Malcolm Turnbull (Wentworth, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

As I was saying yesterday before the debate was adjourned, the Tax Laws Amendment (2008 Measures No. 1) Bill 2008 represents an assault by the Australian Labor Party on democracy itself. It is designed to tilt the playing field of political contention, already tilted heavily in favour of the Labor Party, for the reasons I set out yesterday, even further in the direction of the ALP. The rest of the bill, which deals with carbon sink forests, superannuation and other matters, all being continued from the previous parliament, are areas that will have support from all members of the House, and certainly should be assured a swift passage. But to include this poison pill, poisonous to democracy itself, shows the cynicism of the government. No sooner has the Labor Party moved onto the government benches than it is seeking to rort the electoral system so its extraordinary advantage, in financial terms, is made even greater.

I believe Australia needs thoroughgoing campaign finance reform. We need to look at campaign finance issues thoroughly, and that is why the shadow Assistant Treasurer will be moving a second reading amendment to refer the material relating to tax deductibility of political donations to the Joint Standing Committee on Electoral Matters. It is vital that we look at this properly because we are all concerned with questions of political influence from donors, be they from either side. That is always going to be a legitimate issue. But what is at stake here is democracy itself. What price democracy if one side of politics is able to spend four, five or six times as much money as the other side on advertising in a political campaign? How can our political system be genuinely contestable if that advantage is entrenched?

I mentioned yesterday one practical proposal, which I have canvassed for many years, long before I was a member of this House, and that is that we recognise the principal that political participation is limited to individuals—people, natural persons—who are on the electoral roll. They are the only ones who can vote; they are the only ones who can stand for parliament. If we take that logic through to the issue of campaign finance, we would be saying that political donations can come only from individuals, natural persons, who are on the electoral roll—not from unions, not from corporations, only from natural persons on the electoral roll—who certify that the donation or contribution is from their own funds. We can have a discussion about whether there should be an annual cap—speaking for myself, I think there should be—and what that level should be. If we do that, we will restore integrity into the situation of our campaign finances, which at present is the subject of so much criticism, and we will also go some way towards ensuring that our political system remains truly contestable.

We support this bill with the exception of the provisions relating to the deductibility of political contributions. I warmly support the amendment I have foreshadowed that my colleague will be moving when he speaks.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

The Tax Laws Amendment (2008 Measures No. 1) Bill 2008 makes a number of welcome improvements to Australia’s superannuation and tax laws. Firstly, the government committed, in the lead-up to the last election, to remove the tax deductibility for donations made to political parties, candidates and members—although not quite in the way that the member for Wentworth was just foreshadowing. We very clearly put our position upfront—it was made in the course of the campaign—and we indicated that what we were proposing would have a significant impact—(Quorum formed) No wonder the opposition would want to interrupt this debate when we are talking about limiting the tax deductibility on campaign donations. As I indicated, we did take this position to the last election. This measure is about transparency and will have a significant impact on national revenues.

Prior to 2006, the deduction limit was $100. The previous government—the Howard government—increased that threshold to $1,500, expanding the deduction to donations to independent candidates and members and donations made by businesses. These measures also ensure that business taxpayers cannot now claim a general deduction for contributions and gifts to political parties, members and candidates. This ensures that there are no loopholes for business to access a deduction for political donations.

The previous government’s policy cost Australian taxpayers effectively $10 million per annum and removing that loophole is an overall efficiency gain to the Commonwealth. I would have thought anyone in this House would have seen that as a responsible course of action to take—anyone who was not out there overtly trying to protect the interests of businesses in their private donations to political parties, which we are not. Therefore I commend that provision of this bill to the House.

Secondly, this bill ensures that superannuation lump sums will be tax free where they are paid to persons diagnosed with a terminal medical condition. Under the existing super lump sum tax provisions, for example, a lump sum paid from a taxed fund to a person below age 55 is taxed at a maximum rate of 21.5 per cent, which includes the Medicare levy.

You may recall, Mr Deputy Speaker, that back in 2007 there was some media coverage of a particularly sad case concerning Ms Christina Finnimore. Ms Finnimore was diagnosed at the age of 43 with terminal breast cancer. She wanted to be able to access her superannuation and put in place various arrangements. Under the tax system presently, that is not possible without incurring a 21.5 per cent tax on the lump sum that is paid out. This provision was noted in the parliament last year. The Howard government did announce in September of last year that it would amend the tax laws to give effective relief on lump-sum payments out of superannuation where people have been diagnosed as being terminally ill and that that would be retrospective to September last year.

I have no doubt that these changes, which I am sure are going to be agreed to by the other side, will have a significant impact and benefit for people who are diagnosed as being terminally ill and, more importantly, their families; how a person is going to set about in those tragic circumstances putting in place proper arrangements for themselves and for their families. At a minimum, it is an exercise in ensuring that as far as possible we can relieve the financial stress for people in that very tragic situation. What constitutes a terminal medical condition will, as I understand it, be left to be provided in the regulations that will follow the passing of this bill.

These amendments, as opposed to being backdated to the date that the former government had indicated when they made the announcement, to September last year, under this bill will apply retrospectively to payments made on or after 1 July 2007. This is certainly going to be one of those provisions that will occur from time to time when we make tax relief for people in the most devastating of situations. I am sure it will make a significant difference for families and people caring for a person who is terminally ill. I also commend that part of the bill.

Thirdly, this bill deals with the Equine Workers Hardship Wage Supplement Payment and eligibility for a beneficial tax offset. You will recall, Mr Deputy Speaker, that the outbreak of equine flu caused enormous disruption in the horseracing industry and in those activities directly related to horseracing. In my former life I had the honour of representing strappers, stablehands and trackwork riders and I know these occupations are generally occupied by young people and they are also generally low-paid jobs. Unfortunately, the equine flu meant that many of the activities of horseracing stopped or slowed down so considerably that trainers and horse owners had to put staff off. The staff who were ordinarily being put off were those trackwork riders, stablehands and the like. It also applied to people who ran organisations associated with horse transport and their workers. This provision seeks to give some relief to workers and businesses in the horseracing industry who have suffered financially as a result of the equine influenza outbreak. Those individuals who have lost jobs or most of their income, and particularly those who are sole traders, whose income has effectively ceased, will pay no tax on their payment if the only income received by the recipient is the Newstart payment.

The final three schedules of this bill were introduced by the former government in the Tax Laws Amendment (2007 Measures No. 6) Bill 2007, which lapsed when the election was called. The first of these three deals with carbon sink forests. It will be an important contribution to the establishment of carbon sequestration and the delivery of natural resource management benefits by encouraging the establishment of carbon sink forests. The establishment costs of these carbon sink forests will be immediately deductable in the income years from 2007-08 through to 2011-12 inclusive. After that period, establishment costs will be deductable over 14 years and 105 days at the rate of seven per cent per annum. To be eligible to claim these deductions, taxpayers must be carrying on a business and the carbon sink forest must meet the environmental and natural resource management guidelines. As I said, this is something that was put forward by the last government. It is something that I think is very important. In terms of afforestation and our environmental needs, carbon sink forests play a very significant role.

