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

I rise to speak on the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 and support the amendment moved by the member for McMahon. I wish to make it abundantly clear from the outset that Labor, of course, support the collection of GST on low-value imports in principle. However, obviously, we want to see a model that is workable. Any changes to this process should have a high degree of compliance and not result in significant adverse consumer outcomes. To ensure this occurs, there must be a 12-month delay to the commencement of the legislation. That means moving the start date back from 1 July 2017, only a couple of weeks away, to 1 July 2018. That is our recommendation.

To get this important change right—which I know has not come out of the blue; Labor governments have looked at this—we still need to have a Productivity Commission review of the proposed legislation to consider all alternative models, not just a vendor registration model. We also need to report on the possible compliance mechanisms and provide recommendations for changes to allow parliamentary consideration well ahead of a start-up date of 1 July 2018.

The bill before us amends the A New Tax System (Goods and Services Tax) Act 1999 to ensure that GST is payable on certain supplies of low-value goods that are purchased by consumers and then imported into Australia. This bill defines 'low-value goods' as being $1,000. These products will now be subject to GST collected on behalf of the government by online platforms, just as they would be if they were sold in one of the shops in Sunnybank, in my electorate.

When the GST was first introduced, it was not normal for too many domestic consumers to purchase goods from overseas from online retailers, who have blossomed in recent years. Sadly, it has become increasingly common for Australians to choose to make purchases in this way. That is the market reality we are left with today. People are shopping overseas while they catch the bus home from work. People are shopping overseas while they mute an ad during a TV show. That is how easy it is to shop nowadays with modern telephones. This represents a risk to the integrity of the GST system and has the potential to place Australian suppliers at a competitive disadvantage. Of course, Labor will always support a level playing field for Australian businesses. We will do all that we can to champion Australian businesses. But it is vitally important that we get the details right. The devil is in the detail.

Before I continue to look further at this legislation, I think it is important that we consider it in the context of it being a revenue measure. In doing so, let us have a look at this government's record in the run-up to the start of its fifth year in government—a time for reflection. Shortly after that 2013 federal election, I think it was, I vividly remember that Treasurer Joe Hockey, disgraced former Treasurer Joe Hockey, released his 2013 mid-year economic update. Mr Hockey and the Minister for Finance, Senator Cormann, declared that gross government debt was set to reach the unthinkable level of $667 billion. They reassured us, saying that this was okay because the Liberals were here and they were ready to fix the 'debt and deficit disaster'. Remember those trucks driving around the place, telling us about that debt and deficit disaster? So let us look at the contrast between that 2013 MYEFO and the Liberal budget delivered last month.

A couple of question times after the budget, the Treasurer admitted that gross debt would actually continue rising, to $725 billion, on the coalition government's watch. In case anyone listening at home is unsure of those numbers, I repeat: yes, gross government debt has skyrocketed on the coalition's watch. The gross debt figure is bad and has blown out under the management of the Liberal Party and their partners, the National party. How about net debt? This is often used as the more reliable indicator of the health of the national balance sheet. Well, the budget papers confirm that net debt will rise to 20 per cent of GDP. Not since World War II has net debt been that high. The last Labor government never had net debt reach 20 per cent of our economy.

The Treasurer's budget shows that new record net debt for the next three years as continuing into the fifth and sixth years—and, hopefully, the final years—of this government; a deficit for the coming 2017-18 year which is 10 times bigger than what was predicted in the Liberal's first budget; and gross debt equivalent to $20,000 for every man, woman and child in Australia. This is from the party that claim to be the better economic managers. That is a complete furphy. Those opposite lectured the Labor Party for years while in opposition about how they were going to reach surplus. I think Joe Hockey said that they were going to reach surplus in his first budget. I remember their first budget, that 2014 budget. I think the member for Lilley might remember it as well. How did that go? We now have a government with increased taxes and increased spending. The party of supposedly responsible spending and taxing have shown that they have totally lost control of the economic situation.

It would be remiss of me to reflect on the inability of the government to effectively manage the economy without discussing the 2017 budget. The Treasurer mentioned 'fair', 'fairer' or 'fairness' 10 times during his budget speech, but just because he uses those words does not make the budget fair. It is unfair to cut the tax of high income earners while at the same time increasing the tax for low and middle income earners. It is unfair to make hard working Australians pay for a $65 billion tax giveaway to big business. It is unfair to cut the take-home pay of 700,000 workers by up to $77 a week. But this is what the Turnbull government has either announced or stood by and allowed in its unfair 2017 budget delivered just one month ago.

