Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Hansard source

Yes, I know. Well, he is not interested in very much, obviously, because he does not know what this bill actually does.

First, I want to start with the comments at the end of his speech about the government's record in managing the debt. I would like to point out yet again, as we have in the House many, many times—and it is clearly in the budget papers, so cannot be refuted—that under the Liberal Party, the deficit has tripled since they won government in 2013 and the debt has doubled. Far from tackling debt and deficit, which seems to be their mantra—every day they get out and say they are doing it—the actual results are completely the opposite. They have tripled the deficit and doubled this country's debt, and they are not on a path to reducing that. In fact, they are far from it, so let's call them on that every time they stand up in this place and make these statements about their great management of the economy. It is really not that good.

The second point I would like to challenge him on is when he called us on the Labor side liars. I get really tired of being called a liar for pointing out that people are not receiving the benefits of this tax cut at this point. I would just like to read the statement from the Treasurer that confirms absolutely that people are not currently receiving the benefits of this tax cut, which is what Labor has been saying. Here is the statement from Friday 2 September 2016:

The Australian Tax Office has confirmed they will now issue the new PAYG withholding tax schedules next week.

So the schedules are not even out. Businesses are operating on the old schedules according to the current law, which is what the ATO was supposed to do. The ATO was supposed to issue schedules according to the law as it is. That is what they did, so businesses are currently using the PAYG withholding schedules according to current law, which do not include this tax cut because it is not law yet.

The ATO has now said they are actually going to bring that forward and issue new schedules, but expect taxpayers to factor in the new lower tax rate from 1 October. There it is in the words of the Treasurer, proving that the statements by the Labor opposition are accurate and proving that the member for Hinkler either does not know what is happening with this bill or is deliberately trying to imply that Labor does not. They are the words of the Treasurer. They prove absolutely what we are saying in this House and what I am about to continue talking about.

This government, in its previous three years and in this term, is proving a level of incompetence that few of us could have imagined. Few of us could have imagined the level of incompetence. We expected some, but I doubt that there is anybody on either side of politics that expected this level of incompetence, whether you are talking about the NBN, whether you are talking about the decimation of Australian science, whether you are talking about goading Australia's car manufacturing industry to leave the country or whether you are talking about the vocational education shambles which is costing the budget billions and putting people in my community and communities right across the country in personal debt that they do not even know about to the tax office. I suspect that all of us who represent communities that have large disadvantaged groups or groups for whom English is not a first language are finding hundreds of people that have been exploited by very shonky providers, without any real remedy offered by this government. Whether you are talking about the census—the mighty institution that we have all been so proud of; that we have all so relied on—disassembled before our eyes in this screaming heap—

Ms Vamvakinou interjecting—

The member sitting beside me is quite right: they did not want to do it. The previous Prime Minister talked about not doing it—doing it in a different way, effectively abolishing the census, before they finally came to their senses but gave us something which has damaged the reputation of one of our incredibly important pieces of infrastructure. The census and our knowledge of ourselves and where we are is an incredibly important piece of the puzzle. Whether it is the uncertainty and the thought bubbles about whether or not the GST will increase to 15 per cent or double taxation—you name it—you can make a list as wide as this room of the things the Turnbull government and its predecessor, under Abbott, tried to do and failed or botched badly.

This week we have seen two new forms of incompetence and I am going to draw them together. One is the Cancer Screening Register and the other is this one. The reason why I am drawing them together is that both of them involved announcements or actions before the election about pieces of legislation that had not passed. This government knew they could not pass them, because they knew they were calling an election.

The management of the Cancer Screening Register, for example—which they gagged and rushed through the House in the last couple of days, trying to get it passed—was outsourced and privatised during the election campaign. The contract was signed four days before the calling of the election and then it was announced during the election campaign that they had given the contract to manage the Cancer Screening Register to Telstra—before there even was a register. Until that bill passes through parliament, there is no Cancer Screening Register. What kind of government—what kind of business, for that matter—lets a contract for something that does not actually exist when they cannot guarantee that it will?

This is another case. There was an announcement in the budget about a tax cut from 1 July, when they knew full well that they were not going to pass the legislation to make that law until well after 1 July. They knew that. They had the opportunity to deal with it. Immediately after the budget there was bipartisan agreement on this very modest tax cut to assist a particular group of taxpayers with bracket creep. They knew immediately after the budget that they had the bipartisan support of the opposition and that this could have passed. It is a very simple amendment. It is just a tax schedule—not a biggie, very easy to draft and very simple—and, with bipartisan agreement, it could have gone through at the speed of light. They even called us back for a special sitting a couple of weeks after the budget. They had the time to do this and they did not. Yet they announced that this tax cut would apply from 1 July even though the law would not have been passed. They were expecting the tax office to apply a law that had not passed to the tax schedules from 1 July.

