Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That the amendment be agreed to.

This amendment removes schedule 2 from the Tax Laws Amendment (2006 Measures No. 7) Bill 2006. The interest withholding tax measure has been developed in close consultation with industry stakeholders, both before and after introduction. This is consistent with government practice that we have demonstrated time and time again.

Although consultation was undertaken before the measure was introduced into this place, further issues have now been brought to the government’s attention. The government would like to more fully consider these issues before proceeding with the measure. The government considers that the other important measures in this bill should not be further delayed while we consider the issues in relation to a single measure. Therefore the government will remove the measure from the bill, undertake further consultation and re-introduce the measure at a later date.

Chris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The opposition supports this backflip from the minister. This schedule has been removed because the Labor Party referred this matter to a Senate committee. As outlined in my second reading speech, the Labor Party had real concerns that this measure would make it harder for Australian firms to raise finance for major projects overseas. Our concerns have been borne out by the Senate committee. In their submission the Australian Bankers Association said:

The ABA has grave concerns about the content of Schedule 2 of the Bill

…            …            …

For the future, the Bill will unreasonably impede access by borrowers to international debt markets ...

This supports concerns raised by me on behalf of the opposition when this bill was introduced by the minister. An inquiry was resisted by the minister. He came into the chamber and said: ‘The government cannot now agree to the referral of the bill at this late stage. The government does not want to deny business from accessing the benefits and it would not be in the best interests of the ALP to pursue their political agenda.’ But of course what the ALP had to do was step in and protect business from this minister’s incompetence. The ALP had to step in and protect business from this minister’s failure to consult.

We heard the minister again say today that there had been consultation. He again repeated that in the House. This minister has more front than Anthony Horderns. He has the gall to come in here and praise the government’s consultation process. He said in his second reading speech:

The government in fact consulted widely with a number of industry parties and stakeholders before the measure was introduced. The government also appointed an independent consultant.

He went on to say:

... this government is operating its consultative process as well as we ever have.

And he repeated that today. He has more front than Anthony Horderns. He has the gall to come in here and defend his consultation. Let us have a look at some of the submissions to the inquiry. Again, the Australian Bankers Association said:

The ABA notes that a breakdown occurred in the consultation process in relation to the proposed IWT amendments. The ABA lodged submissions with Treasury in June and December 2006, but was not engaged in formal consultation until after the introduction of the Bill on 7 December 2006.

The Asia Pacific Loan Market Association said in its submission:

Unfortunately the manner in which the Bill has been introduced has caused significant uncertainty and concern in finance markets.

Thanks to this minister’s incompetence. The Australian Financial Markets Association said in its submission:

We are unaware of a problem with the current definition of debenture for the purpose of s.128F, but if there is a concern in this area it should have been properly explored through consultation.

Clearly, the minister has misled this House. When he came in here to introduce the bill he arrogantly dismissed Labor’s concerns and said, ‘You don’t understand business; we’ve consulted.’ Who did they consult with? They certainly did not consult with the banks. They certainly did not consult with the finance markets. I would like to know who they actually spoke to, because all four submissions to the Senate inquiry say, ‘We weren’t consulted.’ So the minister has been wandering around consulting with somebody. Maybe he could enlighten the House as to who it was. It certainly was not with the people affected. It certainly was not with the people going out there raising finance for major Australian projects. It certainly was not with the people trying to attract foreign investment into Australia.

They come in here and they arrogantly say, ‘We’re the party that understands business’ when it is the Labor Party that has to step in and protect business from this minister’s incompetence, from this minister’s failure to consult with industry, from this minister’s complete ignorance of the banking industry, from this minister’s complete failure to talk to the financial markets industry about these concerns. He walks in here and says, ‘We’re not going to allow this to go to the Senate; you’re being irresponsible.’ But then the pressure is applied and he backflips once and sends it to the Senate. Then today he backflips and agrees to Labor’s amendments that schedule 2, which I said at the beginning, in the speech on the second reading, should be withdrawn, and he withdraws it. He should have done that on the day instead of grandstanding and now being forced into a backflip.

