Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

In the two years the coalition have been in government, we have had the enormous job of cleaning up Labor's mess—mess that damaged the economic prosperity of this country, suppressed job growth and retarded wealth creation. We have repealed the carbon tax—something they said would not and could not be done. We have done the same with the mining tax—something they said would not and could not be done. We have restored integrity to the borders of this nation. We have put the people smugglers out of business—something, again, they said would not and could not be done. We have also fixed the shameful unclaimed moneys legislation whereby kids' bank accounts that had no deposit or withdrawal for 36 months were confiscated and taken by the government. We have also repealed enormous quantities of red tape. In Sydney, my home city, after decades of indecision we have made the decision on where Sydney's second airport will be—which will actually be the first airport for Western Sydney. We have made that decision. And we are getting on with starting to build the roads of the 21st century. We are winding back the deficit, despite the fact that over in the Senate they try to block every piece of sensible legislation we put through. These are the achievements that we have had in the last two years.

With the Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015 we are doing exactly the same thing: cleaning up the mess that the Labor Party created. Back in June 2003 amidst the chaos and confusion in the dying days of the previous Labor government, they legislated an amendment which would require the Commissioner of Taxation to publish—publicly—the taxation records of all private companies with $100 million in turnover. Private companies are private for a reason. The previous Labor government legislated that they must declare all that information publicly. What for? What were they trying to achieve? This money is all recorded by the Taxation Office. There is no argument that these companies have not paid the correct amount of tax; that is done by the Taxation Office. It is simply a policy of envy—an attack on the integrity of these companies.

Why is this so detrimental to our nation, and why do we need to change it? The first reason is that it has always been a fundamental principle of our nation and our laws that a private individual's affairs with the Taxation Office are kept confidential. If you require private companies to declare their taxation records, you are in effect requiring private individuals to publish their private tax affairs. This is simply contrary to all good taxation policy. But that is what the previous Labor government wanted to do. There is some urgency in this legislation, because the first of these records would have been published by November 2015.

The second reason why you cannot have private companies having to publicly declare their taxation records is commercial risk. There are a few reasons for this. In this country recently, because of our concentrated markets—because the failure of our competition law has allowed market sector after market sector to become overly concentrated—we have seen many large companies misuse their bargaining power. We saw it recently with the Coles supermarket chain when it demanded payment from suppliers that it was not entitled to by threatening harm to suppliers that did not comply. When you demand a payment for something you are not entitled to and you threaten harm, to me that is nothing other than extortion. That is what we have in the commercial relationships of companies in Australia: large companies misusing their bargaining power. Coles did so because of purported 'profit gaps' from the supplier that had not been subject to a prior agreement. The whole problem with what Coles did is that they did it post contract. That is what was unconscionable conduct. They could have engaged in exactly the same conduct—made those demands of those companies to fill their profit gaps—if they had done it pre contract. Nothing under our laws would have stopped them. Therefore it is very important that private companies be able to keep their profitability, their rate of profit and their rate of return to their private shareholders confidential.

If I am working for one of those large supermarket chains and am sitting down in contract negotiations with a supplier, if I am able to get hold of their private taxation records and know how much profit they made the year before, that gives me the ability to—excuse the unparliamentary language, Mr Deputy Speaker—screw them even further. If you know the profitability of a private company you are working with and you have market power, you can abuse that market power to squeeze more profit out of them. That is the reason why private companies are private. The other reason we see in the retail leasing sector of this country, where large shopping centre owners can use their market power to squeeze their tenants. If they are able to know what the tenants' total sales are as a group and know what their profitability is, when it comes to sitting down for contract negotiations they are able to use that information, which should be kept confidential in the Taxation Office but is made public under the policy of the previous Labor government, to screw those companies' profitability.

The third reason is simply safety and security. What we are asking is to have the main owners of these companies—private companies that are paying the correct amount of tax to the Australian Taxation Office—to declare their records. We live in a hostile society. We have already seen examples of the risk of kidnapping and extortion. These people should not have their private records, their private wealth and the profits they have made the previous year exposed to every villain in the country. But that is what the Labor Party wants to do. If nothing is done—if this legislation does not go through—those records will be made public by the end of November.

