Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I rise to speak on the Tax and Superannuation Laws Amendment (2015 Measures No. 2) Bill 2015 to add to the very thorough contribution made by the member for Fraser. Aspects of this bill are not controversial—aspects of it. The only measure in this bill that has any fiscal impact is the measure that extends the statutory life of in-house software by one year. This was the previous Labor government's initiative. Labor, in its 2008-09 budget, moved to increase the life of in-house software by 1½ years. Software developed in-house could then be claimed as a tax deduction over four years, an increase from the previous 2½ years.

The measure in this bill will mean that software developed in-house can now be claimed over five years instead of the four introduced by Labor. It is a measure that will better align the average useful life of such software for businesses with its statutory life. Over the forward estimates this measure will raise $420 million. Such measures, as touched on by the member for Fraser, illustrate that Labor is always willing to be bipartisan and constructive when it comes to making sensible budget savings. This is consistent with the approach taken by Labor on this measure when we were in government.

The bill before the chamber is tinkering with the tax policy in a very small way. Sadly, it does nothing to address the major issues surrounding tax policy in Australia. It does nothing to address tax avoidance by multinationals—a huge issue at the moment in Australia and in other OECD nations. It does nothing to address the unfair allocation of superannuation tax concessions—something that the government's own advisers have indicated is a problem for the economy and a problem that will become a more pressing issue over the next few years. This is absolutely consistent with this government's inability to tackle major structural reform.

When it comes to economic reform, this Prime Minister and Treasurer are all pea-heart and sinew—there is no economic substance to them. In these difficult times this is not what our nation needs. The unfairness of our current tax structure is nowhere more evident than in the great divide between the haves and the have-nots. At the moment the three most wealthy people in Australia have more wealth than the poorest one million. I repeat: the three wealthiest Australians now have more resources than the poorest one million!

They say that when you study great civilisations such as the Roman Empire, the Greek Empire and the like, if you look at the reasons for the decline in such empires, the main reason is when a great chasm opens up between the rich and the poor—not that I am suggesting that modern Australia is anything like the Roman Empire! If you interfere with Australia's egalitarian organisational principles, you will undermine the very basis for Australian society. I know the member for Fraser has touched on this extensively in his book Battlers and Billionaires. I recommend reading that if you want to explore the topic.

It is interesting to look at the Abbott government's reform priorities and at what they have done and how they have interfered with those egalitarian principles. They have cut family payments for low- and middle-income families. They cut the superannuation tax break for those on low pay, a decision that had particular ramifications for women—two-thirds of the people affected are women. They cut pensions. They forced unemployed youth to have no income for a whole month. And they imposed a 'divorce tax' on people going through the stress of separation. After the Senate rejected it, they went out 14 days later and basically introduced the same tax, the same increase—and then the Senate responded again. This heartless government has one default setting, and it is a lazy one. It is to hit those in Australian society who can least afford it.

Labor knows that there is a need for real reform of tax policy in particular, as was touched on by the member for Fraser in greater detail. The Abbott government is not prepared to touch real reform unless it hits those who cannot afford it. People in my electorate are still talking to me about the Treasurer's first budget and how it targeted those who could least afford it. The greatest claim to fame for the second budget was that it was less bad. That is the great thing that the Treasurer has to cling to: 'My second budget was nowhere near as bad as my first budget'! We saw the other day the Prime Minister jump, like a seagull onto a sick prawn, at the proposal from Premier Baird of a 50 per cent hike in the GST. As we all know, the GST is a regressive tax that hits the poorest hardest. We saw those percentages mentioned in the member for Fraser's speech.

A fair, competitive and sustainable tax system is critical for the future prosperity of this nation. Australia's tax system raises the revenue that governments require to provide the quality public goods and services that are needed by the community. We can see in countries where they do not collect the same amount of tax revenue that there is no safety net. If you stumble or fall or even just get sick in places like the United States, before Obamacare was rolled out, you would basically be on the scrapheap of society.

A key area for reform, in these days where multinationals have challenged the nation state, is reducing multinational tax avoidance. Labor when in office put in place measures to ensure that multinational companies paid their fair share of tax. Those measures would have prevented $4.1 billion in revenue being moved offshore by multinationals—$4.1 billion buys a lot of hospitals, funds a lot of students and prevents a lot of pensioners from having a life of indignity.

It is not a hard concept to grasp. When large multinationals pay less tax, it means that families and small businesses have to pay more tax, especially if you have a government addicted to borrowing, like this one, which has borrowed over $100 billion in the last two years. I remember the member for New England, who is at the table, railing against government borrowing when he was in opposition. He is little bit quieter on government borrowing now, although it has hit record highs. Over $100 billion has been borrowed by this Treasurer, and our grandchildren will have to pay it off. The 19,000 small businesses in Moreton know this, but Treasurer Hockey does not seem to get it. Not only will this government not tackle tax reform at the big end of town; it intends to repeal the tax transparency measures that Labor put in place when we were last in government.