Unfortunately, the former government refused to take a very practical step in the environmental fight. I point out that it took the election of the Rudd Labor government for the Kyoto protocol to be signed. Having done so, we will use a number of weapons to address environmental degradation, and one of those will be the provision of carbon sink forests. It is just regrettable that, whilst the former government was prepared to go with that proposition last year, in the whole 11 years of its government it could not see itself as having a place at the table on something that was going to be of a much higher order than that in looking at our world responsibilities, which flow from being a signatory to Kyoto.

There are a number of other provisions of this bill which deal with pieces of legislation that were proposed by the former government but did not make it into the parliament, having regard to the fact that the election had been called. I support the bill in its totality. I oppose the proposition advanced by the member for Wentworth about further relief to be given to supporters of the Liberal Party. It will not occur in this bill. This is a responsible piece of legislation and one which will have great benefits for taxation and, in particular, for superannuation recipients who have been diagnosed as being terminally ill.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I rise to talk about the Tax Laws Amendment (2008 Measures No. 1) Bill 2008. If this is an indication of how the government are going to move forward then it shows that, as opposed to improving transparency—and they are making all these noises about improving the operations of this House—they have been pretty tricky in this bill. It is their first tax bill. They put five very sensible measures into the bill and then one measure that they knew the Liberal Party would oppose because it is an attack on participation in our democracy. They then rolled it all up into one bill and presented it to the House. This foreshadows the way that the government will operate.

I thought I might initially address the five of the six schedules of this bill that the opposition will be supporting. We are supporting them for very good reason: four of the five are measures that were introduced by the opposition when we were in government and the fifth of those measures was part of our policy when we were in government.

The first of these is the exemption for superannuation payments to the terminally ill. This is schedule 2 of the bill. It concerns the taxation treatment of lump sum superannuation payments to people who have a terminal illness. This measure was announced by the Howard government in September 2007, by my good friend the shadow minister for finance. When he announced the measure, he outlined that we were doing it because we believe that we need to remove as many of the stresses as possible for people who find themselves in this terrible situation. I could not have said it better myself, and I completely agree with the intent of this measure. It will make superannuation payments tax free in the case of a superannuation lump sum payment made to somebody who suffers from a terminal medical condition. The exemption will apply whether the payment is made from a taxed or an untaxed source. The definition of a terminal medical condition is to be set out in the regulations that will be prescribed. We the opposition would expect that the government would consult widely with the medical profession and support groups when they draft these regulations.

Schedule 3 of this bill establishes a deduction for the capital costs of establishing trees in certain carbon sink forests. Again, this is a measure that was introduced by the coalition parties when we were in government. It was part of the Tax Laws Amendment (2007 Measures No. 6) Bill, which, sadly, lapsed on the calling of the election. The measure in this bill does not differ in any material respects from the measures that we introduced—with, I think, the slight exception of some changes in the names of portfolios and departments. We strongly support this measure. Encouraging the early establishment of carbon sink forests through providing immediate deductability for costs incurred in establishing a qualifying carbon sink forest during a five-year period is a very much needed measure. It was raised just yesterday with me by some businessmen in Western Australia, and they are very keen to see it passed. Significantly, the measure in the bill will not allow deductions to carbon sink forests established through managed investment schemes.

Schedule 4 of the bill provides for the extension of the beneficiary tax offset to equine workers who are suffering hardship as a result of the equine influenza outbreak. Again, this was part of a package of measures that was announced by the Howard government in September 2007 in response to the equine influenza outbreak. This measure will mean that low-paid workers and sole traders who have lost their jobs or have lost substantial income will be eligible for a wage supplement. This supplement will be received in the 2007-08 income year. Following years will also be eligible for the beneficiary tax offset. The intent of this measure is to extend the tax offset to the supplement to ensure the taxation treatment is consistent with that which we already give to recipients of Newstart allowance.

Schedule 5 of the bill provides that grants received under the Tobacco Growers Adjustment Assistance Program will be tax free where the tobacco grower undertakes to exit all agricultural enterprises for five years. Eligible grants will be up to $150,000. Again, this is a measure that was introduced by the former government, but it lapsed on the calling of an election.

The final schedule, schedule 6, amends the Farm Management Deposits Scheme to align tax law with the guidelines for declaring either all primary producers in a geographical area or specified classes of primary producers within a geographical area to be in exceptional circumstances. This measure is exactly the same as that which was introduced by the Howard government. The opposition supports schedules 2 through to 6 of this bill.

I return now to why we so vehemently oppose schedule 1 of this bill. It is an example of the trickiness of the way this new government intend to conduct business in this chamber. For them to take what is obviously a controversial measure that relates to our electoral system and put it in with these benign and much-needed taxation measures shows the hollowness of the government and the hollowness of their promises to increase transparency and improve the operations of parliament. Schedule 1 of the bill winds back tax deductability for political donations from the current level of $1,500 to nil. What it fails to do, of course, is to wind back the tax deductability for many of the things that traditionally fund the political campaigning of the Australian Labor Party. This is really nothing more than a naked political device to attack the funding base of the coalition parties whilst leaving Labor’s funding base intact.

I will give you an example of what will happen if this measure is to actually pass. A small business man wants to donate to the Liberal Party because he is worried about the return of unfair dismissal laws, for instance. That donation would lose its tax-deductable status. Yet union memberships, money that will directly fund ALP election campaigning, will still be tax deductable. Levies paid by parliamentary members of the Australian Labor Party to the Labor Party—and this is something that I understand Labor Party members are still encouraged to do—will still be tax deductable.

We have had the Special Minister of State rather sanctimoniously dressing up this measure as something to improve accountability within our democracy. But of course we all know what this is actually about. It is about maximising the power now at the disposal of the new government to unfairly disadvantage their political opponents and to advantage themselves. This is a measure that will directly affect participation in our democracy. It deals with the deductability of donations made to political parties as well as to candidates for election to any Australian legislature, local government body or members of such bodies. This is a measure that is intrinsically connected to our electoral process. So it is worthy that this House ask why the government sees the need to address this measure within a tax bill. I note that the Deputy Leader of the Government in the Senate has already put this question to the other place. Speaking yesterday in the other place he stated that the issue of tax deductability of political contributions is not a policy matter for the Treasurer but instead falls within the portfolio responsibilities of the Special Minister of State. So why would the new government then include this measure within a tax bill? There is only one answer to that question, and that is that they are being tricky and that they are doing it as a device to try and get the opposition to pass this measure along with the other needed measures that the opposition does support.

