Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I move:

That the amendments be disagreed to and amendments made in place thereof be agreed to:

(1)    Schedule 1, items 1 to 7, page 3 (line 4) to page 7 (line 7), omit the items.

(2)    Schedule 1, item 8, page 7 (lines 9 and 10), omit the item, substitute:

8  Section 12-5 (table item headed “political parties”)

Repeal the item, substitute:

(3)    Schedule 1, item 9, page 7 (line 15), after “under this Act”, insert “(other than Subdivision 30-DA)”.

(4)    Schedule 1, items 10 to 16, page 8 (line 26) to page 9 (line 8), omit the items, substitute:

10  After subsection 30-242(3)

Insert:

     (3A)    You can deduct the contribution or gift only if:

             (a)    you are an individual; and

             (b)    you do not make the gift or contribution in the course of ^*carrying on a ^*business.

(5)    Schedule 1, items 19 and 20, page 9 (lines 19 to 22), omit the items.

The government proposes that the House disagree to the amendments to the bill made in the Senate and accept in their place the amendments that I am moving on behalf of the government. Legislation to remove deductions or political donations was introduced into parliament for the second time in August 2008 in the Tax Laws Amendment (Political Contributions and Gifts) Bill 2008. Specifically, the legislation aimed to remove the ability of businesses and individuals to deduct a capped political donation up to $1,500, and remove the ability of businesses to claim political gifts and contributions under the general business expenses deduction provision. The Senate has proposed that businesses not be allowed to deduct political donations but that deductibility for donations by individuals be retained. The government agrees to the intent of the amendments proposed by the Senate; however, the specific form of the legislative amendments proposed by the Senate needs to be changed to avoid the creation of loopholes that would allow deductions by some types of businesses but not others. I note that the new measure will not reduce the tax expenditure as much as the original measure: the original measure saved approximately $10.5 million across the forward estimates while the new measure saves approximately $3.7 million. The government seeks to move amendments to the bill that are in the spirit but not in the form of those proposed by the Senate. Therefore, the government recommends that the House disagree to the Senate’s amendments and substitute the amendments that the government is moving in their place.

Just to recap, we accept the spirit of the Senate amendments, but they have been incorrectly drafted. We wish to give effect to the Senate amendments but in a way that ensures that all businesses are treated equally. The problem with the Senate’s amendments relates to some businesses—roughly, in the order of two-thirds of small businesses—being unincorporated, which under the Senate amendments means they would be treated as individuals, whereas incorporated businesses would be treated as businesses, and therefore there would be this unequal treatment of different businesses. That is the purpose of the amendments I have moved here in the chamber. We accept the spirit and intent of the Senate’s amendments, but they have not been accurately drafted. So I ask that the coalition support our intent to give effect to the spirit of the Senate amendments but in a more precise and accurate way, through the amendments that I have circulated here in the chamber today.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

The original aim of the Tax Laws Amendment (Political Contributions and Gifts) Bill 2008 was to remove all tax deductibility for donations to political parties. This was unquestionably an overreaction on the part of the Labor Party. We believe that at the core of the democratic process is the participation of ordinary Australian citizens. They are the ones who make up our electors and they are the ones who are the foundations of our political parties—especially on our side of the House. There are quite a few academics and commentators who talk about the antidemocratic nature of big donations from business and the unions. Yet I do not know of a single one who believes there should be less participation by ordinary Australians. The original bill would have done just that.

By removing the income tax deduction for donations, Labor would have effectively pushed the parties to place a greater emphasis on three categories of donors: businesses, who can claim the donation back in other ways; unions, who do not care about a $1,500 tax break; and high net worth individuals, who do not need a $1,500 tax break. That was Labor’s solution. No wonder that even the Greens, who normally support the most extreme positions on electoral reform, simply would not stomach or support the bill in its original form.