Unlike this government, Labor has proposals for tax reform on the table right now. Labor has proposed greater tax transparency and further anti-profit-shifting measures for multinationals. Before the budget, Labor put forward a fully costed package of tax measures relating to multinationals. Those measures are projected to bring in $7.2 billion in revenue over the next 10 years.

The government should stop trying to protect big companies from scrutiny but concentrate on trying to create a fairer tax structure for all Australians. The actions of the government are not consistent with those of a government that is concerned about all taxpayers paying their fair share, rather than just those in pay-as-you-go systems and small businesses.

The government has orchestrated the sacking of over 1,100 compliance staff from the Australian Taxation Office in the past year. Almost a quarter of those staff members were from the section that specifically investigates private companies. The Treasurer was quick out of the blocks in being tough on new mothers, calling them rorters and double dippers, but raised the white flag when it came to the top end of town.

This is a government that cannot stand up to multinational companies, at a time when nation-states are challenged by accountancy practices—accountancy trickery, really—that allow multinational corporations to avoid paying their fair share. The Australian people need and deserve better than that. We deserve a government that is committed to a fair, sustainable taxation system. I stress those two words: fair and sustainable. One of Treasurer Hockey's first acts was to roll back Labor's measures to tackle profit-shifting by multinationals. That flick of his pen effectively gave $1.1 billion back to multinationals. Just think what we could do for Australian families with that money.

Not only are the actions of the Abbott government weak on tax reform for multinationals; they are sadly out of step with the rest of the world. Who can forget last year's G20, that moment in the sun for Brisbane and Australia, when our Prime Minister, before some of the biggest countries in the world, bemoaned the fact that he could not bring in a Medicare tax? Talk about a great man of vision seizing the moment! Unbelievable. In Ireland, their finance minister has stopped what they call the 'double Irish Dutch sandwich'. That is an arrangement whereby companies transfer money between subsidiaries that are registered in Ireland and those in other European countries. Other countries are closing tax loopholes for multinationals, but our Treasurer, strangely, bizarrely, flying in the face of that, has reopened such tax loopholes.

Mr Hockey has also pushed back key global tax transparency measures negotiated through the G20 that were due to start in 2017. Australia will now be left to watch as the world's major economies start sharing information on company tax. The Treasurer is very strong on rhetoric. He said in September last year:

Supporting greater tax transparency and information exchange is our best weapon to crack down on tax avoidance and evasion right now.

Great words, hollow actions. He talks tough but walks very softly. He is no good on the follow-up.

The other area in which the government are completely impotent is superannuation reform. As we have seen from matters discussed in this chamber, at the cabinet table they have run out of ideas. They do not have a reform agenda or a vision for the future. After attacking the lowest paid in their first budget, with the effects then flowing through to small businesses and an extra 800,000 people joining the unemployment queue in the last two years, the government, after saying no to some Labor reforms, ran out of ideas. Yet our retirement income system is badly in need of sensible reform. It is unsustainable in its current state—as advised by the very people the Prime Minister appointed to advise him—especially in light of the revenue write-downs coming from the resources sector. Thankfully, there are a few little shoots going up in the economy, but the resources sector obviously has some challenges, particularly when it comes to coal and iron ore. So, as I said, we have record levels of unemployment, which also means households are affected by the problems associated with unemployment, such as bad role models and stress.

Australians deserve to have a comfortable standard of living in retirement, but this government is doing nothing about setting up the correct, sustainable system. By design, tax concessions are an integral part of the superannuation system. The great Labor initiative of universal super was not designed to be a tax haven for wealthy Australians. The government's own Financial System Inquiry found that 10 per cent of all Australians receive 38 per cent of Australia's superannuation tax concessions. The top 10 per cent are basically receiving 40 per cent of the concessions. In fact, there are 475 people in Australia with superannuation balances of more than $10 million each. These people earn tax-free incomes of $1.5 million each year. That is just not fair and not part of the Australian egalitarian system. How can this government continue to hit those who can least afford it—pensioners, youth, families—when the wealthiest are earning $1.5 million tax-free each year? This is unsustainable and unfair.

Thankfully, unlike the Abbott government, Labor has a superannuation reform plan. Labor will direct superannuation tax concessions to those that need them the most, which is how the superannuation system was designed to be used, by Paul Keating, and that is to provide retirement income for all Australians, sustainably. Labor's reforms would affect approximately 60,000 superannuation account holders, with superannuation balances in excess of $1.5 million. Earnings from those accounts above $75,000 would not be tax-free but would attract the same concessional rate of 15 per cent that applies to earnings in the accumulation phase. It is not the end of the world for those people. Hopefully, they would still be very comfortable in their retirement. This reform would make a huge difference to the retirement income system as a whole. It is estimated that the revenue from this proposed reform would collect $9.2 billion in the first 10 years. This is a sensible reform. It is the type of reform a good, sensible and brave government delivers. We are not likely to see this type of reform under Treasurer Hockey or Prime Minister Abbott.

The bill currently before the House is, as I said, not particularly controversial, but I would ask the government to step up and show a little bit of ticker when it comes to looking at the positive reforms that Labor has put forward. Good governments need to have the ticker to lead the Australian people. (Time expired)

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