I observe at this point that the new government have made a real song and dance about claims that they would like to increase transparency and accountability, but of course within this tax bill we see that all they really want to do is play politics. What I would like to do and what the opposition would like to do is amend this bill to refer schedule 1 to the Joint Standing Committee on Electoral Matters, which is the appropriate place where, after every election, changes to our electoral system should be scrutinised. This has always been the practice in the past: changes to the electoral system after any given election will be referred to the Joint Standing Committee on Electoral Matters. The history of that committee is that the ALP have repeatedly supported tax deductability of political donations. Indeed, the initial bill that granted tax deductability to political donations was introduced during the time of the Hawke government. In submissions to the Joint Standing Committee on Electoral Matters in both 1987 and 1989 the Australian Labor Party claimed that the additional funds raised by political parties with tax deductability advantage would alleviate any pressure for increased levels of public funding, would encourage political parties to continue to seek direct support from the public and—very importantly, because this is the Australian Labor Party talking—would help them more adequately fulfil their social functions.

On 19 December 1991, under the Hawke government, the House of Representatives voted along party lines to introduce tax deductability for political donations. In 1991 that level was set at $100. The Political Broadcasts and Political Disclosures Bill 1991, assented to on 19 December, gave effect to the introduction of this tax deductability. That bill was introduced by the then Minister for Transport and Communications, Kim Beazley. So when the Australian Labor Party were in government—and this is a time when they obviously made up the majority within the Joint Standing Committee on Electoral Matters—they had nothing to say about the tax deductability of contributions to political parties. In reports after the 1990 election and the 1993 election, they were completely silent on their apparent beliefs about tax deductability for contributions to political parties.

The 1996 report of the joint standing committee included a recommendation to make donations of up to $1,500 annually to a political party tax deductable, which, of course, is what was introduced by the Howard government and what the current government is now trying to wind back. In the committee’s report on the conduct of the 1996 election, it was the Australian Labor Party that nominated $1,500 as the maximum level for tax deductability. This report was unanimously supported by members of that committee and it said specifically that donations to a political party of up to $1,500 annually, whether from an individual or a corporation, would be tax deductable. Membership of the 1997 joint standing committee again unanimously recommended tax deductability for donations from both individuals and corporations up to the threshold of $1,500.

On that committee were—and this is quite extraordinary—the now Deputy Leader of the Government in the Senate, the current Attorney-General and the now Parliamentary Secretary for Multicultural Affairs and Settlement Services. So those three members of the Labor Party have apparently had a substantial change of heart on this issue—two cabinet ministers and one parliamentary secretary of the current government.

The party system is an integral part of our democracy. It is a dangerous act to attack the role that political parties play within our system. The ALP is trying to entrench its incumbency, and that is obvious to everyone who takes a look at this measure. It is the act of a very conceited government. It is the act of a government that is putting its narrow interests ahead of the interests of our great Australian democracy. The savings from this bill will be about $10 million. Quite frankly, I believe that that is a price worth paying to enhance our democratic processes, of which political parties are an integral part.

There can be no doubting that this measure will entrench funding for the Australian Labor Party and will entrench funding of the Australian Labor Party from the union movement. That is the clear intent of it. This measure will keep tax deductability for the things that fund Labor’s election campaigns—which is funding from the union movement, by and large—but it comprehensively attacks the funding base of the Liberal and National parties, who are supported by donations from small business, from large business and from individuals within the community who would like to see a continuation of good governance in Australia. This is really nothing short of absolute egregious hypocrisy from the government. The coalition parties demand a level playing field when it comes to the funding of the two major political parties in Australia.

As I have stated, the opposition support schedules 2 to 6 of this bill but we will be moving to amend it to defend the integrity of our electoral system. It is completely appropriate that, at the conclusion of any election, changes to the electoral system be scrutinised by the Joint Standing Committee on Electoral Matters. There is absolutely no reason why the measures contained in schedule 1 of this bill are included with the other urgent matters that are included in this bill; as we know, the only reason for it is political trickery. I therefore move:

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

“the House is of the opinion that the provisions of Schedule 1 of this bill should be referred to the Joint Standing Committee on Electoral Matters for consideration and report”.

I urge all members of the House to support this amendment in the interests of Australian democracy.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Peter Dutton (Dickson, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to this | Hansard source

I second the amendment. I support the coalition’s second reading amendment and endorse the words from my colleague the shadow Assistant Treasurer on the Tax Laws Amendment (2008 Measures No. 1) Bill 2008. I want to confine my brief comments in this debate today to a very courageous and gutsy woman, Christina Fiddimore. As the Assistant Treasurer in the last government, I was very moved by the story of Christina Fiddimore. Schedule 2 within this bill really has come about because of her courage, her determination and the way in which she conveyed herself in this debate. At the moment Christina Fiddimore’s family is going through a terrible loss—the terrible loss of a mother, the terrible loss of a wife and the terrible loss of a daughter and loved one. I want to take the opportunity today, on behalf of all in this House, to extend our deepest condolences to the Fiddimore family—to her husband, Lee, and her daughter, Amelia, and to her extended family and friends.

Mrs Fiddimore’s case was brought to my attention in September last year when she wrote a moving letter to the Financial Review describing the circumstances surrounding her fight against breast cancer and the terminal prognosis that she had received. The basis of her concern was that she was not able to receive tax free the superannuation moneys that she had accumulated over her working life. She wanted to access those funds to provide financial security for her husband and daughter after her passing, which goes well and truly to the nature of the woman.

I spoke to Christina by telephone on Tuesday, 11 September. That was reported in the Financial Review on 13 September. Jill Margo, a journalist who had followed this case and who had reported on the case again, wrote a story on Thursday, 13 September. Jill should be congratulated for the way in which she has reported this case, and she should take great credit as well for the changes that are before the parliament today. In that article Jill wrote:

Christina Fiddimore is joyous. On Tuesday evening she was at her parents’ house when the phone rang. Peter Dutton, the Federal Minister for Revenue and Assistant Treasurer, was on the line wanting to talk to her.

“I was astonished,” she says. “The minister was calling me—personally! He said that both he and Peter Costello had received my letters, were very touched and wanted to make changes to the superannuation law immediately. In fact, he told me the changes would be effective by morning.”

Fiddimore thanked him on behalf of all terminally ill people, put the phone down and repeated what she had just heard to her mother. Then she burst into tears.

“They were tears of joy, relief and amazement. I haven’t experienced happiness like this for a long time,” she said.

When I spoke to her on the phone I got a sense that she clearly was moved by the decision that we had taken. It was not an easy decision for the government to take because, on the advice that we had received, it is always hard to provide for those who are most in need whilst not exploiting those in lesser need.

Treasury officials should be commended for quickly acting to provide the advice and ultimately the bill that was introduced today. I also acknowledge the work of Phil Lindsay, Daniel Caruso and my staff and, importantly, Anthony Albanese, Ms Fiddimore’s local member. Credit also goes to the now Assistant Treasurer and former shadow Assistant Treasurer, Chris Bowen, and Senator Sherry for their bipartisan approach which enabled this matter to be dealt with quickly. I know I speak also on behalf of the current shadow Treasurer when I say that the opposition will provide support to the government in the consultation process and the discussions about the formulation of regulations.

