Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Hansard source

I move the amendment circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"the House declines to give the bill a second reading, and notes:

(1) Australia is in an entrenched GDP per capita recession and almost 17,000 businesses have gone insolvent since the government came to power;

(2) Treasury analysis confirms this Bill imposes $2.3 billion in compliance costs in its first year of operation, with no productivity benefit;

(3) ASIC and the Australian Small and Family Business Enterprise Ombudsman have confirmed to Senate Estimates that this compliance cost will be passed on to small businesses;

(4) the United States, Canada, Japan, and most of Australia's trading partners do not require the reporting of scope 3 emissions. The Productivity Commission has confirmed to Senate estimates that this sort of misalignment in regulation will harm investment and make Australian business less competitive; and

(5) while the Coalition is not opposed to reasonable disclosure regimes, this legislation is a red tape bomb that will hurt Australian farmers, small businesses, and ultimately raise prices."

This is not about being pro- or anti-climate. It's not about being pro-emissions reduction or otherwise. This bill, the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, unhappily, is about being pro- or anti-small business. This is an anti-small-business bill. The bill puts an unacceptable compliance burden on the Australian economy at a time when the government is claiming it will reduce their compliance burden. It puts compliance obligations on Australian companies that are completely out of line with our international peers—with the US, with the UK and with Canada. Sadly, the bill creates the risk that small businesses will only be able to contract with, bank with or sell to larger businesses. It accelerates the trend of debanking we are seeing amongst our farmers, miners and resources industry more generally.

If we are to get this economy back on track we have to get back to basics, and right at the heart of that is getting red tape, getting regulation, getting compliance burdens—which is what this will be, of $3.2 billion, and I think that's a conservative estimate—out of the way. We have to allow small-business people to get on and do what they do—invest, create jobs, take risks and create opportunities for themselves and all their stakeholders like their customers, their suppliers and their employees. You can't do that when you're wrapped in red and green tape, which is exactly what this is about.

Schedules 1, 2 and 3 of the bill implement recommendations of the financial market infrastructure regulatory reforms to strengthen the financial market infrastructure. We support these changes but we have grave concerns about the proposal to remove parliamentary scrutiny of changes to voting power on the ASX. Currently, changes in voting power to the ASX are limited to 15 per cent and any change requires regulations to be altered and subject to disallowance. This amendment instead confers this power to ASIC, with ministerial approval—so the power of disallowance is removed, and we have concerns about that.

Turning to the mandatory climate disclosures, schedule 4 of the bill generally requires that entities that lodge financial reports under chapter 2M of the Corporations Act meet certain minimum size thresholds or have emissions reporting obligations under the NGER Scheme to make disclosures relating to climate in accordance with relevant sustainability standards made by the AASB. Schedule 4 implements a climate reporting regime that is stricter, more onerous and more widely applied than that of any of our trading partners. ASIC chair Joe Longo has described the changes as the biggest change to corporate reporting in a decade. At maturity, the scheme will require all companies with turnovers above $50 million to disclose audited and assured scope 3 disclosure statements. ASIC will have full enforcement powers from commencement, but there will be a safe harbour from private litigation for just three years.

I made the point that this is about disclosure of emissions—not just scope 1 and scope 2, which is what you typically see around the world, but scope 3. What are scope 3 emissions? They are the emissions of those companies that are reporting on their customers. It's a bank having to disclose the emissions of its customers. It's a fertiliser supplier having to disclose the emissions of its customers. It's a merchandise provider or a livestock agent having to disclose the emissions of its customers. Every farmer in Australia should be deeply concerned about where this is going, every tradie in Australia should be deeply concerned about where this is going and every small manufacturer should be deeply concerned about where this is going, because their banks and their other service providers and suppliers are going to have an obligation to start reporting their customers' emission.

No doubt every activist in the country is absolutely salivating at the opportunity to say to that bank, 'I tell you what? We're going to do everything we can do to put you out of business unless you tell your customers how to run their businesses.' They will be telling beef producers how to run their businesses. They will be telling wool and lamb producers how to run their businesses. They will be telling tradies and builders how to run their businesses. They will be telling small manufacturers how to run their businesses. This is what the government is doing here: they're going to outsource activism to the banks and to other major service providers. When I say 'major', it's only companies over $50 million. The red tape compliance bomb here is unimaginable, and I am deeply concerned about where this is going.