This raises a very important point. On Monday we saw the Assistant Treasurer backflip on non-forestry managed investment schemes. He said, ‘There’s been wide consultation.’ Again, the problem is that the consultation occurred after the decision. Can I give the Assistant Treasurer a little tip: consultation works best if it happens before the decision. That is how it works best: if it actually happens before the government makes a decision.

Twice in one week we have seen the Assistant Treasurer having to cover up his incompetence by doing a backflip. We welcome the backflip. We welcome the fact that he has at last come in here and accepted Labor’s position. He has finally accepted that the Labor Party were right all along. We stand ready to support a properly well thought out measure which has been consulted upon. We stand ready, as I said in the original speech on the second reading, to support the government if they come up with a proposal that protects government revenue in a sensible way which the industry has been consulted on and which can work. We will have a look at the detail when the Assistant Treasurer eventually brings this back into the House—whenever that may be—and we will support any sensible measures. (Time expired)

Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Link to this | Hansard source

That is an angry little man. That was a demonstration to his union mates, with the beating of his chest, to show that he is up to the task; to show that he is not just another union boss in this place but also able to carry himself well in the parliament. If that makes the shadow Assistant Treasurer feel better, I am happy to have afforded him the opportunity. If he has used the opportunity to express his self-perceived confidence to his union hack mates, that is a demonstration of what the Labor Party are about in 2007.

The Labor Party in 2007 really represent what was wrong with them back in the 1980s. They are nothing more than a party of union bosses. They are dictated to and are managed on a day-to-day basis by the union bosses in this country. They do not stand for the workers in this country. They do not stand for business in this country. They stand for themselves, because they are owned by, used by and paid for by the union bosses. So when the shadow Assistant Treasurer comes into this place beating his chest to demonstrate his wares for his union hack mates, do not be fooled into thinking that Labor have turned the page in the way they are consulting or engaging with business in this country.

I can provide an assurance to the House and to the people of Australia that Labor have not changed. Labor have stood against every measure that this government have undertaken over the last 10 years to bring about the economic reform that has delivered the prosperity to Australian families that we are experiencing today. They have stood against the GST. They have stood against every tax measure that we have put in place. They were even against tax cuts and superannuation measures put in place over the last 12 months and in previous years. They do not have any capacity to understand what is in the economic interests of this country—and that has been demonstrated again today.

The reality is that this government have consulted like never before with the business community and stakeholders—and this is the latest demonstration. We had an opportunity not to make the changes, to drive this bill through and not to listen to some of the concerns that were raised post these arrangements, but we did not do that. We listened to the concerns that were expressed and we have acted upon them. If there is any better demonstration of the way to consult with industry in this country then it needs to be brought to our attention. We have consulted not only on this measure but also on managed investment schemes—an issue which the shadow Assistant Treasurer raised. We have consulted with the stakeholders over a period of time, both before and after the decision was made, to make sure that we could refine the decision that we made.

In relation to managed investment schemes, the shadow Assistant Treasurer came out with a position in this place, saying that he essentially supported the government’s position. While he was saying that, his counterpart in the other place was trying to hold out some sort of false hope to the industry. That was demonstration of the way Labor walk both sides of the street. You have in the other place the shadow minister for agriculture, Senator O’Brien, holding out some false hope to the industry that Labor could change and provide certainty for managed investment schemes to continue as they were, and then you have this bloke over here, the shadow Assistant Treasurer, saying, ‘No, we’re not going to do that.’ That is a demonstration of how they walk both sides of the street. That is how Labor provided uncertainty in the business community and ultimately undermined the economy when they were last in power.

If people are thinking about looking to Labor in terms of economic skills, look no further than this bloke opposite, the shadow Assistant Treasurer. They do not have the capacity to run a trillion-dollar Australian economy. They do not have the capacity to engage with stakeholders. They have one thing on their mind, and that is looking after the interests of their union bosses—those who have put them in this place—and to look after their own interests. They have no interest in driving an Australian economy into the 21st century from success to success, as this government is very proud to have done. There is much work that continues to be done. We remain committed to it. That is why we have moved to support the Senate amendment today. Labor are still a great threat to the Australian community.