I also pay tribute to the Breast Cancer Action Group, which provided great support to Christina and her family. They deserve great credit for the way they professionally conducted themselves in what is certainly a very important debate. I will read a piece from this morning’s Australian Financial Review, again by Jill Margo. It read as follows:

Christina Fiddimore, who spent the last precious months of her life fighting for fairness in Australia’s superannuation laws, died on Sunday.

Just three days earlier, the government took the necessary steps to formalise the changes she had been campaigning for.

Last year, from her hospital bed where she was receiving treatment for metastatic breast cancer, Fiddimore wrote to the federal government explaining why terminally ill people should be given early access to their superannuation without having to pay a tax penalty.

Eventually, the government was moved by her plight and agreed to change the tax laws.

She was overjoyed and after using her payout to put the family’s finances in order, she booked a holiday to Egypt.

Since her schooldays she had dreamed of seeing the Valley of the Kings and last month, with her husband Lee and young daughter Amelia, she finally saw it in a wheelchair.

For her 44th birthday present, her parents paid for six nights at the Hilton Hotel in Cairo and some readers of the Australian Financial Review , who were touched by her story, chipped in too.

Can I again pay my respects to Christina’s family. Our thoughts and prayers are with them at an incredibly difficult time. I hope in some way they are comforted by the fact that Christina was a person they should be very proud of. She was courageous and determined in her fight. She leaves a wonderful legacy to other people suffering terminal illnesses. She is to be commended, remembered and respected by the House. I have great pleasure in being part of paying that tribute to her today.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I am sure all honourable members would associate themselves with the sentiments expressed by the honourable member for Dickson.

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I certainly endorse the sentiments of the member for Dickson, and I am sure I speak on behalf of all of those on this side of the House when I say that this amendment in many ways demonstrates the ability of individuals to shape and influence the institutions and the decisions of government. It is important that we support that.

I rise to speak in support of each of the measures proposed in this Tax Laws Amendment (2008 Measures No. 1) Bill 2008. I must say from the outset that, whilst I echo the comments of the member for Dickson, I do not support the amendment put forward by the member for Stirling which was seconded by the member for Dickson. I will speak to the issue of the schedule 1 proposal shortly.

There are some very good measures in this bill. I will not speak at length about each and every one of them but obviously I support schedule 2, the case that was inspired by Ms Fiddimore and her story. Those legislative changes will rectify that situation and demonstrate the necessary compassion that this place would like to see borne out in our superannuation laws.

In relation to schedule 3, I am very pleased to be able to participate in this debate because I have been very much involved in advocating the need for our tax laws to better reflect some of the social and environmental objectives that we as a community are seeking. This is an example of the tax laws being used for that purpose. This measure, which relates to the establishment of trees for the purpose of creating carbon sink forests, will allow the establishment costs of those forests, which would ordinarily be capital in nature, to be deductable. There are two parts to this: in the first instance, that expenditure would be deductable for the income years between 2007-08 and 2011-12. In the period thereafter, those incurring that expenditure would have access to the provisions of division 40, in order to obtain the benefit of ongoing deductions under the capital allowances regime, over 14 years and 105 days at a rate of seven per cent per annum.

This differential between the two approaches very much reflects the need to get on with the job when it comes to our responses to greenhouse gas emissions and our nation’s response to climate change. I am very proud that, in the short time since I was elected as the member for Lindsay, this government has taken significant action in respect of moving forward, making Kyoto something that this nation has now embraced and taking some of the necessary steps to implement our responses, and this measure will form a part of that.

I support the other measures, but I would like to comment more specifically on the only measure in this bill that seems to be in contention—that is, the provisions of schedule 1. Can I begin by saying that one very simple fact that has been ignored by members opposite is that this measure reflects an election commitment. I have heard members on the other side suggest that this is a rather odd place to find a measure such as this. I suggest to them, through you, Mr Deputy Speaker Slipper, that this is not an odd place to find a revenue measure—and that is precisely what this is.

This measure, which was announced in a media statement entitled ‘Labor’s $3 billion Savings Plan’ on 2 March 2007, was designed to achieve one thing principally, and that was to contribute to overall savings for the Labor Party, when it was in opposition, in terms of how it would not only present a platform for the election but also be able to deliver and pay for that. This is something that we put before the Australian people, and it forms part of our platform, part of our agenda. So members on the other side should not be surprised to see that, with such haste, we have brought this matter before the parliament—as we have done with other matters that form part of our legislative agenda. I think it is a little bit cute to be suggesting that this is not an appropriate place for this measure to be found.

One of the other measures that was contained within the $3 billion worth of savings was the measure that related to reversing an increase in MPs’ printing allowances. That reversal related to changes that had been made under the former government which had dramatically increased the printing allowance available to MPs. There is something that I find just a little hypocritical here. I do not want to fall into the same trap that the member for Stirling fell into with the exaggerations and the hyperbole that characterised his contribution to the House—I think at one point he said that there was ‘absolute egregious hypocrisy’ on the part of the government, and I will come back to ‘absolute egregious hypocrisy’ in a moment—but I would say that, in respect of the savings measure related to the increase in printing allowances, those members of the former government, now members of the current opposition, have remained rather silent on this issue.

I see from a review of the Hansard of yesterday’s proceedings in the House that the member for Wentworth had some interesting comments to make on the issue of incumbency. (Quorum formed) Yesterday the member for Wentworth said in this House:

The question that we have to ask ourselves, as Australians committed to a contestable democracy, is what price democracy if one side of politics has an inordinate share of the financial resources available for campaigning?

And he went on to suggest that this particular measure was about nothing more than entrenching the power of the incumbency that the government currently enjoys. I have to say that I find this rather curious, given the many measures employed by the former government—many of them at great expense to the taxpayer—in order to boost and entrench the incumbency of the then government.

I have already referred to the increase in the printing allowance. We could go into a very detailed discussion about the benefits to our great democracy of the $2 billion worth of political advertising that our community was subjected to over the 11 years of the former government. Unfortunately, I did not hear the member for Wentworth, the member for Stirling or any member from the other side suggest that to entrench the power of incumbents would in some way go to the very heart of breaking up our democracy. In fact, I think that the words of the member for Wentworth this morning were that this proposal was a ‘poison pill’—poisonous to our democracy. It defies explanation, it defies justification on his part to suggest that, and I intend to go through some aspects of how that is simply not the case. Before doing so, can I say that I welcome the member for Wentworth’s preparedness to engage in a discussion about campaign finance reform. But what I find just a little bit rich is to see the member for Wentworth, of all the people in this House, coming forward to talk about the evils of political donations and how this is a great scourge that this parliament has to stamp out. Of all people, I would not have expected the member for Wentworth to be leading the charge.

One of the things that I noted in the 2004 electoral returns was that the member for Wentworth himself submitted a return—as this great democracy requires—and in that return there are a number of expenditure and campaign items which come to the rather modest total of $609,000. That is how much money was raised and expended in the campaign for the member for Wentworth in the 2004 election. That is some serious political fundraising. The member for Wentworth is, of course, a former federal Treasurer of the Liberal Party.

