Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Hansard source

The member for Moreton was right when he said that the Treasury Laws Amendment (Refining and Improving Our Tax System) Bill 2023 would have been part of a red tape day in a previous iteration of this place. Indeed, red tape day did get through a lot of good things. I appreciate that at the time there might have been some things that seemed a little strange to those opposite, but indeed we all want to reduce red tape and we all want to make sure that businesses can flow and function as smoothly as possible.

Having run a small business from the start for a number of years prior to entering parliament, I know that for small business owners it's so confronting, confusing and annoying when they are faced with so much red tape and bureaucracy. They just want to get on and produce things—goods and services. To be overburdened with red tape is something that they don't need. To have that pressure lifted from their shoulders is most desirable.

Whilst the bill has measures the coalition can support, it does not make up for Labor's failure in other areas which are aligned with this portfolio area. Labor stands condemned for its broken promises on franking credits, on superannuation taxes and on taxing unrealised capital gains. I'll speak about more of that in a short while. This bill reintroduces measures progressed by the coalition. Quite frankly, these should have been introduced earlier. I appreciate that Labor has been in government for 10 months, but these things should have been implemented sooner by this government.

The bill contains changes across five schedules. I'll just go through them. Schedule 1 amends the International Tax Agreements Act 1953 to give force of law to the tax treaty signed by Australia and Iceland on 12 October last year. This is important. Schedule 1 of the bill amends the agreements act to give force of law to the convention that we signed with Iceland. It's part of Australia's domestic procedures for implementing its tax treaties.

Schedule 2 makes amendments to exempt wholly owned Australian incorporated subsidiaries of the Future Fund Board of Guardians from corporate income taxation. This fully implements the 'Future Fund—extending the income tax exemption to wholly owned Australian incorporated subsidiaries' measure announced in the 2022-23 March budget. On 14 December last year it was announced that the government would proceed with the measure. It amends the ITAA 1997 to extend the income tax treatment applying to the Future Fund Board to its 100 per cent subsidiaries incorporated in Australia. That means that the amendments exempt these subsidiaries from income tax and include them as entities eligible for the refund of a tax offset relating to a franked distribution.

Schedule 3 partially implements the deductible gift recipient reform, and of course we all know how important DGR status is right across the board in the economy. It strengthens governance and integrity. It's a complexity-reducing measure from the 2017-18 MYEFO. This is vital—and schedule 3 mentions overseas aid DGRs—because I know the important part that overseas agencies play in getting humanitarian aid where it is most needed. If I could just single out the Save the Children fund, what an organisation that is. I travelled with Sarah Carter and Mat Tinkler to Kenya. I know the important work that they do that sometimes government agencies cannot do, and the places that they can go, the doors that they can open, and if we can in any way, shape or form assist them further—because they get to the nub of the problem; they get to the coalface, if you will, of the issue; and they are able to provide aid through ways and means and in forms that governments sometimes cannot.

Schedule 4 allows small and medium businesses that engage in the fuel or alcohol excise system or that import excise-equivalent goods to apply for permission to lodge and pay their duty quarterly, boosting cash flow and reducing red tape. Again, if we can make it easier and more efficient for businesses and for industry by reducing red tape, then that has to be seen as a good thing. Schedule 4 to the bill, in part, puts across the Commonwealth's deregulation measure in the 2022-23 budget of the former government—and a good government we were. We worked hard for nine years to reduce red tape, because, if ever there were parties for small business in this place, it is the Liberal and National parties. They are the parties of business, and we understand—

I hear the member for Flynn say 'correct'. He knows what it's like to run a small business. He knows what it's like to take that risk to employ people, to open a business and to not know where the next contract is coming from, where the next amount of money is going to come from, to keep that small business running. But he knows, like I know, that you pay your workers first. You put your workers ahead of yourself. So many businesspeople throughout Australia pay their workers, put themselves out and actually take home less money when times get tough than do the workers. But they keep the doors open for business. I give a shout-out to all of those small businesses across Australia for keeping the doors open for business. Yes, they were helped through JobKeeper and other measures, but they did a power of good, a power of work, during COVID-19, the global pandemic, and they helped us in part to be ranked No. 2 on the John Hopkins research institute index for the way we handled and dealt with the global pandemic.

Schedule 5 introduces a target exemption to alcohol excise for retail and hospitality venues which repackage beer from bulk quantities into smaller containers for immediate retail sale. I know this is going to be important to Stephen Ferguson and other industry advocates. I know that making sure that we get these sorts of measures through is important for that vital sector of the economy.