So there are two instances where this government have either been ridiculously incompetent—I suspect that is part of it—or had a profound disrespect for the parliament. They thought that they had the right to actually move ahead and let contracts for things that did not exist because the parliament had not approved them. They expected the tax office to apply a law which did not exist, because it was their wish that they would. They also showed overwhelming arrogance back in May last year, believing that they were going to win the election and that therefore they could get whatever they wanted, whether parliament agreed or not. It was one of those three: sheer incompetence, profound disrespect for the parliament or incredible arrogance that they were going to be in power and they were going to be able to push whatever they wanted through. It turns out that that is not the case. But, as the colleague sitting beside me said, I suspect it is all three.

So here we have this really simple bill before us, the Treasury Laws Amendment (Income Tax Relief) Bill 2016, which changes the tax schedule for a group of taxpayers whose income is between $80,000 and $87,000. It is legislation to implement the budget measure to increase the 32.5 per cent personal income tax threshold from $80,000 to $87,000. Again, it could have been done in a couple of hours in both houses. We understood the deadline; we were ready to do it. There was no legislation. By the way, a lack of legislation was a symptom of the last parliament altogether. We were ready to do it and they did not do it.

However, the Prime Minister and the Treasurer, even though they knew the bill would not pass until much later, both said that the tax schedule would apply from 1 July. Of course, the Treasury and the Department of Finance thought differently. This does not surprise me. The tax commissioner confirmed it in the Pre-Election Economic and Fiscal Outlook—and remember that the PEFO, as it is called, is done by Treasury and Finance independently of government. That is the one time in the whole electoral cycle where those two extraordinarily experienced departments actually get together and speak entirely on their own behalf. There is no political interference in the PEFO, and this is what the tax commissioner confirmed then: that these tax cuts would not be delivered from 1 July, as promised by the Treasurer, but instead would only be implemented when the relevant legislation had passed the parliament. Again, that is pretty standard for the tax office. Tax office stuff, in many ways, is really simple. You wait for the law to be passed and then you apply it according to the schedule—very simple. The Pre-election Economic and Fiscal Outlook, prepared by the secretaries of the departments of Treasury and finance, says on page 40:

There are a number of tax measures included in the 2016-17 Budget that take effect on or before 1 July 2016. Many of these measures can be legislated at a later time within 2016-17 without materially affecting the estimates. However, the Commissioner has indicated that the Ten Year Enterprise Tax Plan—targeted personal income tax relief measure requires the relevant legislation to be passed before the change will be incorporated into the income tax withholding schedules.

Of course it does.

Then we seemed to see the Prime Minister and the Treasurer a little concerned about this difference between what they were saying and what the tax office was saying, and so then, on Friday, 2 September 2016, we had this extraordinary circumstance where the Australian tax office indicated it would apply tax schedules on the assumption that they will be passed into law. They are going to apply them from 1 October. Again, this is not usual behaviour; it is extraordinary and it does mean that, from 1 October, small businesses, which have already entered their tax schedules for the year, are going to have to enter new ones. All those small businesses—and I ran one too, like the member opposite and, I know, many others—set up their regular payroll as automatic payments from the banks so they do not have to do it every fortnight or every month or every week. They will have to go back and redo all of those automatic payments. In some cases, this will be for many, many staff members. So there will be this extraordinary paperwork burden on small business and big business as the schedules change over the next month or so. Then, of course, every taxpayer who earns between $80,000 and $87,000 over this financial year will have their tax adjusted at the end of the year. So there will be a great new job for the tax office at the end of the year—again, this is not something that usually happens, because tax schedules usually come out for the start of the financial year and remain in place.

Again, this is a really interesting situation that we have and it can only be explained by incompetence. If this was the only incident that we could find of a government stuffing up the implementation of something, then perhaps we would not have as many speakers on this side calling it for what it is. If it was just this, I think we could all kind of say, 'Well, yes, every now and again it happens. Maybe the Treasurer didn't know when the election was going to be called, so maybe he thought he would have time to put it to the parliament. Maybe Prime Minister Turnbull had not brought the Treasurer into the loop. Maybe, in the great communication that they seemed to have last year, he just forgot to tell the Treasurer, so, when the Treasurer said it would apply from 1 July, he actually thought the parliament would be back in session.' Maybe we could write it off that way, but, given the number of instances of this government botching simple implementation and failing to act when things start to go wrong until they are chronically in appalling circumstances, we have to call this for what it is.

As I said, I do not know whether it is sheer incompetence. I do not know whether it is disrespect for the parliament and parliamentary processes and the fact that parliament makes laws—not the Treasurer and not the Treasurer's office but the parliament makes laws—or an extraordinary arrogance that just assumed that it did not matter what they wanted to do, they would win the election so convincingly that they could ram anything through. But this is yet another case that demonstrates exactly how incompetent this government is.

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