Scott Morrison (Cook, Liberal Party) Share this | Link to this | Hansard source

Mr Morrison interjecting

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I hear an interjection across the chamber from the member for Cook, who, if memory serves me correctly, was also the state director around the same time. What you had back in those days was the member for Wentworth knocking on the doors and the member for Cook following him around with his cap, collecting all the shekels of those willing to make a contribution to the Liberal Party.

Such is the prolific reputation of the member for Wentworth’s contribution to fundraising in our great democracy that an article in the Daily Telegraph on 1 August 2007 detailed some of his fundraising exploits. In fact, to join the Wentworth Forum—the principal fundraising arm for the member for Wentworth and his re-election to the seat and, no doubt, many other aspirations that he holds—the meagre amount of $55,000 would get a seat at the table for one of the poor individuals that the member for Wentworth seems to think are being deprived of their democratic rights through the expression of this bill.

I find it extraordinary to hear the member for Wentworth come forward and try to teach us, with such eloquence, a great lesson about the need to curb donations from the big end of town. In my view, that is akin to being taught a lesson in good manners by Wayne Carey. It is not something that anyone would rightfully expect or be prepared to accept, given the sheer hypocrisy of it. To quote the words of the member for Stirling, I would say that it is ‘absolute egregious hypocrisy’.

If I can turn to the specific tax deductability issues of this bill, I want to quote from a submission by some experts to a previous Joint Standing Committee on Electoral Matters inquiry into these matters. Mr Orr and Mr Tham indicated in a submission that, in relation to tax deductions for donations—and, in particular, donations by companies—‘Such deductions by companies would also, in effect, generate a public subsidy towards the payment.’ Earlier in the footnote from which I read, it says, ‘This would be clearly against public policy,’ and it indicates that it would not be appropriate to extend deductability of contributions to corporations—which, I might add, is something that the former government did.

In relation to the tax deductability issue, it is a simple proposition that those on higher marginal tax rates get a greater benefit from the contribution that they make, so there is not a lot of assistance for a pensioner who wishes to make a contribution. In response to the member for Stirling, why should members of a collective organisation be denied the opportunity to contribute, any more so than an individual? It is an interesting point that the member for Wentworth made in relation to the so-called preserved and privileged position of unions within this system. The interesting point that he failed to make—and he would appreciate this, because I know of his great love of the minutiae of tax legislation—is in the specifics of the legislation, and in particular in section 50-15 of the Income Tax Assessment Act 1997, where it says that the tax exempt status that is afforded to trade unions is also extended to employer associations. So for anyone to come into this place and suggest that this is a one-sided tax exemption that exists for those trade unions is mere folly. Go and have a look at section 50; and, in looking at section 50, all members will be able to see that that is clearly not the case.

In relation to some of the peak bodies such as the Business Council of Australia et cetera, some of those bodies would also no doubt benefit from the taxation principle of mutuality, in which case they would obtain at least limited benefits from the taxation law in terms of contributions that they make. So please do not come into this House and suggest for one moment that trade unions in some way enjoy privileged status. The member for Wentworth made the startling observation that the trade unions contributed to the Australian Labor Party’s campaign at the last election. I cannot, for the life of me, figure out why they did not contribute to the Liberal Party’s campaign! They were determined to get rid of the former government’s unfair and extreme Work Choices laws. Don’t ever forget that, while those opposite failed to put their Work Choices laws before the Australian people, this very schedule that we are now debating was one of the measures that we did put before the Australian people. We have a mandate for it. We do not need to send it off to a committee in order to see whether or not a commitment we made needs to be delivered on. Unlike those opposite, we do not distinguish between core and non-core promises. It was a promise and we intend to deliver on it.

Can I also say that the member for Stirling I thought made some rather pertinent comments in one of his previous contributions to the House. He suggested that the most appropriate place for referring matters relating to the conduct of elections, specifically the conduct of elections that have just occurred, was to the Joint Standing Committee on Electoral Matters. I understand that the member for Casey, who is in the chamber, previously chaired one of those committees. I think that that is entirely appropriate. I would call upon the member for Stirling, the member for Casey and the member for Cook—in their zeal and great eagerness to see this matter referred to that committee—to reflect upon the previous comments of the member for Stirling in this place. He said the way in which elections are conducted are matters that should be referred to the Joint Standing Committee on Electoral Matters. I would call upon them to support the referral to that committee of the actions of some of their fellow Liberal Party members in the seat of Lindsay in the last election campaign. I would call on them to refer those matters to that committee for its specific attention. In doing so I would also ask that the committee consider the role of the member for Warringah, because he is on the record saying that the Warringah federal electorate conference, which I assume is some fundraising arm of his, contributed—and, in fact, if I can use the terminology—bankrolled the campaign in Lindsay. If he bankrolled the campaign in Lindsay I think it is incumbent upon this place and the committees that report to this place and to the other chamber to investigate these matters and to see specifically what role the member for Warringah and the electoral funds that he has collected had in the activities that occurred in Lindsay. I support the proposals that are contained within this bill and I am sure that the opposition will acknowledge the mandate that the government has in respect of these items.

Scott Morrison (Cook, Liberal Party) Share this | Link to this | Hansard source

In speaking on the Tax Laws Amendment (2008 Measures No. 1) Bill 2008 can I first go to schedule 2 and also add my support for the work that has been done in bringing schedule 2 of this bill to this House and for the bipartisan way in which this has been done. It is an incredibly important matter that has been brought through this bill under schedule 2. I am a new member of parliament and only in the first few weeks of my time as a member of parliament a very similar issue was brought to my attention by a constituent. It is very pleasing that, on this first trip to Canberra as a member of parliament and the first time sitting in this place, that matter is being dealt with so swiftly and I commend those on both sides for their compassion on this issue and for their promptness in bringing it to the attention of this place.

My intention today is really to address the matters relating to schedule 1. My colleague the member for Stirling has moved an amendment which relates to schedule 1 and deals with the tax deductability of political gifts and contributions being referred to the Joint Standing Committee on Electoral Matters. That is an amendment that I strongly support, and I strongly support it for a number of reasons. The modest deductions to taxpayers that have been provided for political donations were the subject of extensive and vigorous reviews by the Joint Standing Committee on Electoral Matters over the course of several parliaments. Over the course of those reviews, as the member for Stirling was saying, there was consistent support from those opposite for those measures. But I am puzzled because, within months of the election, in one of the first items of business, the new government has sought to overturn this commitment. The question must be asked: why? What is the reason for the change of heart? What has changed in the minds of those who sit opposite about tax deductability for political donations? Are they doing it because there is a profound problem with people providing donations of up to $1,500? If that is the case I am not aware of any record of that evidence ever being brought forward. I am not aware of any of the work that has been done by those who sit opposite demonstrating the mischief that has occurred for those people paying their $50 or their $100 or even their $1,000 supporting their local candidate at local activities and whatnot. If there is such evidence of these things then it should be brought to the attention of the Joint Standing Committee on Electoral Matters. I think that is one of the important reasons why the bill should be referred there—to take this evidence and to have a look at these issues—that is, if that is in fact the problem, which I suspect it is not. Is it to save money?

