Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

I can assure the member for Holt that the coalition will be supporting this bill, but I note that the whole process conducted by the responsible minister has been a complete and utter shambles. That's not unusual for those opposite, since they've been in government. We've seen schedules pulled just hours before introduction, to the point where the explanatory memorandum refers to schedules of the bill that no longer exist. We know that Labor wanted this bill to be more onerous and to tie business down in more red tape, but that would have not improved, one iota, the level of revenue raised in this bill.

I think it's worth reminding the House and those new members opposite that this is just the latest tranche in a number of bills to improve the effectiveness and transparency of our tax system, particularly in relation to multinationals and ensuring they pay their fair share of tax. Many of those first tranches of legislation were introduced by a coalition government. The coalition government has a solid and sound track record in ensuring multinationals paid their fair share of tax, over the last nine years that we were in government, and minimising the risk of multinationals avoiding paying their fair share of tax. Our system is undermined when people and organisations avoid their tax obligations. That's why we worked so hard when we were in government to ensure they did pay their fair share.

We welcome the continuation of the OECD's two-pillar solution to multinational tax avoidance. This was started by the coalition government, and it's pleasing to see that the current government is continuing that process to ensure the integrity of our tax system. That is crucial for all of us, because that is what assists in funding the services that Australians rely on each and every day.

This legislation highlights an important point, and the shadow Treasurer's amendment to this bill reflects on that, that Labor have broken their promise on tax. Labor promised only to increase taxes on multinationals before the last election, but we've seen them break that promise. Labor have raised taxes on superannuation, capturing one in 10 Australians, over time, and young Australians earning average wages today, according to Treasury modelling.

Labor are taxing unrealised capital gains. Let's be clear. That is a wealth tax—unprecedented around the world—and an assault on family owned businesses and self-managed super funds. Labor are increasing taxes on franking credits, banking half a billion dollars in taxes from Australian companies, Australian retirees, Australian super funds and Australian charities. Labor have ended a range of small-business tax concessions, decimating the instant asset write-off, all but burying the technology investment boost and ending loss carry-back measures. This is despite independent economist Chris Richardson predicting Labor would breach the coalition's tax-to-GDP cap during their first year in office. Higher taxes will not assist with the cost-of-living crisis and they will certainly not assist with small to medium business and the productivity crisis that we are seeing with this current government.

Labor has broken promises on tax, and it proves they can't manage the economy and can't be trusted. As we have said all along as a coalition, higher taxes are in Labor's DNA.

But what's in this bill? Schedule 1 introduces new rules on the disclosure of information about subsidiaries. For the financial years commencing on or after 1 July 2023, Australian public companies, listed and unlisted, must disclose information about their subsidiaries in their annual financial reports.

Schedule 2 to the bill aims to strengthen the thin capitalisation rules in division 820 of the Income Tax Assessment Act 1997. The amendments seek to address risks to the domestic tax base arising from excessive use of debt deductions, thereby transferring wealth elsewhere, to lower-tax environments, which amounts to base erosion or profit-shifting arrangements. These amendments introduce new thin capitalisation earnings based tests for certain classes of entities, replacing the existing asset based rules for those entities. The debt deductions under the safe harbour test will change from up to 60 per cent of assets to 30 per cent of profits.

These amendments also establish a new arms-length debt test in the form of a third-party debt test. The schedule also introduces a new subdivision, 820-EAA, for debt deduction creation rules. These rules disallow deductions to the extent that they are incurred in relation to debt creation schemes. The new test excludes related-party debt, supporting property and infrastructure investment.

As I said in my earlier remarks, these just build on the coalition's track record of nine years in government. In 2014, as the G20 host, Australia played a leading role in the original OECD base erosion and profit-shifting project, which was initiated in 2013 and delivered in 2015. Under the coalition, Australia was an early and vigilant adopter of the OECD/G20 BEPS recommendations. These established a multilateral approach to prevent tax avoidance and increase tax transparency to tax administrators.

The coalition government's measures included introducing the diverted profits tax, which limits a company's ability to shift profits out of Australia; introducing the multinational tax avoidance law, which ensures companies do not avoid a taxable presence in Australia; strengthening the thin capitalisation rules; strengthening transfer pricing rules; doubling the penalties for tax avoidance; and establishing the ATO Tax Avoidance Taskforce. The task force, created in 2016, enforces existing laws and supports the government's new tax avoidance measures. It targets multinational enterprises, large public companies and private groups, and wealthy individuals.

From 1 July 2016 to 30 November 2021, through all of these measures the ATO raised more than $24 billion in tax liabilities against large public companies, multinational corporations and privately owned and wealthy groups. This ultimately generated tax collections of some $17.3 billion. In the 2019-20 budget, the government provided additional funding to the task force to expand its activities, and this was expected to raise additional tax liabilities of $4.6 billion over the forward estimates. I think this track record speaks volumes for the work of the coalition government and provides a very sound foundation for the current government to continue building on.

But, in closing, let me speak more to the amendment. We've seen that the government has continued to break its promises in dealing with the cost-of-living crisis. The government knows only one way when they run out of money, and that's to come after yours. Changes to these multinational tax arrangements in this bill do not change that, whether it is franking credits or superannuation, you can't trust the government on tax. The Prime Minister and the Treasurer went to the election promising Australians that they wouldn't touch franking credits, yet in a year they've added two tax grabs on Australian shareholders.

Changes to these multinational tax arrangements in this bill do not change the fact that they've broken their promises in other areas of tax. I spoke earlier this week on the issue of productivity. We've seen a 4.6 per cent fall in productivity in this country under those opposite's leadership. Yet we see nothing from them about how they're going to turn that around and improve the productive opportunities in this country. Through their broken promises on tax or the collapsing productivity under this government, we are still seeing CPI at six per cent, and core inflation a little bit under that at 4.9, amongst the highest in the world.

The CPI data tells us what we know Australians are feeling each and every day: prices are not coming down. There's the broken promise on reducing your electricity bills by $275. I know from talking to many people in my electorate that their electricity bills are only going on way, and that's up. They're not going down, and there's no sign of that happening anytime soon. Whether it's grocery prices, whether it's petrol prices, whether it's a range of other costs across the economy, particularly mortgages for many people in my electorate, prices have only gone up. This government promised at the last election that the cost of mortgages would go down, the cost of electricity would go down and the cost of living would go down. Well, it has only gone one way since the election, and that is up. They have no answers.

This is a good piece of legislation in terms of ensuring multinational companies pay their fair share of tax, but it does not gloss over and does not hide the failure of this government to deliver on their other promises. There is no sign of that happening whatsoever. So I commend this bill to the House. As I said in my opening remarks, we will not be opposing this bill. But, once again, I just want to make the point that all we have seen from this government is higher cost of living, higher taxes and no sign of anything different from them whatsoever.

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