On the one hand, the coalition supports this bill, which implements a number of measures of the former coalition government to streamline our tax system, reduces tax—and we're all for that—and decreases red tape on small businesses and charities, which we're also very much in favour of. However, whilst they are worthy initiatives, we do not see enough from this government on reducing tax and easing the burden on small business. Sadly, this bill is just another stark reminder that, whether it is working with franking credits or superannuation, you cannot trust Labor when it comes to tax. Labor has never seen a tax it wouldn't want to impose or increase, and the public is aware of that.

Before the election, the Prime Minister and the Treasurer both ruled out changes to franking credits. That's what they said then, and unfortunately, what they do now is the complete opposite. They have been in government less than a year in government, and there are more broken promises. Don't believe what Labor says it's going to do; just observe and watch what Labor does. All of the big fixes that Labor talked about and all of the measures that Labor said that were going to implement to improve Australia are now on their head. Shore to shore on mainland Australia, it is red. It is Labor, so it is Labor who are required to fix all of the problems and issues that they say are wrong with the country. Fixing things doesn't mean saying, 'Oh, yes, but we inherited this problem or that problem.' Labor inherited a very good national economy. The books that Labor inherited for economic growth, development and a low unemployment rate were very, very strong and very, very solid. Don't shake your head, member for Hawke. It is true. Our economy, despite the global pandemic, was going very nicely and very strongly under the coalition government. It's always hard to win a fourth term. We found that out. New South Wales found that out on Saturday, and congratulations and good luck to Labor, because they now have the great privilege and honour of leading this nation at state and territory level right across mainland Australia and, indeed, here in Canberra.

Labor haven't done themselves great favour or credit with Australian people with the changes that they've already flagged on franking credits. I can well remember the 2019 election campaign. I was in the Northern Rivers area, and I had pensioners walking across the road to talk to me. I was campaigning at the time in the Tweed and the Northern Rivers with some very good coalition and Nationals candidates, and people were coming across the road to talk to me about their concerns about the franking credits. That was one of the decisive factors in that particular election because pensioners were worried about what Labor was going to do. I know that the member for Maribyrnong went to the election with a very large agenda, and at least he was upfront and honest enough to put that agenda out there. The Australian public didn't accept it. This time, Labor went to the election and said that they weren't going to change franking credits and, in fact, they have. So I give the member for Maribyrnong some credit in that regard.

Many small businesses will be captured by Labor's super changes and unrealised capital gains taxes. When I say 'small businesses' here, I'm particularly referring to farmers. How can Labor and the member for Whitlam, who is the Assistant Treasurer, possibly think that a farmer should receive a bill because his or her property has increased in price due to economic fluctuations? If it increases in price, they're going to get a bill. It is, quite frankly, beyond me. I have two brothers-in-law who are on farms. My father owned a farm. The price of land goes up and down according to seasons. It goes up and down according to the economic fluctuations of the time. At the moment, the price of land is very high. It's almost unrealistically high. Why should a farmer go to his or her mailbox, open it up and then get a surprising adjustment of their capital gains, their superannuation, their landholdings, that they're now going to have to pay somehow?

Whilst they sit on a huge asset, the price of that asset can go up or down depending on the seasons. If the price of land is high and they're copping a bill, yet the rain isn't falling out of the sky, it makes it so difficult for farmers. Already they can't produce the food and fibre they otherwise would, and yet here, through yet another Labor broken promise, they're going to cop it in the neck for something that they can't control or determine. All they're doing is trying their best, for and on behalf of Australians, for and on behalf of our exports, and they're copping a whack from Labor because Labor's keen on taxing unrealised capital gains. It just doesn't make sense.

But don't just take my word for it, and don't just take the farmers' word for it; ask any accountant. They are scratching their heads and wondering, too, how this is going to work. The member for Whitlam couldn't explain it in question time, day after day—nor would he be able to; nor should he be able to. The member for Rankin, the Treasurer, should explain why this change has to take place and explain why this broken promise has occurred.

Of course, many charities will lose out through Labor's broken promise on franking credits. I mentioned them before. Charities do wonderful things for our people, and not only our people here in Australia but people in so many countries overseas who are doing it tough at the moment. The war in Ukraine is not helping. We support this bill. We just don't support Labor's broken promises.

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