But the main reason why this is poor policy is that it dampens entrepreneurial activity. If a private individual has a company that is turning over, say, $80 million to $90 million they will be concerned if they increase their sales and perhaps hit that $100 million threshold that they will have to disclose all the taxation records of that company to the public—to any Tom, Dick or Harry. Why should they? That will deter entrepreneurial activity in this country and that is something that those on that side of the chamber simply do not understand. They do not understand the importance of entrepreneurial activity for the wealth creation and job creation of this country. It is entrepreneurial activity that triggers innovation, new products and services in this nation. We need to do everything to protect, nourish, encourage and reward entrepreneurial activity. But forcing these people to make public their confidential taxation records will dampen that entrepreneurial activity.

We have seen how harmful this can be to job creation. Take the example of New South Wales versus Victoria. We have seen a change in government in Victoria, with a left-wing socialist government coming in. It has ripped up contracts and dampened entrepreneurial activity in that state. We have seen the New South Wales government, with a more free market Liberal government, the Liberal coalition government, that understands the importance of protecting and nurturing entrepreneurial activity. And guess what we have seen in job creation since the start of this year? In New South Wales, where that entrepreneurial drive and activity is encouraged, rewarded and respected we have seen the creation, since January this year, of 122,000 full-time jobs. Guess how many were created in Victoria. Have a guess. If you guessed zero, as compared to New South Wales with 122,000, and thought that Victoria had created zero jobs, you would be wrong. In fact, in the same time that 122,000 full-time jobs have been created in New South Wales, Victoria has lost over 6,000 jobs. Victoria has gone backwards because its government does not understand the importance and value of entrepreneurial activity, by ripping up contracts and giving power to the unions. Why would someone want to go and invest their money in Victoria with such a government? Is it any wonder we have seen job creation in New South Wales and a lack of jobs in Victoria?

That is why this legislation needs to pass and why it is good legislation. We need to ensure that businesses in the private sector can invest and run their companies, do all the reporting they have to do to the Australian Taxation Office—no-one objects to that; they must comply with the letter of the law—but they should not and cannot be made to disclose those records publicly. This was another shameful policy of the previous Labor government. We are fixing it.

This is one of the many hard jobs that this government is doing. There has been much criticism of this government in the press, but what is not realised is the impossible task that we have faced, the absolute policy mess that we have inherited in almost every single portfolio—complete and utter policy disaster. And repairing these things and repairing Labor's mess is hard work. It sometimes makes leaders of this country unpopular. No-one likes to know that they are having something taken off them. It is very easy as a politician or as a government to give people things—it is very easy. It is very easy to borrow the money and have another government down the track pay it off. It is very easy to do that. Each year we have to find close to $14 billion, just to pay the interest on the money that these guys borrowed over six years. That money has to come from somewhere. We face tough decisions in this country.

Leadership in this country is not easy; it is hard. When you make hard decisions it is very easy for every man and his dog to go out there and attack you. But that is what leadership is about; it is about making hard and unpopular decisions. It is about going through patches where you will be unpopular and when your polling results will go down. But, ultimately, good government in this country is about making those hard decisions and, when the election time comes around, the citizens of this country respect you. It is not about popularity; it is not a popularity contest. We continually face some very hard decisions in this country. This bill goes to some.

So far, we have done a lot of hard work, but we still have a lot more hard work to do. We still have to wind back that budget. We cannot continue to go on borrowing money and running up that debt for future generations. We can make all the decisions we want to here but, if Labor and their mates the Greens on the other side of this House, in the Senate, block the legislation, that will make it harder and harder and harder. This is a good piece of legislation. I hope those on that side of the House understand the mess that they created, understand how faulty their ideas are and that they get behind the bill and support it. I commend this bill to the House.

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