To this end, the coalition supports the changes that have been proposed in the Senate. If we are serious about improving participation rates in the political process, we cannot put more disincentives and more hurdles in the way. Perhaps Labor realises that it no longer has the support of ordinary Australians in terms of finance and is betting its future on the accumulated wealth of decrepit and dying trade unions. The irony is that fees to trade unions, which invariably come back as donations to the ALP, are fully tax deductible. So Labor, as usual, wants to have its cake and eat it too. It does not surprise me that members of the New South Wales Labor Party have come in for this debate, because they watch it very closely. Those in the New South Wales Labor Party always want to have their cake and eat it too, but I think their day of reckoning might well be coming. But I digress. Similarly, people can make donations to quasi political, religious, environmental, welfare and foreign aid groups. All of those are fully tax deductible. But a donation to a political party is certainly not, under Labor’s original bill.

Our fundamental position is this. The coalition support greater participation by individuals in the political process. To facilitate that, we believe there should be a level of tax deductibility which is neither too high nor too low. A cap of $1,500 is in our view the correct amount. That is about three per cent of the annual earnings for an average Australian worker. In conclusion: let me again express the concern of the coalition that the ALP is tampering with electoral matters before the finalisation of the green paper on electoral reform. While I am normally loath to ascribe bad motives to the Labor Party, it does make one wonder why they feel the need to push ahead with a law which makes it harder for every party other than the ALP—with its union war chest—to raise funds for both the campaigning and the day-to-day operations of political parties. Surely the appropriate time for the consideration of any bill, as the one before us, would be after the government’s response to the green paper has been finalised.

I note the minister has tabled amendments today from the government, which he says will give effect to the amendments that the Senate passed and insisted upon. There were 17 amendments in the Senate that the coalition and the Greens supported, which therefore became part of the bill. We are debating today whether the House should support the Senate in insisting on its amendments. The coalition’s view is that we should support the amendments from the Senate, and we will not be disagreeing with those amendments. The minister has tabled new amendments today. The first I saw of those amendments was momentarily before I started speaking in the House. I am very alone, I notice.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

You are always alone!

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The member for Banks is commenting outside of his place.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

We have filled the chamber for you!

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

Thank you! In the absence of any better advice, the coalition will be voting in favour of supporting the Senate’s amendments and will be voting against the motion of the minister.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

This is the problem. The Senate amendments essentially were to give effect to individuals being able to retain the ability to claim a tax deduction of up to $1,500 for political donations but not businesses. In drafting the Senate amendments, an error was made that means that a very substantial number of businesses would for these purposes be treated as individuals, whereas the other businesses would not. The consequence would be that some businesses would be able to claim a tax deduction of up to $1,500, while other businesses would not. This would be arbitrary in its operation. I do not believe that it was the intent of the Greens to arbitrarily apply these tax deductibility provisions in relation to some businesses and not others. That is why we are saying that we agree with the intent of the Senate amendments that individuals be able to claim the tax deduction of up to $1,500 but that businesses not be. However, in the drafting of the Senate amendment an error was made that provides that some businesses be able to retain that tax deduction capacity while other businesses not be.

This was not the intent, as we understand it, of the Greens in moving these amendments. I see the shadow minister is here, in the advisers box, and I will appeal to him right across the dispatch box to say, ‘Let’s be reasonable about it.’ If, indeed, the view of the coalition is that individuals should be able to claim the deduction—and that is what the shadow minister said in his presentation, that they want to retain that—we agree. But if the view of the coalition is that businesses should not be able to claim the tax deduction then they should in fact support our changes, which negate the amendment agreed by the Senate but give effect to the intent of the amendment agreed by the Senate.

The purpose of this debate here and my contribution in particular is to clarify whether the coalition in fact are prepared to accommodate the intent of the Senate amendments, which we are prepared to accommodate, or whether this is just a ruse. We want to clarify whether this is just a ruse in order for them to try to knock over this legislation, to knock over a budget savings measure which would prevent the tax deductibility of political donations of up to $1,500 by businesses. The shadow minister who has just spoken, the member for Sturt, has said, ‘Why not wait until a particular inquiry considers its deliberations?’ The problem is that the coalition, on matters such as this—that is, the tax deductibility of political donations by businesses—would rather wait forever. They want something that they can pin their argument upon, so that they can say, ‘Let’s just wait.’ If that is their position they should come forward and say, ‘The truth is that we disagree with the government and the Greens in their intent to deny tax deductibility for all businesses.’ If that is their position, at least the Australian public will know that. But to use as a ruse—and I hope they are not doing that—the fact that there is another inquiry and that they do not accept that there is an error in the Senate amendment drafting process, just as a way of sustaining and maintaining the tax deductibility of political donations by businesses, would be disappointing.

