financial sector companies. The bill contains a number of measures: it repeals the payslip reporting provisions in the superannuation law that would have increased the regulatory burden on employers beyond that currently imposed under the Fair Work Act legislation; it simplifies the taxation laws by removing inoperative provisions, consolidating duplicated provisions and moving longstanding regulations into the primary law; it reduces the regulatory burden on the associates of individuals seeking to obtain a shareholding of more than 15 per cent in certain financial sector companies; and it rewrites the definition of 'Australia' into a single location in the new tax law, for use across all tax laws in a simple and coherent form.

In terms of employer reporting of superannuation contributions, this government is providing certainty for employers—that they do not need to be preparing for significant changes to the software that generates their payslips in respect of superannuation reporting. The government will repeal duplicative provisions from the superannuation law that allow for regulations to be created, prescribing additional information to be included on employee payslips on superannuation contributions. Labor had intended that these regulations would be made, specifying that employers had to report on payslips the amount of superannuation contributions and the date on which the employer expects to pay them. However, Labor never made the regulations. This measure will not affect the information that employees currently receive on superannuation contributions on their payslip.

Under the Fair Work Act, employers are already required to at least report details of employee superannuation entitlements that accrue during the pay period on an employee's payslip. If employers were required to report actual contributions and payment dates, they would need to invest in major upgrades in their software—once again, a large expense on the expense side of their profit and loss statement, decreasing their profitability. The benefit for employees on this move would be marginal.

Most employers pay their superannuation. Even if reporting actual superannuation contributions on payslips were mandated, employers who did not comply with their superannuation requirements would be unlikely to disclose this on their payslips. Also, employees may not take regular notice of what is reported on their payslips. I note that 70 per cent of employees who do not receive their superannuation entitlement from their employer do not make a complaint to the Australian Taxation Office until after they have left the employer. This is a real shame. This may be because they do not want to jeopardise their jobs, and changing the information on superannuation contributions required to be reported on payslips is unlikely to change that. The ATO investigates every complaint received about unpaid super. Their risk analysis work allows the ATO to target actions against high-risk industries and high-risk employers. Employees can now also typically check online via their superannuation fund whether their employer is making regular superannuation contributions, without having to wait for an annual statement.

The consolidation and repeal of tax provisions measure in this act simplifies the taxation laws by consolidating duplicated taxation administration provisions contained in various taxation acts into a single location in a single act. It also repeals spent or redundant taxation laws, such as the older harsh penalty regimes, and moves longstanding regulations into primary law. One such item in this bill has to do with the commissioner's power to obtain information. Currently, if a taxpayer wants to know what information the commissioner has the power to obtain, they need to refer to over 10 different acts. As a result of these amendments, a taxpayer will now only have to refer to schedule 1 of the Taxation Administration Act 1953.

The current tax law is complex, difficult to understand and frequently costly to comply with. For example, the current provisions dealing with tax file numbers and investment income reports provided by investment bodies to the Commissioner of Taxation are overly prescriptive and difficult to comply with. They are not sufficiently flexible to allow the commissioner to continue to pursue further ways of reducing compliance costs. Rewriting the tax file number and investment income reporting will increase the Commissioner of Taxation's flexibility to facilitate modern reporting methods, which should reduce compliance costs for investment bodies.

Overall, the changes will result in a material reduction in the size of the taxation laws, with one or two sections replacing in excess of 50 existing provisions. Removing inoperative provisions, consolidating duplicated provisions and moving longstanding regulations into primary law does not alter any of the current tax policies. However, it does make the tax law easier to use and easier to comply with. Tidying up our tax laws in line with good legislative practices is an important part of the care and maintenance of our tax system.

With reference to shareholding approvals in certain financial sector companies, the government in this measure removes an unnecessary burden on the associates of a person—for example, a person's partner, relatives or related companies—who is seeking approval for a shareholding of greater than 15 per cent in certain financial sector companies, such as banks and insurance companies.    Currently, when a person is seeking a shareholding of more than 15 per cent of a financial sector company, they must seek approval from the Treasurer for the shareholding. The associates of the person must also seek approval from the Treasurer for the shareholding, as the Financial Sector (Shareholdings) Act 1998 deems the shareholding of the associate to be the same as that of the person seeking more than 15 per cent of the shareholding. This approval requirement applies to an associate even where the associate has no actual shareholding in the company. This measure removes the technical legislative trap that imposes an unnecessary regulatory burden. The changes in this bill do not compromise the examination of a shareholder's controlling interest. Associates with a shareholding are still required to be considered as part of the main applicant's shareholding to determine if they need to seek approval from the Treasurer for that shareholding.

There is the measure to rewrite the definition of 'Australia'. I don't know about you, member for Bass, but, quite frankly, I found this one to be a little bit bizarre; but it is there. This measure rewrites the definition of 'Australia' into a single location. Who would have thought it? If you want to get something complicated, get government involved in it. They can do it every time—make no bones about it. This allows it to be used across all tax laws in a simple and coherent form. Finally, we have got Australia sorted, it would seem—at least in the realm of the tax world. This measures addresses the problem that the current definition of 'Australia' for taxation purposes is complex, overly detailed, and expressed differently in different parts of the taxation laws, despite the fact that the laws are intended to achieve a simple and largely equivalent result.

Currently, if an individual working on an oil platform near Australia wanted to determine whether or not they had to pay Australian income tax, they would be required to navigate through the myriad provisions in up to 13 different Commonwealth acts. I refer to my earlier point: if you want to make something complicated, get government involved. To do away with the complex and ad hoc nature of the existing definition, the amendments codify and consolidate in one place a definition of Australia for most tax purposes. Rewriting the tax laws, on average, has reduced the size of the provisions being rewritten by two-thirds. This assists taxpayers to better understand and comply with the laws, reducing their compliance costs. This takes another step towards achieving a single income tax assessment for Australia.

Mr Deputy Speaker, I refer to the commencement of this speech—when there was actually a different Deputy Speaker in the chair—where I stated that the narrative of this government from night one has been that Australia under our governance will be open for business. Whilst many immediately come up with the thought that that is about new business, it is also about what is and will always be the engine room of this economy—small- and medium-sized enterprises. They employ over 70 per cent of the people in this country today.

The best thing that any government can do—and I note that the Prime Minister plans to take this to COAG as a major reform item; and I mentioned earlier my experience in family business pre this place—is to get out of the way of business. This must be an agenda driven through all levels of government—through local government, state government and federal government. Why? Because by working together and getting out of the way of business, getting out of the expense side of every profit and loss of every business in this country, irrespective of size, it will allow that company to maximise their bottom line. The sooner we as a government work out that we are not just legislators, we are not just regulators, and we make that quantum leap to understanding that we are business partners, the better business will be, the better our budget will be and the better our country will be, not only for us—we are mere custodians of this land—but, more importantly, for our children and our grandchildren. I commend the bill to the House.

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