They stand here in this place and say this will save $10 million as part of that massive raft of budget cuts which the Minister for Finance and Deregulation has been bringing before this House. He has been talking about these massive cuts, which really amount to little more than Captain Feathersword when it comes to cutting budgets. When it comes to getting the nation’s finances in order they should look back to the work of the member for Higgins in 1996, when the government of that time inherited a two per cent deficit of GDP and that had to be turned around. That is what serious economic management and fiscal management is all about.

Ten million dollars, if my maths is right, is the cost of 10 part-time sitting days on a Friday in this place. This government is happy to have a part-time parliament sitting on a Friday and to spend $10 million on just 10 part-time Fridays, but it is happy to deny out of hand extending the opportunity and encouraging people who are seeking to support and get involved in the political process. Those opposite actually have an argument on this. They say that they have a mandate. In his speech on this matter, the minister says:

This commitment was made as part of ‘Labor’s $3 Billion Savings Plan’, which was announced by then shadow minister for finance on 2 March 2007.

I cannot actually recall what I was doing on 2 March 2007, but I am unaware of any subsequent references by those opposite to this great longstanding election commitment of theirs. I do not recall it featuring in the $30 million of ads and various programs sponsored by the union movement. I do not remember that being the core plank of their argument that they went to the people with.

The true mandate comes from a very different place, which has not spoken its name in the course of this debate. The true mandate was revealed by the minister’s colleagues who sat on the Joint Standing Committee on Electoral Matters. In their last report—a dissenting report—the Labor members of the committee made it clear when they said:

In stark contrast, the ALP Platform, as amended at the January 2004 National Conference is that ‘Labor will abolish the tax-deductibility of political donations.’

That is where the change took place. The change took place not through any sort of radical change in Labor thinking, not by those who sit opposite in this place. The change in policy that is now being put before this place came at the national conference of the ALP in 2004. So it was not from the Australian people but from the ‘bruvvers’ at the national conference. We remember that conference. It was the ‘new sensation’ conference. I remember the music. I remember the excitement of the members opposite as their new champion came strolling into the Sydney Convention and Exhibition Centre with INXS blaring across the speaker system.

Michael Keenan (Stirling, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Who was that?

Scott Morrison (Cook, Liberal Party) Share this | Link to this | Hansard source

I will come to that, Member for Stirling, because it is interesting who the champion was, who the new sensation was. That was the conference where those opposite thought the best person to lead Australia and our economy was—that is right—the former member for Werriwa, Mark Latham. And who was his chief champion? Who was the chief champion of the member for Werriwa to be the new sensation? It was, of course, the now Treasurer, who we know as the weakest link. You cannot have a government where the weakest link is the Treasurer.

Who was at the ‘new sensation’ conference? Who was in attendance at that wonderful conference down in Sydney? Let me look at what the member for Menzies had to say. The member for Menzies at the time issued a very informative statement. He said:

In total, at least 85 per cent of delegates are union members and officials, former and current members of parliament, Labor councillors and party apparatchiks, leaving at best 15 per cent of delegates representing the broader community.

Eighty-three per cent of Labor’s frontbench, at that time at that conference, was comprised of former and current unionists. There seems to have been a bit of a cull of that figure. It is now back somewhere near the low level of 70 per cent, but I am sure there are some members opposite who will be seeking to push that rate up again in the near future. More specifically, the member for Menzies observed that 58 per cent of the people who attended that conference were union members. So this is where the mandate comes from—not from the Australian people; the mandate came from the ‘new sensation’ ALP national conference of 2004.

Labor state secretaries—and I have known a few of them in my time—were quick to get on the front foot. Those opposite need to be careful about defying the all-powerful Labor state secretaries. Some have tried to do that in the past and they have paid the price—they are no longer in this place. In fact, some leaders of the then opposition at the time tried to defy some state Labor secretaries. They also paid the price. The Labor state secretaries have clearly got their tentacles all over this place. They have a big red hotline to this place, just like they have to every other parliament controlled by the Labor Party in this country. What is their intention? Let us come to that. Their intention is quite clear. I must commend the minister, because he does make it quite clear in his speech. He says:

To ensure that there is no loophole for business to access a deduction for political donations, these amendments also remove general deductions for business taxpayers for contributions and gifts to political parties, members and candidates.

We know who that means. It means small business. Labor do not want to hear from small business in this place. They want to make it harder for the voice of small business to be heard. That is why they are putting up this bill. Small business in this country does not fit into the definition of ‘working families’ as adopted by those opposite. They are not part of that definition and, as a result, they are being left out in the cold.

I can tell those opposite that you will find no harder-working families than small business owners. They take risks for their own future and provide a future for others. Who are the others that they are providing that future for? It is those who are non-working families. Non-working families do not get talked about too much by those opposite in this place, non-working families who need jobs—there are still some. We want to make sure that small business continue to have jobs, as the previous government did for 11½ years with two million jobs.

The bill also goes further. It does not just deny small business the opportunity to get more involved in the political process, to have the right to be encouraged to be part of that political process. The bill actually goes a lot further than that. It denies individual taxpayers—mums and dads, working families, self-funded retirees and students working casual jobs—that opportunity. These are the people who are not signing the big cheques; they sign the little ones. Labor’s message to them is that they are not welcome at the table of political inclusion in this country on Labor’s watch. They will have to sit out their turn as long as this government is in place. But there is one exception for those mums and dads; there is an exception for self-funded retirees, I suppose, if they could possibly gain access to it; there is an exception for the students who work casual jobs—that is, if they want to give a tax-deductable donation and make sure it finds its way to the Labor Party; they can do that through their union, as the member for Stirling pointed out earlier.

These are the people that Labor believes are the dark hand of undue influence on our political system—mums and dads bidding for toaster ovens in RSL clubs, who ask for nothing in return but to support their local candidate and a cause they believe in. The Brian Burkes and their mates are not the problem. The unions who sold Currawong in Pittwater to back up their ‘bruvvers’ in Canberra and who funnelled millions through their books to support Labor at the last election are not the problem—and I look forward to reading about the return of the member for Lindsay on that front. Those sitting down to $100,000 dinners with Morris Iemma and Michael Costa are not looking for a tax deduction; they are looking for a lot more than that, and the Premier of New South Wales and his ministers know how to give it to them. Those sitting around tables with Frank Sartor to do business are not the problem. It is the mums and dads bidding on toaster ovens in RSL clubs. They are the ones we have to deal with. These are the ‘great problems’ that have to be addressed.

This bill is about protecting the entrenched advantages of unions and, I might say also, big business and denying those same opportunities to mainstream Australians. The union movement already receives shelter from the Australian taxation system to bankroll the Labor Party at elections, as they did recently to the tune of $30 million. Dues and levies are deductable and unions do not pay tax on their political activities. The new measures extend the franchise for political inclusion for mainstream Australians. It is being done to balance up Labor’s ‘big money club’ of unions and big business. Labor and the unions know that you can buy an election in this country. They have proven it twice in New South Wales and again, through the efforts of the ACTU and their union friends, at the last federal election.

