Kate Thwaites (Jagajaga, Australian Labor Party) Share this | Hansard source

This bill, the Treasury Laws Amendment (2021 Measures No. 2) Bill 2021, addresses some very important areas, particularly Australia's charitable sector. I very much share the concerns raised by the member for Fenner and others about the way the Morrison government are essentially waging a war on this important part of our social fabric. And they are doing this at a time when Australian charities are under huge pressure and have never been needed so much. We are in unprecedented times. We have called on our charities to support us through the bushfire crisis, and now through the COVID pandemic. They are working harder than ever to provide support to Australians and to people in my community, here in Jagajaga, who are struggling at this time.

The charity and not-for-profit sector in Australia makes up eight per cent of our economy, 10 per cent of the workforce and has three million volunteers. We know that during the pandemic charities have had to deal with a dramatic drop in both their volunteer numbers and in their ability to fundraise, and yet these falls come at a time when there is an increase in demand for their services from people who have fallen through the cracks of government support, which we know has been inadequate in so many areas. But despite the challenges that charities are facing through this period, this government is providing little support to the sector and no new initiatives to help them fundraise or to help them recruit and engage new volunteers. On top of that, the Morrison government is proposing to make life even more difficult for the sector by essentially waging a war on charities. We know that charities and not-for-profits need more support from the federal government, not less; they need recognition of what they do to hold the social fabric together, not continued attacks from this government.

Since the coalition government has been in office, major charities in Australia have written three open letters to the Prime Minister complaining about ongoing attacks on the sector. Think about that; three open letters. What a war that this government is waging that this sector has felt it has to operate in that way. We know that the Morrison government has ignored Australian charities' requests to update fundraising laws, which has been a top ask from this sector for many years. Reforming those laws was a bipartisan recommendation of a 2019 Senate committee, which set the government a two-year deadline for doing so, and that time has now passed. After taking two years, the government provided a one-page response and has rejected 11 of the 30 recommendations. So no support for charities to make it easier to fundraise at this particular time

And now we see the Morrison government ramping up its war on charities, to attack advocacy work in the sector. The latest proposal we see from the Morrison government would allow the charities commissioner to deregister a charity merely because he anticipates that it might commit a summary offence. What an overreach that is! We've heard from the member for Fenner of some of the concerns about the decision the Morrison government made to appoint this particular charity commissioner. So not only are there concerns about whether the charity commissioner is someone himself who consults with and supports charities he has now been gifted with these unprecedented powers to deregister a charity because he anticipates it will commit a summary offence.

Things we might be talking about in this space are peaceful protest, blocking a footpath, unlawful entry, malicious damage or vandalism. Again, the member for Fenner raised some of the concerns of the sector about places where this might occur. The Catholic Church, for instance, has talked about its involvement in peaceful events, such as a Palm Sunday protest, which may end up with Catholic charities which talk about such events falling foul of these types of laws. These types of actions would lead to the government taking enforcement action that would include deregistering a charity—absolutely outrageous!

From a party that pretends to espouse the right to freedom of speech, it's clear that it's only freedom of the speech that this government agrees with that it will stand up and protect rights on. When it doesn't agree with the type of speech or the type of advocacy that our charity sector wants to do, they want to shut down that right. They want to shut down the right to protest peacefully because that might make you an activist organisation.

So it's not surprising that Australia's major charities have been very quick to condemn this proposal from the Morrison government. Alice Drury from the Human Rights Law Centre said:

These rules would silence charities at a time when their advocacy is more crucial than ever, as charities support Australian communities through unprecedented crises like catastrophic bushfires and the pandemic. These proposed laws are a case of extreme overreach, and have no place in a democracy.

Marc Purcell from the Australian Council for International Aid Development said that he was:

… really alarmed that there were moves to criminalise the work of charities. … At a time when we’ve got military juntas shutting down civil society in Myanmar, Thailand and China… Australia needs to be supporting diverse opinions, the right of free speech, citizens’ right to protest and certainly not muzzling charitable organisations.

Tim Costello, the Community Council for Australia chair said:

When I first read the proposed changes to governance standards I honestly started thinking about Stalinist Russia and other countries where judgements about which groups can or cannot not operate freely are taken solely to protect the powerful.

I think Australia is better than this, and I struggle to understand any rationale for extending this kind of discretion to a charities regulator.

These are really serious comments from the heads of some of our major charities and charitable groups in Australia—groups that we rely on to do work that's essential in communities across our country.

We know that possible unlawful behaviour carried out by a minority of groups does not amount to a significant issue. This was in fact confirmed by the ACNC commissioner himself. Gary Johns said in a recent Senate estimates that the data did not indicate this was a problem. So there is no evidence of a need for these regulations. Why is the government targeting the entire sector and imposing more unnecessary and alarming red tape on them?

We don't want to see Australian charities silenced, and I urge the Senate to disallow these particular regulations, because they are something that we should stand up against in a democracy. Public advocacy should always play a significant role in our democracy. Asking charities not to be involved in advocacy is asking them to be silent on government failures. Asking environment groups not to put forward suggestions around how we need to tackle climate change is asking them to ignore the biggest part of the work that they do.