They should at least have the courage of their convictions and say that that is their position. If it is their position, fine; we will all know that. If it is not their position, if they have now realised, as a result of consultations that have occurred, that the Senate amendments have not been accurately drafted, then they will join with the government here and now, when we put these amendments, and say, ‘We accept the amendments to the Senate amendments.’ Then we can all retire from this debate happy in the knowledge that we have made some real progress in this area. I formally present the supplementary explanatory memorandum.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

I will speak very briefly. I will not hold up the House any longer. We will have the vote and be able to move on to the next item of business. The opposition support the 17 Senate amendments that have come down to the House. We voted for them in the Senate. They were put by the Greens to give effect to the opportunity for individuals to make political donations of up to $1,500 and still have tax deductibility for those contributions. We do not believe that government should be run on the basis of a minister providing to his or her opposite number in the House the amendments seconds before they are expected to make a decision on them.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

What did you do in government?

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

The first time, Member for Banks, that I was presented with these amendments was moments before I stood up to speak. It is unacceptable for the government to expect the opposition to change our position with absolutely no notice on the basis that, apparently, on this occasion, for the first time in history, they are telling the truth when they say that their amendments actually do reflect what the Senate has insisted upon. From bitter experience, we on this side of the House know that usually what the government say is quite different from what they do. So I am not going to take as the basic truth that these amendments reflect what the coalition support until they have been properly considered. We will be voting to insist on the Senate’s amendments and then the Senate can deal with this matter when it returns there.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

I find it interesting that the member for Sturt is squealing about the lack of notice in relation to these amendments when it was actually commonplace for his government to bring on substantive bills with a lack of notice. When we were in opposition, the then government used to drop those bills—some hundreds of pages of bills—on the opposition with minimum notice. I will quote some examples: you had the Tampa legislation, you had the intervention in the Northern Territory, you had the terrorism bills and you had the ASIO bills. These were substantive pieces of legislation.

What we have here is the government saying to the opposition that we agree now with the amendments that the Senate has proposed but there are some technical deficiencies in those amendments. We have redrafted those amendments so that they reflect the will of the Senate. The interesting thing is that Senator Ronaldson, the shadow minister, is in the chamber, in the advisers box. The committee which I chair, the Joint Standing Committee on Electoral Matters, took a much harder line than the position that is currently proposed by the Senate because we wanted to pare it all back to the previous position in relation to tax deductibility. We wanted to go further than this. But the minority report of the Liberal senators went nowhere near this in relation to holding the line that they are holding at the moment. The only comments they made were about anonymous donations. They suggested that our committee report be amended from what we were recommending, which was a $50 cap on anonymous donations, to $250. Their attitude was: ‘Let’s have this bill dealt with so that it includes all other amendments in relation to electoral matters—political donations and the like. Let’s do it all together.’ So it is a bit rich for them to be claiming foul, that what they have got is late notice of technical amendments.

The truth is that they should take the government on trust. They still have until the matter goes back before the Senate to expose whether or not these amendments live up to what we are saying. If the amendments the government have now proposed do not live up to what we are saying, then you have the numbers in the Senate to further insist on your old amendments. That is where you have got time to check and test and say, ‘The government have deceived us.’ I think what you will find is that the government have not deceived you at all. What the government have done is tidy up what the Senate was proposing. I am not critical of the Senate. The Senate makes a lot of amendments to government bills. Frankly, in terms of resources, occasionally its drafting does need to be further clarified. What I am saying to the opposition is: take us on trust. You have between now and when the Senate considers the matter to then say—

Christopher Pyne (Sturt, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

I’ll take you on trust, but not the others!