This government is so out of touch that they do not understand it is fundamentally unfair to give a tax cut to millionaires and a tax hike for everyday Australians. This budget demonstrates that the Turnbull government's priority will always be to look after the top end of town—the big corporations, many of them foreign; the conglomerates; and the millionaires and billionaires—and not the everyday Australians, not the battlers, not the middle class with aspiration. There is no other way to interpret a budget that is so fundamentally unfair to ordinary working Australians, especially at a time when the costs of living are getting out of control and wages are stagnating or dropping. The Turnbull government are so out of touch they just do not understand that real wages of Australian workers have effectively gone backwards. The annual wages growth of hardworking Australians is now at the lowest level since the ABS first published data back in 1997.

Hardworking Australians, whose take home pay shrunk in real terms, are being asked to pay more in tax while millionaires will pay less from 1 July. If you earn $60,000 a year you will have to pay an extra $300 in tax; but if you earn $1 million a year you get to pay $16,400 less. How can that be fair in the Australia of 2017? The reason millionaires will be paying less is that the government is refusing to continue the deficit levy. Remember when the deficit levy was introduced—that was the levy brought in by former Treasurer Hockey to repair the budget. Is the budget repaired? Far from it—it is now 10 times worse. So this is the very worst time to be removing this levy.

So how is that for some revenue measures the government can consider? They could not go ahead with the $65 billion corporate tax giveaway. They could maintain the deficit levy. They could not cut the taxable income of 700,000 Australians who rely on penalty rates and who then spend that money in the economy. Or how about Labor's reforms to negative gearing and capital gains tax concessions? There are many other options available from the Labor Party, put forward by the member for McMahon and the opposition leader, Bill Shorten.

In the Labor Party, we are not prepared to be a small target opposition. I say that proudly. We have been prepared to take on budget repair—in fact, we have no choice when faced with gross economic mismanagement from the Liberal government. With the botched economic management we have seen under those opposite, you might forgive me for not having blind faith that the government is best placed to enforce this GST legislation change.

Following the Senate Economics Legislation Committee public hearings and report into the bill, Labor still has significant concerns with the legislation. These are mainly about the implementation design, the lack of consultation by the government and Treasury, the low compliance rate and the lack of a regulatory impact statement. The change to these GST arrangements was announced in the 2016 budget and slated to commence on 1 July 2017. Hearings by the Senate inquiry into the bill unearthed significant concerns amongst stakeholders that a commencement date of 1 July would not enable enough time for preparation. Even if this was the best bill in the history of the parliament being planned for commencement from 1 July, why are we here talking about it on 12 June? There are only a few days until this kicks off. The government is allowing no time for businesses to adjust and to allow the systems to be put in place to see this rather significant change implemented. In fact, the government-dominated Senate Economics Legislation Committee also recommended the bill's implementation date be delayed by one year—I stress, that is the government-dominated Senate Economics Legislation Committee.

So who is there left to convince that the commencement has to be pushed back? If this extra year were agreed to by the government, it would allow the government to better engage with stakeholders to address concerns raised specifically about implementation and other matters of concern with this piece of legislation. While the government often chooses to lecture us about bipartisanship, here is an example of where the Labor Party has offered bipartisan support, agreed to the principle of the legislation and asked for greater consultation about the implementation of this significant change. It looks as though this olive branch has been rejected by the government and the Treasurer, who have both managed to completely bungle the implementation of the GST threshold changes.

This brings me to the next area of policy change, and that is enforcement. In short, in the Senate committee inquiry, eBay claimed that Treasury officials had told them they expected a 25 to 30 per cent compliance rate from the model set out in this legislation. Treasury officials later stated that they expected this compliance rate in the third year of operation and for it to reach maturity in 2022-23 at 54 per cent. I am not familiar with the modelling. However, how can this bill in its current form purport to level the playing field while only having a 54 per cent compliance rate target? The Senate inquiry made it clear that overseas jurisdictions—for example, the United States and China—will not enforce the measure on the tax office's behalf. So compliance with these measures will largely be reliant on the goodwill of overseas operators. Clearly, that is not good enough.

I now want to go to the final area of this legislation that the government has managed to bungle. As everyone is aware, the Treasurer likes to talk about reducing the impact of red tape. Yet in this case he has failed to produce a regulation impact statement. I remember that in the 44th Parliament we had those grand occasions called the red tape repeal days. That was the member for Warringah's great achievement and great gift to the nation! We had a conga line of backbenchers lining up to talk about the red tape they were reducing. Sadly, this Treasurer is cancelling the red tape reduction parties. Instead, he has chosen not even to consider the impacts of this legislation.

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