In 1999, Labor and the coalition spent approximately $6.9 million, according to the Election Funding Authority of New South Wales, on the state election. In 2003, Labor changed the nature of political campaigns in this country forever and spent $13.9 million—from $6.9 million to $13.9 million—with $6.3 million spent on television advertising alone. That was four times more than the coalition on that occasion. In 2007—if you thought that was big—$16.9 million was spent, trebling the coalition spend. This type of imbalance undermines our most sacred democratic institution: our elections. And you do not raise $16.9 million in $1,500 licks. You do not do that by auctioning off toaster ovens at RSL clubs. You do it through the union movement and you do it by putting the bite on big business.

There is no bigger set of teeth than those of the New South Wales general secretaries, present and past, in putting the bite on big business when it comes to dealing with the state government in New South Wales. That is the heart and soul of Labor’s ‘big money club’, which is now running the Rudd Government. The same people who put Morris Iemma and Bob Carr into government in New South Wales put this government in place here in our nation’s capital. The Labor ‘money club’ has nothing at all to fear from this bill. This is not something that will keep them up at night worrying about how they may continue to have the squeeze put on them by Labor general secretaries and about how unions may continue unencumbered in doing exactly what they have done at several recent elections in this country.

The other offence of this bill is its pretension. Labor are once again parading around as pillars of virtue, the champions of election finance reform. That is who sit opposite: the champions, if you believe them, of election finance reform. But it is a con. It is a con like so many of these pillars of virtue that parade around. If Labor are serious about this issue, then let the self-proclaimed new father of Federation, the Prime Minister, pull the states into line on this issue and consider some genuine options for reform, which are about providing a fairer, more inclusive and more transparent system. Let him ask the ACTU—let him ask them and all the unions today—to detail the lists and level of support they received from their donors and supporters at the last election. Let him do that today if he is serious.

The second reading amendment the opposition has put forward requests that schedule 1 be referred to the Joint Standing Committee on Electoral Matters. Let the joint standing committee consider these and other options. Let them look at how we could harmonise the laws between the states and the Commonwealth through the Australian Electoral Commission. I remember in New South Wales, when I put this up to colleagues on the other side, they would say, ‘Oh, that has to be dealt with at a federal level.’ Now is the chance for the new father of Federation to bring that into being.

Let us consider some other serious options. The Leader of the Opposition in New South Wales also recently put forward a very good idea, which is very worthy of the attention of the Joint Standing Committee on Electoral Matters, and that is the issue of expenditure caps—a cap on election expenditure, within a given time frame, in the lead-up to an election that applies at the candidate, party and third party and associated entity levels. The public would welcome, I am sure, some relief from the TV, radio and mail barrage they received, particularly from those opposite, during the last election. We should take a good look at whether that could work in this country. These are the matters that should be addressed by the joint standing committee and is why the amendment should be supported.

Free speech is important, but it would be hard to argue that the law of the jungle, as currently applies and as most vividly seen in recent New South Wales state elections, should be allowed to continue. We could hardly say it has produced a more edifying political contest. The cap proposal addresses a number of issues. I do not have time to go into them now, but I would be very happy to go into them when the Joint Standing Committee on Electoral Matters has the opportunity, which it should, to review these issues. We need to get the balance right on these things and that is something the committee can look at.

This is a very serious issue. It has been shuffled off into the corner of a bill which contains some extremely worthy measures; it has been shuffled off into the corner on the pretence of an election commitment. You would have to be quicker than Andrew Ettingshausen to catch it in time—you would have to be a lot quicker than ET to catch this one as it went through. There has been this big, grand statement that it was an election commitment; but, no, the election commitment was a direct function of the change of heart imposed on those opposite by the ‘new sensation’ conference in 2004.

Recent elections in New South Wales and elsewhere show that this matter is getting completely out of hand. The smell in New South Wales is getting stronger every day. Politics in this country should not be about how much money you have to put behind your argument; it should be about the merit of that argument. The charade that has been put before this House should be put to an end and exposed for what it is: a cheap use of numbers to press the political advantage of the Labor Party. (Time expired)

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

I thank all honourable members who have contributed to this debate on the Tax Laws Amendment (2008 Measures No. 1) Bill 2008. I particularly thank the honourable member for Werriwa, who is a very regular contributor to tax laws amendment bills and always makes a very worthwhile contribution. I say a very special thank you to the member for Lindsay for what I think I am correct in saying was his second contribution in the House and a very worthwhile one. We heard a lot in the last election campaign about the make-up of the Labor Party’s team. We saw advertisements saying 70 per cent were union officials and how the Labor Party was inexperienced and did not have the necessary skills. The Australian people passed judgement on that particular line of argument. I am particularly pleased that the member for Lindsay, who has a great deal of expertise in taxation matters as a former tax lawyer, is in the House and I look forward to his contributions on these matters, and look forward to using him as a sounding board from time to time on particular policy options.

Firstly, I will deal with schedule 2. This is a schedule which meets with bipartisan support. It is a schedule which was originally introduced in a slightly different form by the previous government by the member for Dickson, who is at the table on the other side. It met with Labor Party support at that time. I appreciate the comments of the member for Dickson in his contribution. I join with him in extending my condolences to the Fiddimore family. I acknowledge the member for Dickson’s efforts when he held the role that I now hold in introducing this measure into the House. I also acknowledge the tireless efforts of the member for Grayndler, who campaigned on this, and knew Christina Fiddimore through his work as her local member. I know he joins with the House in extending our condolences. She was a mother, and I am sure she is very sorely missed. But she leaves a legacy in public policy terms, and that is something her family can take some pride in that in her dying days she campaigned for a change in the law, which this House will enact today. I note that Ms Fiddimore was roughly my age when she passed away and I think roughly the age of the member for Dickson and the member for Stirling—a particularly tragic death. I am sure the House all join with the member for Dickson and me in extending our commiserations and in supporting this change to the law, which is very important.

Perhaps, unsurprisingly, the majority of comments referred to schedule 1 of the bill—and I note and thank the members for Wentworth, Stirling, Dickson and Cook for their contributions. I cannot say I found them particularly enlightening but I thank them for their contributions. I will deal firstly with the remarks of the member for Wentworth. He pointed out that—as I wrote it down—democracy itself was at stake in this particular bill. I thought perhaps I would coin a phrase that the member for Wentworth once coined himself on his way into the chamber: ‘That was just a touch overdramatised.’ Perhaps it was just a little bit overblown because this is a very sensible measure.

It is a measure which the Labor Party campaigned on clearly. It was a clear part of the Labor Party’s election campaign. The previous government tried three times to increase the threshold on tax deductibility. They tried in 1998, and that particular measure lapsed when the 1998 election was called. They tried after the 1998 election and the Senate, which was then not in Liberal Party control, rejected that measure. And of course they tried again in 2006 and on that occasion, with control of the Senate, they succeeded. The Labor Party opposed those measures and campaigned at this last election with a clear policy of removing the tax deductibility of election donations.