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

That is very kind of you.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The member for Sturt! The member for Banks has the call.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

The reason that I put that as an alternative to the opposition is that, if they vote in favour of the government’s revised amendments, that is not the end of the matter. It is not as if we have dudded you and it becomes law. It will have to go back to the Senate and Senator Ronaldson, the honourable shadow minister can go through it with a fine toothcomb—as he does. But I say to you: there is nothing wrong with taking us on trust in relation to the nature and quality of these amendments. What stands out at the moment in the government’s proposed amendments that looks fishy? Nothing. It is just, ‘We don’t trust you because we were given them late.’ I say to you: you have the safety net of giving us a belting in the Senate when these amendments return there—and that is the proper way to do it. It is obvious now that both sides have agreed on the defined area of this bill. That is what appears to be coming through. I am sure that Senator Ronaldson can maintain the rage in the Senate if what the government proposes is not what will actually be achieved by the bill. I implore the opposition: for once in your life take us on trust. If we let you down, give us a belting in the Senate.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

This is the flaw in the plot that the opposition is seeking to hatch here. I thank the member for Banks for not only his eloquent exposition of the argument but his advice to the coalition that, if, upon further consideration and passage of these amendments, the coalition forms the view that they do not give effect to the intent of the Senate amendments, the coalition could indeed deal with it in the Senate and it would not be the end of the match.

The shadow minister for education, apprenticeships and training has been protesting that he and the coalition only saw the amendments a few minutes ago. I have in front of me two documents: the Tax Laws Amendment (Political Contributions and Gifts) Bill 2008that is a covering note—and the actual amendments. The date on both of those is 26 May 2009. It is now 18 June 2009. Far from these amendments having been made available for the first time a few minutes ago, as asserted by the member for Sturt, the shadow minister, they have been available since 26 May. The coalition assert that this is the first time they have seen the amendments when they have been available for several weeks. The coalition strategy—the true motivation behind this—is now clear to me. It becomes clearer by the day and by the moment through this debate that the true intent of the coalition is to defeat the entire bill. That is the true intent of the coalition.

I just ask that they have the courage of their convictions. If the coalition have an ideological position on this bill, which provides that businesses are able to claim a $1,500 tax deduction for political donations, that is their position and they can be judged on that position by the Australian people. We now know it is their position, but they do not want to be judged by the Australian people on that position and have come up with this ruse that the government amendments were made available only a few minutes ago, with all the feigned indignation and outrage of the member for Sturt—’We only just saw it. We didn’t know. If we’d known, we might have voted differently, but we can’t.’ We see the old hangdog look: ‘We’d love to do the right thing by Australia and by the parliament, but, gee, we just haven’t had time to look at it.’ Well, 26 May is a fair while ago. These amendments have been available since 26 May and the coalition, and Senator Ronaldson, know that.

The House has substituted amendments for the Senate amendments. The House amendments result in a bill that removes the ability of businesses to gain a specific tax deduction for their political gift or contribution to political parties and Independent candidates and members but retains the availability of this deduction for individuals, other than in the course of carrying on a business, up to the current threshold of $1,500. Furthermore, businesses are not able to deduct political donations under the general business expense deduction provision, but the application of this provision to individuals seeking to deduct political donations would remain unchanged. Accordingly, the House of Representatives does not accept the Senate amendments and has substituted other amendments.

I make one final suggestion to the coalition: get on board. If you truly believe in the intent of the government’s amendments, you will vote with the government and we will all go away at least feeling that we have had a proper debate rather than this ruse with the coalition pretending it only got the amendments a few minutes ago and pretending that it agrees with the intent of the government’s amendments but has had no time to look at them. I urge the coalition one last time to support the motion before the House and pass the government amendments.

Question put:

That the amendments be disagreed to and amendments made in place thereof be agreed to.

Roger Price (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: quite rightly, you allow a little bit of flexibility in the dress of honourable members in a division, but I must say your tolerance of the member for Herbert’s dress goes well beyond the normal limits that you accept.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Chief Government Whip, that is not a point of order. It was tolerated on both sides of the chamber. I noted that during the division. There is no point of order.