Jerome Laxale (Bennelong, Australian Labor Party) Share this | Hansard source

I stand to express my support for the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023. This bill is a crucial piece of legislation that will help ensure that our economy remains strong and resilient in the face of economic challenges that we may face in the future. This bill will create several changes to the Australian taxation system to improve its integrity, sustainability and fairness.

I am one of those MPs who just love it when the Assistant Treasurer brings these TLABs to parliament. I look forward to them every sitting session and I'm happy that this is the first time I've had the opportunity to speak on one. I like TLABs. I've said it. There you go! These bills, by and large, contain sensible measures to help our economy and ensure the very best practice of our complex taxation system and are sometimes even vehicles for great reform.

Last year we saw a TLAB bring forward changes to the tax system which will help small businesses right across the country and, of course, in Bennelong. The Small Business Technology Investment Boost was in a bill just like this one. That program is a great incentive for small businesses to invest in technology capability and allows businesses with a turnover of less than $50 million to deduct an additional 20 per cent of the expenditure incurred for the purposes of business digital operations or digitising their operations on business expenses and depreciating assets such as portable payment devices, cybersecurity systems or subscriptions to cloud based services. As we move out of COVID and as we are seeing further digitisation of our economy, this boost, embedded in a past TLAB, will help small businesses.

The same TLAB also brought forward the Small Business Skills and Training Boost. The former government left us in a skills crisis. TAFE was underfunded and undervalued, and our skilled migration program was in tatters. This government recognised those failures of the former government, and the Small Business Skills and Training Boost helps address those failures. Businesses with an aggregated annual turnover of less than $50 million will be able to deduct an additional 20 per cent of expenditure that is incurred for the provision of eligible external training courses to their employees by registered training providers.

Now to this TLAB, which is another incredibly important one to support, this time for some very important environmental reasons. Schedule 2 of this bill will improve the sustainability of investments in Australia and, importantly, will provide standards on how investors will now need to consider the long-term impact of their investments on the environment. Importantly, it will create standards which will shine a light on greenwashing within our economy. Greenwashing is bad for our planet, bad for our society and bad for our economy. Greenwashing is a term used to describe the practice of making false or misleading claims about the environmental benefits of a product, service or policy. As we know, right now Australian companies are greenwashing.

A sweep of 247 businesses and brands across various sectors recently by the Australian Competition and Consumer Commission, released only a few days ago, shows that 57 per cent of companies have promoted concerning claims about their environmental credentials. The ACCC's analysis focused on identifying the industries or sectors that are most commonly using environmental and sustainability claims and assessing whether these claims were misleading to consumers. It looked at these environmental claims through the eyes of ordinary consumers and whether they would understand and accept what the claim means. Most commonly the analysis found that companies right now are using vague and unclear environmental claims.

We've all experienced standing in the aisle of our local supermarket or shopping online and seeing terms like 'green', 'kind to the planet', 'eco-friendly', 'responsible' or 'sustainable' jumping out at us. But how do we know what these claims actually mean or whether they're backed up with genuine environmental action or qualifications? Then we have all the certification claims. We've all looked at the little logos on products that give us a claim that this product or that company are certified. It gives you a sense of trust in a product, when you see a little logo claiming something environmental—that somebody has looked at this product and decided it meets the environmental and sustainability requirements to be provided with certification. But we know that's not always the case.

The ACCC sweep found several instances where the use of certification trademarks, also known as CTMs, could, potentially, mislead consumers. Several companies did not clearly describe the nature of the certification scheme or whether it applied to the entire business, the product range or only certain products. There are even companies creating certification schemes for their own products. How open to misuse is that? They get to put their own tick or logo on their own product without meeting any higher regulatory requirements. In that case, certification just becomes meaningless. Those companies undermine the companies that are making the right decisions and doing the right things and correctly certifying their products, particularly on environmental grounds.

These claims and qualifications are very important to consumers, and there is rarely information provided to back up these claims. Where a company is using vague environmental claims, not providing important information about their claims or, at worst, making misleading or false comparisons between products or exaggerating environmental benefits, it's known as greenwashing. In a time when there is community and consumer support for a transition to a net zero economy and for solving problems relating to climate change, emission reductions and product durability and recyclability, all these themes are at an all-time high for consumers. We need to make sure that, when a company makes claims, those claims are robust and that they stack up. We need to make sure that the bad eggs are not using positive consumer sentiment to make false claims and taking advantage of what is now an open and relatively unregulated system.