The 2006 changes were part of a wider series of changes—I would not use the word ‘reforms’, because that has a positive connotation—which increased the disclosure threshold, for example, from $1,500 to $10,000, which meant effectively you could donate $10,000 to each state and territory entity as well as the federal entity, and you could donate $90,000 to a particularly party of your choosing in secret.

The member for Wentworth says, ‘Democracy is at stake.’ I did not hear him coming in here saying democracy was at stake when the previous government put that legislation through. I did not hear him saying: ‘That’s outrageous. We shouldn’t be giving one side an advantage over the other,’ when they put that little trick through. I did not hear that sort of argument then. Now, in opposition: ‘We’re as pure as the white, driven snow. We are concerned about Western civilisation and democracy as we know it.’ That is somewhat of a disingenuous argument, and I think the Australian people will see it for what it is. The previous government also disenfranchised thousands of Australians when they changed the enrolment procedures for the election and in a very cynical way, which will be dealt with in due course by this government.

The Joint Standing Committee on Electoral Matters considered those changes. There was significant discussion about those changes and the issues were put on the public record. Accordingly, the government will not be accepting the opposition’s proposed amendment, but I will say this: when this measure goes to the other house, we will be referring it to the Senate Standing Committee on Economics for consideration. That is what happens: tax bills go to the Senate economics committee. The member for Stirling can refer it or I can refer it—I will refer it. The member for Stirling might not realise that that is where tax bills go: tax bills go to the economics committee. Tax laws amendment bills, as the member for Dickson would know very well, cover a wide range of issues, as this one does—lots of different schedules, a wide range of issues. The Senate economics committee always does a very thorough job in checking all the elements of the particular tax laws amendment bill under consideration, and that is what will happen this time.

I am not prepared to have this measure delayed while the opposition decides to have a talkfest on a matter that was clearly the Labor Party’s policy and which the Labor Party went to this election on, which the Labor Party has a mandate to do and which was discussed by the Joint Standing Committee on Electoral Matters quite a bit the last term.

I note the member for Stirling indicated that the government was somehow being tricky by including this measure in line with other measures. The member for Stirling will come to learn that tax laws amendment bills cover a very wide range of matters all the time—some of which are controversial; some of which are non-controversial. Not once in my time as the shadow Assistant Treasurer did I come in and criticise the member for Dickson and say, ‘This shouldn’t be included. This is too controversial.’ Not once did I do that, because I knew it was within my power as a member of this House to move an amendment to take it out. It is within the power of any senator to move an amendment to take it out and to deal with it separately, if either house so chooses. That is not what we will be doing. I never once criticised the previous government for doing that and I am surprised that on his first bill the shadow Assistant Treasurer chooses to criticise us.

I note that the member for Stirling said that this measure fundamentally attacks the funding base of the Liberal-National Party. I think that is what we call a Freudian slip. This is why they are concerned—because they feel it is an attack on their fundraising base. The Labor Party clearly said that we do not believe that it is appropriate that the Australian taxpayers subsidise donations to political parties. The Australian taxpayers already subsidise political parties through the electoral funding procedures. They already provide money to political parties. Why should they provide more through tax deductions? The Labor Party came to that view and campaigned strongly on it. The opposition has a different view. I accept that and respect it, but let us not have members coming in here, like the member for Wentworth, saying this fundamentally undermines democracy, when the member for Stirling belled the cat and said this fundamentally attacks the Liberal Party-National Party funding base.

The member for Stirling also referred to ‘egregious hypocrisy’. There was a bit of egregious hypocrisy during this debate, but it was not what the member for Stirling was referring to. We heard about unions and how much they advertised during the last election campaign. The opposition did not quite get there but they got very close to saying tax deductibility of union fees should not continue, that union fees should not be tax deductible. That would be a very interesting debate, to hear the Liberal Party argue that what is a fundamental principle of tax law in this country and has been for a long time—that expenses relating to your employment are deductible—should cease. They did not quite get there. They got very close to doing it in estimates yesterday in the other place, and some honourable members on the other side got very close to doing it today. If they want to go down that road, I am more than happy to have that debate.

But this is where we get to egregious hypocrisy. We had all these complaints about union advertising and how much that gave the Labor Party an advantage in the recent election campaign. We did not hear any mention of government advertising. Maybe I missed something. I was working in my office during the debate—I had some meetings; I was not concentrating—but I do not think I heard a member on the other side talk about the $2 billion over 11 years in government advertising that this mob gave the Australian people. Talk about an unfair advantage for a political party! Talk about undermining the fundamental principles of democracy! Talk about giving one side an advantage over the other with taxpayers’ funds! Give me a break. If you are going to talk about egregious hypocrisy, look in the mirror. If you are going to talk about undermining democracy, look in the mirror. If you are going to talk about undermining the fundamental principle on which the Australian political system is based—a level playing field for both parties—look in the mirror.

This is what they did over 11 years: they took Australian taxpayers’ funds and pillaged them for their own political purposes. Let us not have this hypocrisy from the member for Wentworth, the member for Stirling and others about the undermining of democracy by this bill, because the Australian people know what they did with taxpayers’ funds—they were reminded every night on the television. Just before an election was called, you could not get through an ad break without two or three advertisements from the other side that were paid for by the Australian people—

Duncan Kerr (Denison, Australian Labor Party, Parliamentary Secretary for Pacific Island Affairs) Share this | Link to this | Hansard source

By us.

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

by us, by every taxpayer in Australia. If they really want to be taken seriously on the matter of protecting democracy, if they really want to be taken seriously on the matter of providing a level playing field for both parties, then that is fine—the Liberal Party can write a cheque and repay the money. Give the money back that you took from the Australian people to fund your own election campaign. Egregious hypocrisy, thy name is the Liberal Party. They took taxpayers’ money and used it for their own political purposes. In most countries we would call that corruption. That is what it is called.

This is a very sensible measure. All the measures contained in this bill are sensible. I will refer schedule 1 to the Senate Standing Committee on Economics. They will hold hearings; people can make submissions. The Senate economics committee will do a thorough job, as they always do. I have no doubt that during this term, as the Labor Party fixes the legacy of the seriously lopsided electoral arrangements that the previous government left, there will be an opportunity for the Joint Standing Committee on Electoral Matters to look at all these matters in some holistic manner, but there is no way that I am going to allow the opposition to delay this very important measure. By the way, this is a savings measure, so that is test No. 1 failed—they are opposing a savings measure. That is test No. 1. There will be a lot more to come over the next few months. The opposition do not support a $10 million savings measure. Let us see how they go with the many more savings measures which will be put before the House, particularly when the budget is brought down. I commend the bill to the House.

Question put:

That the words proposed to be omitted (Mr Keenan’s amendment) stand part of the question.