Tim Wilson (Goldstein, Liberal Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018, and, as always, it's a pleasure to see you in the Chair, Deputy Speaker Buchholz!

When I think about the issues facing people around tax in this country, I always think of those thousands of small businesspeople who, whether in retail or running small businesses and activities, spend their days creating commerce and opportunity for themselves so that they can stand on their own two feet and support their friends and their family. Then I think also about the hours they spend at night working through paperwork: the obligations, the regulations, the BAS statements and the reporting requirements under the tax system which take them away from their family, their loved ones and their friends. I have always thought that the very basis of any just tax law is not just that people pay their contribution to the collective aspiration we have for our society, despite our differences, but that there's a sense of justice around making sure we minimise obligations and the burden that is placed on those people to adhere to the tax act.

Tax—paying tax—is not a privilege. Paying tax is a responsibility. Paying tax is a burden. It's when the government comes and takes away from people, compulsorily, their hard-earned work—the reflection of that work in their money. But part of making sure that you have a just tax system—and I put the emphasis on the word 'just'—is that everybody contributes fairly and that the tax system treats everybody equally: we don't have special legal privileges, we don't turn a blind eye to those who seek to avoid their tax and we make sure we capture as much of the economic activity that is engaged in in this country as possible. If we don't do that, if we overburden those mums, those dads, those fathers, those mothers, those brothers, those sisters—everybody who is making a contribution to paying the tax system and keeping it afloat—then what we are doing in giving people a free pass, where they do not have to contribute, is passing the buck onto those who are doing the right thing to benefit those people who can find their way out of it. That is, in the end, an unjust nature in our tax system.

There was a very good book written a few years ago called For Good Or Evil: The Impact of Taxes on the Course of Civilisation. It is a synopsis, looking at the history of taxation. I know it's something that will excite many members—a book on the history of tax—but it is a good read. When you read it, there are some very clear points about tax and how you have a just tax system to support a society, particularly one that either declines or succeeds.

A successful society has a taxation system that is actually relatively simple. It has relatively simple and clear rates so that people have no incentive to avoid it. But, critically, it has relatively low rates as well, and—importantly—everybody makes their contribution to the tax burden necessary to provide for the nation. When it becomes narrow, when it becomes high, when it falls onto the few rather than the many, and when there are incentives and ways and means that people can minimise their obligations, those who can, do. Let's face it, that's many of the problems at the heart of the tax system that we have in Australia today. It is a system that encourages people to minimise their obligations, to set up complex structures to try and minimise their contribution to the tax system. Increasingly, it is a narrow base of people who are paying tax, and they are people earning an income within a defined age range and, principally, at a particular income-earning age.

Every policy around tax and the economy I look at from that basic perspective. How do we make sure that we reverse that trend? And how do we make sure that we have a regulation or system that works for the decent, hardworking, honest Australians in the real economy, not the black economy. The people in the black economy are those who seek not just to avoid legality of their trade and commerce but to minimise their contribution to this nation. In many cases, they take advantage of the goodwill and aspirations of every Australian.

One of the hallmarks of the coalition's historic success is its balanced, evidence based approach to taxation and who shares the burden of our society. We reject attempts by those in the opposition and other minor fringe parties, where we say it should fall onto the few in favour of it falling onto the many, to the millions of Australians who share a collective responsibility for the nurturing of our nation. If government sets the rules for enterprise, then the basis of these rules should enshrine a sense of justice at the heart of it, that there be a level playing field for the Australian entrepreneurial and business community. When it comes to just taxation, our framework should be simple and, as I outlined before, non-discriminatory.

This bill is designed not to add more regulation but to protect our non-discriminatory tax system against the scourge of tax evasion by those who engage in black-market activity. On average, small-business owners spend three hours a week invoicing, bookkeeping, reviewing banking contracts and reporting their tax liabilities. That is time taken away from creating wealth, growing opportunity. It is time taken away from family and friends. It is the human cost of a burdensome tax system that, sadly, so many in the opposition never seem to understand, probably because they've never had to do it themselves.

The government is reducing unnecessary regulatory burden on business to the tune of $5.8 billion annually, but I won't try and pretend I think that is satisfactory. If the truth be told, I think that is the beginning, a start point, and there is so much further to go. Liberals do understand this burden and would never seek to add to it without justification. When sections of the economy start to chronically evade tax, you see a situation where too few carry too much.

This bill tackles one of the foundational ways that people minimise their tax obligations. It is one of the most modern methods by which sections of the economy undermine the integrity of a just tax system. It targets deceit and ensures that businesses report their income accurately and that those who seek to evade and operate in the black economy are caught out. Principally, it targets electronic sales-suppression tools that simply seek to facilitate tax evasion by suppressing or falsifying records or transactions. The tragic reality is, in a global marketplace, there will always be people seeking to find ways to use the advantages of each country's legislation to sell products to minimise people's contributions to them. And we must be forever vigilant. If you want to have a just tax system you have to evolve and adapt the laws with the technology to correspond with it and not engage in the cheap indulgences of so many on the other side of politics today, who constantly seek to demonise good, hardworking Australians who are setting up businesses and running them, but targeting those people and businesses that only survive by nefarious means.

In 2012, the Australian Bureau of Statistics estimated that the black economy in Australia could be as large as 1.5 per cent of Australia's gross domestic product, around $25 billion. Now, let's face it, that is a concerning percentage of enterprise operating outside of the tax system, operating with an unjust tax advantage and operating where they take the burden to carry the weight of the nation off themselves and disproportionately impose it on others. A free, enterprising economy should never reward people who are seeking to do so. We should, of course, reward ingenuity and disruption, but we should not reward not obfuscation. Electronic sales suppression tools serve no useful purpose. Their manufacture and sale should attract penalties. By extending the taxable payments reporting system to the high-risk courier and cleaning industries, the efficiency of taxes, such as GST, can ultimately be strengthened.

Ultimately, this bill depends on this fundamental principle: we are creating a robust tax system designed for the 21st century, one that will seek to ensure everybody contributes their fair and just share. We must make sure that those people who operate outside of the law are not able to do so and neither have the power of complication nor the technology to do so. That is so that we, as all Australians, can look each other in the eye and say that we are doing our fair share.

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