More and more consumers are becoming increasingly interested in purchasing sustainable and environmentally friendly products, and more customers than ever are using sustainability claims to make their decisions. Greenwashing is a major problem because it undermines the efforts of genuine environmentalists and companies that are truly committed to reducing their emissions and protecting our planet. It creates confusion and makes it difficult for consumers to make informed decisions about the products and services they purchase. When businesses make misleading, meaningless or unclear claims of sustainability and environmentalism, it ruins the trust that our communities have. Not only can this lead to a false sense of security and prevent consumers from making sustainable choices; it could ultimately cause consumers to lose trust in both the claims of the product and sustainability claims in general. Greenwashing also undermines the efforts of companies who are genuinely committed to protecting the environment.

We know that there are a lot of companies out there doing the right thing. They are genuinely pursuing more sustainable practices, products and services, and, for some, that incurs a higher cost. When businesses publish false or misleading information, it disadvantages those who are doing the real work and doing the right thing. Greenwashing can also be detrimental to our economy. Companies that engage in greenwashing are not investing in genuine environmental initiatives and are harming the growth of industries that are truly committed to protecting our environment. One way to increase transparency in this sector is to require companies to disclose detailed information about their environmental practices. This will enable consumers to make an informed choice and hold companies accountable for their environmental claims. This TLAB will form an important part of implementing these changes.

Schedule 2 of this bill will improve the sustainability of investments in Australia by introducing much-needed sustainability standards for certain types of investments. The proposed changes would require certain institutional investors, including superannuation funds, to consider the long-term impact of their investments on the environment, social issues and corporate governance. It will introduce sustainability standards to make the regulation of environmental claims easier. It will ensure that there is standardised, internationally aligned reporting by large businesses of climate related plans, risks and opportunities.

The proposed sustainability standards will require institutional investors to consider environmental, social and governance factors when making those decisions. It will ensure that investments are made in a way that promotes sustainable growth and contributes to the long-term welfare of Australians. The proposed changes will also require investors to disclose how they have considered these sustainability factors when making decisions. This would also improve transparency and enable investors to make more informed decisions about where to invest their money.

We also need to strengthen regulations to prevent companies from making false or misleading claims about their environmental practices. This can be done by imposing penalties for greenwashing and requiring companies to provide evidence of those claims. We know that imposing penalties and legislating a requirement for companies to substantiate their environmental claims is what consumers need right now. There are some extraordinary examples around the world of greenwashing that we simply don't want to happen here in Australia.

One example is in the Netherlands, where gas giant Shell has been reprimanded twice for greenwashing. In 2021, a group of young Dutch law students made a complaint that Shell advertisements claiming to be 'CO2 neutral' were misleading. The students argued that Shell's claim did not account for the full scope of the company's emissions and that it relied heavily on carbon offsets, which do not address the underlying emissions. The Dutch regulator agreed with the students and ruled that the advertising campaign was deceptive. They found that Shell's advertising campaign was misleading because it suggested that Shell was reducing its CO2 emissions to zero while in reality the company continued to emit large amounts of greenhouse gases.

There are also some great examples happening overseas where other countries are leading the way. We can look at France's innovative legislation that requires companies to provide more transparency about their carbon offsetting activities. Under their law, companies must now disclose how they plan to reduce their own emissions before resorting to offsetting. Companies must also report their offsetting activities in a clear and detailed manner. French carmaker Renault has recently announced that they are going to spend one billion euros over the next five years to reduce their own emissions before relying upon offsets.

That's best practice, and the laws being proposed in this TLAB are an important first step to provide improved conditions for investors and consumers here in Australia but also to provide certainty to businesses. They will create much-needed and long-overdue standards to ensure that the regulation of environmental claims is easier and more transparent. These laws, put short, will help stop greenwashing.

I would like to acknowledge the recent work of our regulators and in particular of the ACCC and ASIC. They are now stepping up to hold greenwashers to account. In response to their own survey, referenced earlier in this speech, the ACCC will soon produce updated economy-wide guidance material and target guidance for specific sectors, such as cosmetics, personal care, and food and beverages, where greenwashing is most pervasive. They will also look at concerns that have been identified with specific businesses and begin a more targeted assessment of their conduct to determine the appropriate compliance or enforcement approach. This will result in companies being required to amend their claims to ensure that they are not misleading, to pay infringement notices or to face legal proceedings. We know that only a few weeks ago ASIC launched their first-ever legal proceedings alleging greenwashing. This is a good thing, and it must be encouraged.

Greenwashing needs to stop, and this bill is a significant step towards that. The proposed changes in the bill will improve transparency, sustainability and fairness of the Australian taxation system and enhance outcomes for taxpayers and consumers. I commend the minister for his hard work in ensuring our system is equitable and the government for its commitment to this matter.

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