Chris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

What an extraordinary contribution from the Assistant Treasurer. I did not realise that the Australian Bankers Association was a trade union. It must have registered overnight with the Industrial Relations Commission. I did not realise that the Asia Pacific Loan Market Association was an affiliate of the ACTU. I did not know—I confess my ignorance—that the Australian Financial Markets Association was a socialist organisation. The Assistant Treasurer came in here and accused me of being a union boss. That is a major promotion. He also accused me of toeing the line of the ACTU, when what Labor have done is intervene to protect Australian business from his incompetence and his failure to talk to business about these changes before he introduced them. I refer to the submission of the Australian Bankers Association, in which it said:

The ABA has grave concerns about the content of Schedule 2 of the Bill, which contains proposed amendments to the interest withholding tax.

It holds grave concerns. The Asia Pacific Loan Market Association said in its submission:

Unfortunately the manner in which this Bill has been introduced—

by this minister—

has caused significant uncertainty and concern in finance markets.

It is this minister who is causing significant concern in Australia’s finance markets. It is this minister who does not understand the ramifications of what he has come into this House and moved. Now, in an embarrassing backflip, he has had to come in here and withdraw. I remind the minister that in my reply to him in the second reading debate I called on him to withdraw this schedule for further consultation. He arrogantly walked in here and said, ‘The Labor Party doesn’t understand business. It only listens to trade unions.’ No, we listen to business. We listen to a little organisation called the Australian Bankers Association. We listen to the other bodies that represent Australian financiers who are trying to raise money for infrastructure projects and other major projects throughout this country, who say, ‘This will make our job a lot harder.’ They say, ‘This will make it harder to get investment in infrastructure in this country.’ That is over and above this minister’s incompetence in failing to come into the House and move changes to section 51AD and division 16D of the tax act. This minister has yet to do that, and he is trying to make it harder by making these withholding tax changes—over and above his failure to improve the situation by changing 51AD and 16D of the tax act.

You know that the Assistant Treasurer is really desperate when he comes in here, gets his Crosby Textor folder out and starts talking about the Labor Party being influenced by trade unions and under the control of trade unions on this bill. He is really desperate when he comes and here and says, ‘It’s terrible, you know. The shadow Assistant Treasurer is listening to the ABA—that well-known socialist organisation the Australian Bankers Association’—

Alan Griffin (Bruce, Australian Labor Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Commos!

Chris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The coms, as the member for Bruce says. You know this minister is really desperate. He is trying to cover his own incompetence and his backflip. I have to hand it to the Assistant Treasurer—he does get points from me—he has got gall. He has got front. He has got more front than Anthony Horderns, as we say in Sydney. He comes in here and tries to protect his reputation by saying that the Labor Party is under the thumb of the ACTU. I would be very surprised if the ACTU has a position on the withholding tax treatment of debentures in this country. I would be very surprised if the ACTU congress has spent a lot of time thinking about this.

I see the member for Moncrieff having a chuckle up the back. Well he might, because he would probably make a very good assistant treasurer—in comparison with this one. If we have to put up with a Liberal assistant treasurer for this nation, the member for Moncrieff might do a better job than this one. He might at least go out and consult with industry. The member for Moncrieff used to work in the finance industry. He might at least understand that these changes have dire ramifications and that they should not have been brought in here without consultation. They should not have been brought in here without first going to the banks and financiers and asking: ‘How do you think this will affect Australian industries’ chances of raising finance overseas? How do you think this will impact on our ability to build infrastructure in this nation? How do you think it will impact on our ability to attract foreign investment into this nation?’ These are all things that this government parades around the boardrooms of this country, with its rhetoric, and says it is in favour of, but it does nothing about.

The Treasurer of this nation and his sidekick, the Assistant Treasurer, have a reputation in industry of failing to consult. This has been shown yet again in today’s legislation. (Time expired)

Question agreed to.