It has never been clearer that it's urgent we act on climate change. The IPCC report this week is a message to all of us that this is the time that we must take serious action to tackle climate change before it is too late. And yet it's the message the Morrison government continues to refuse to hear, with no commitment to net zero by 2050, no investment to get us the clean jobs of the future. It's a dangerous position, jeopardising all of our futures. And there is no reason why charities and advocacy groups should not be able to put that position forward and retain a charitable status. Asking charities who work with people in poverty not to advocate for a wider safety net at this time of pandemic and crisis across our country is asking them to ignore the systemic problems they come across. It's ridiculous to ask charities just to hand out a food parcel to someone but not talk to an MP in the government about the broader issues about why that person needs a food parcel. Yet that's essentially what these regulations will suggest to do, so it is really important that they are disallowed.

Schedule 1 of this bill relates to deductible gift recipient amendments, and it does seek to amend the Income Tax Assessment Act to require non-government entities seeking endorsement as a deductable gift recipient to be a charity registered with the ACNC, or to be operated by a registered charity. These changes are part of the reform process the government committed to in the 2017-18 Mid-Year Economic and Fiscal Outlook. These changes are welcomed by the sector, for streamlining regulatory practice and improving oversight. It is a shame that the government is making these reforms that are welcomed by the sector at the same time as it's trying to shut down their ability to advocate on behalf of the people that they represent.

The second part of this bill deals with offshore banking. Global reform of the tax system is needed, but right now Australia is missing in action. In order to be taken seriously on the international reform process of tax, we must improve the fairness of Australia's multinational taxation system. We need to close down the debt deduction loopholes and crack down on tax havens. We need to get multinational tax right. At the moment, there are too many multinational firms that are routing their profits through tax havens. For the past eight years, this government has been too slow to act to close these loopholes. We know when Labor was in government we addressed some of these tax breaks, in 2011-13, reining in banks conducting structured finance transactions known as asymmetric swaps through offshore vehicles. However, Labor's crackdown was criticised by the finance sector, and in 2014 the then Abbott government made changes to attract mobile financial service businesses. After the OECD Forum on Harmful Tax Practices in 2018, Australia's OBU regime was deemed to be a harmful preferential tax regime on the grounds that it provides a concessional tax rate and is ring fenced to exclude domestic transactions from its scope.

We welcome the government's decision to remove the preferential tax treatment and to close the regime to new entrants, and the work that this bill will do to amend the tax law to remove the effective concessional tax treatment for offshore banking units in respect of offshore banking activities. From the 2023-24 income year, the taxable income of an offshore banking unit on its offshore banking activities will instead be subject to the relevant corporate tax rate. The bill will also remove the withholding tax exemption for OBUs for interest paid on or after 1 January 2024 and will amend the tax law to remove the ability of the minister to issue determinations or declarations that a person or an entity is an offshore banking unit.

These changes are welcome, but this government has form. They like to talk a big game on multinational tax, but in reality this government allows practices that undermine Australian employees and government service provision. Tax evasion and avoidance by multinational companies threatens Australia's tax base. When tax loopholes are exploited by multinational companies, Australians ultimately have to pay higher taxes or suffer cuts to vital services. Now is not the time for us to be allowing or promoting tax loopholes. Now is the time for us to be making sure that multinational companies are paying their fair share. In spite of the government's posturing on closing down tax loopholes, tax office data in Australia shows that around one in four large companies pay no tax in Australia. The previous Labor government began the task of tightening these loopholes. In opposition, the coalition voted against Labor's measures to reduce multinational tax avoidance, and in government they have failed to take serious action on this very serious problem.

This government likes to talk a big game on multinational tax avoidance but, as with so many areas with this government, it's all talk and no action, all talk and nothing that follows through and actually does the work of a government to look out for all the people in our community, to crack down on those people who are unfairly taking advantage of others. We must curtail the use of tax havens and tax avoidance schemes by multinational corporations. The Morrison government is actually letting down all of us if it doesn't do this work.

I know that sometimes things such as multinational tax havens can sound like they're removed from the lives of everyday Australians, removed from the lives of people in my community who at the moment are experiencing another lockdown, are stressed about their jobs and are trying to deal with remote learning and all the pressures that are immediate there, but the reality is: allowing these types of tax havens and tax avoidance to go ahead harms all of those people. It means that money that government should have to provide extra services to support people through this crisis is not there.

This government is in fact cracking down on recipients of welfare. It's cracking down on people who may have been overpaid by Centrelink and asking for that money back, with threatening letters. It is a government, though, that can't crack down on multinational tax avoidance, that can't crack down on corporations who've been overpaid JobKeeper. This government always chooses to target the vulnerable. This government always chooses to fight the people who want to make this a better community. It doesn't choose to tackle the big problems. It is incapable of doing the work we need to create a more harmonious, fairer society for all of us, one where Australians are supported and where we are not waging a war on charities and supporting multinational tax havens. This is a very important bill and it is important that this government gets on with tackling these issues.

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