For a Labor Party that thinks the only good business is a business that's fully unionised, I guess it's completely understandable. It's completely understandable that small business is your enemy when you are in the Labor Party. Small business can't be easily controlled by activist union officials, so what do you do? You wrap it in red tape until you throttle it. You asphyxiate it, and that is exactly what this bill is doing. There is so much that Labor has not explained in what they are planning here. How are they going to prevent activists saying to the banks, 'Stop lending to a farmer who doesn't do as they are told'? That is exactly where this is going to end up.

What is most extraordinary about this is that even the US, with a government that's not on our side of the political aisle, is not going down this path. The UK is not going down this path. New Zealand is not going down this path. The inclusion of scope 3 emissions is a step beyond what is reasonable for small businesses. They will pay a very, very high price.

How do you deal with a cafe owner selling coffee in the lobby of a big company? How is that going to work? They're going to have to disclose their emissions to that big company. Quite seriously, the way this is being done is just beyond laughable. A building supplier—a small tradie—providing office fit-outs to a big company is going to have to work out the emissions from his or her ute and report that to the company they're doing the fit-out for. If you're a manufacturer buying ingredients or components from a big company, or selling them—either way, actually—the law will eventually get you.

This is a kind of outsourcing of activism, which this government seems to love. We know that Labor are funding environmental activists, like the EDO, to ensure that they get what they really want. They get what they really want: the shutting down of some of the most important projects for the future of this country. Labor don't like these industries, so they will asphyxiate them.

ASIC made clear in its evidence to the Senate Economics Legislation Committee that these compliance costs will be passed on to small businesses. They've made that clear; ASIC haven't sought to hide that. They have confirmed that these concerns are so extensive they have been raised with ASIC by the Australian Small Business and Family Enterprise Ombudsman. The Securities and Exchange Commission in the United States has noted exactly the same concerns, and it's why the US are not proceeding with scope 3 emissions in their regulations.

So Labor need to see sense here, and we've attempted with this amendment to lay out a sensible pathway forward on this—a pathway that respects the role of small businesses in our economy, that recognises they are actually the engine rooms of so many of our electorates. I know members here, when I look around, would say small businesses and farmers are the backbone. I suspect that's true of those on the other side of the chamber. I know it's true of those on the other side of the chamber. But they have never been inside the Labor tent, so they're not going to get looked after; in fact, they're going to be hit hard by this. At a time when we've seen almost 16,000 businesses go into insolvency since Labor came to power, this is the wrong law. It's the wrong law at the wrong time. We are in the midst of a cost-of-living and cost-of-doing-business crisis, and it's absolutely the last thing that is needed.

Independent research shows that red tape costs the economy more than $176 billion a year, and this is going to add very significantly to those costs. We heard through Senate estimates this week, from Treasury and agency officials, who will bear the brunt of this cost. It isn't big businesses. They'll pass it on. They're not the ones who are going to bear the brunt of it. They have big departments doing this, they hire consultants—they do all of that so they can manage it. Those costs are relatively small in the scheme of the budgets of big businesses, but small businesses, who no doubt are going to have to report all of this to their suppliers and service providers, are not in a position to do it. It's not the multinational companies that are going to bear the brunt of this; it's small businesses.

Treasury analysis confirms that this bill imposes $2.3 billion in compliance costs in its first year of operation. Of course, there's no productivity benefit whatsoever in it, but productivity is not something that those opposite seem to care about. That's why productivity has gone backwards savagely under Labor. It has flatlined, according to the latest national accounts. Someone among those opposite is going to have to explain to me how you get inflation down and the economy growing at the same time as labour productivity is in freefall. The truth of the matter is that it is just not possible. It is just not possible to achieve that, and when we wrap small businesses in more red tape, as this legislation is doing, we just make the situation worse.

There is a better way than all of this. There is a better way to get the country back on track, and it is getting back to basics. It's recognising that you've got to get the productive side of your economy right, and the heart of that, as I said earlier, is small businesses and farmers, which are the engine room of our electorates, the engine room of our economies, the engine room of our communities. Every local member knows—we regional members in particular see it—that it's a few terrific, outstanding businesses, led by great businesspeople, in our local areas—

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