Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Link to this | Hansard source

It is a pleasure to speak on the Tax Laws Amendment (Research and Development) Bill 2013. This bill amends the Income Tax Assessment Act 1997 and involves a whole range of really good changes that we are very happy to support in this chamber. In fact, if people care to go through the detail, they will see that the amendment bill better targets the research and development tax incentive to businesses that are more likely to increase their R&D spending in response to government incentives. It does a range of others things in delivering a greater return for taxpayer funds. What particularly interests me about this amendment bill is that this comes back to us from the last parliament, where it lapsed when parliament was prorogued. There is a broad international view that the R&D spending of small firms is more responsive than that of large firms to government incentives. This is why Labor in government moved this: to make sure that we efficiently used taxpayer funds and better targeted the R&D incentives that are in place.

I will not go through all the detail, because I do not think it is necessary to lengthen the time the House has to deal with this, but I will make a few points. It is interesting now to note that the government is putting this forward and we are all supporting it—we all think it is a good idea—but you may not be surprised that, prior to the election, the mob on the other side who are now putting this through the parliament had a different view. I cannot help but put on the record that the then coalition spokesperson, Sophie Mirabella, said the following things about the very bill that is being put forward by her people, this government:

Julia Gillard said this was about jobs and innovation but this policy announcement is destroying confidence in the tax incentive that makes industry responsible for its own initiative.

So one view in opposition; a different view in government. I am not sure, Mr Deputy Speaker, if you can see a pattern building here, but it goes further—

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

You've never seen that before—it never happens!

Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Link to this | Hansard source

No, it never happens—the member across the chamber says. It goes further. In another quote the then coalition spokesperson, Sophie Mirabella, said:

We now know that large multinational companies won't be hit by the R&D tax cut, just like the carbon tax, and it is Aussie companies that will be struck by the cut—perversely, the opposite of Labor's claim to be creating Aussie jobs.

If you can make sense of that, you are doing better than me—because not only did that statement make no sense when they were in opposition, it does not make sense when they are in government. But what is good to see is that we are going to have the parliamentary secretary moving this really good bit of amendment legislation, which will be supported by the opposition. Labor will be supporting this because we wrote it, because we think it is actually really good.

There are a whole range of good elements to the amendments that will be good for the economy, will be good for confidence and will be good for what it does for the efficient use of taxpayer funds. I am happy that we will be supporting the amendments and we will be supporting what is before the House.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

I will make a few brief remarks about the Tax Laws Amendment (Research and Development) Bill. We have made the point elsewhere repeatedly that the Greens very strongly believe that science, innovation and research, and R&D more generally, is critical to our prosperity and that it is going to be vital to Australia having a strong economy after the mining boom. We are going to need something to do when the rest of the world tells us to stop digging.

Without investment in research and development our businesses will not be able to innovate and be competitive and our universities and our private sector researchers will not be able to make new discoveries and create progress—and, importantly for us, our ability to face the many challenges as a country and as a planet will be diminished. That is why we went to the election with a plan to increase Australia's spending on R&D to three per cent of GDP, both public and private—and it was fully costed. Sadly, our public sector investment has been on the decline in recent years. Indeed, the Chief Scientist has recently warned that it may go as low as two per cent in the coming year, one of the lowest national values in the OECD.

The Greens would not only boost public sector R&D spending, with our road map setting out how we would boost scientific research councils, reverse cuts to the Sustainable Research Excellence Program, fund open access publishing of government funded research and bring the best research talents to Australia and more, but we would also focus on health research.

During the election the now government made some positive noises about science and research and backed a Greens initiative in the last parliament to protect health and medical research from budget cuts. Sadly, one of the first acts of the government was to axe the position of science minister and abolish the climate change body, the Climate Commission. And, sadly, now with this bill we see further effective reductions in public and private spending on R&D.

The Labor member who was previously at the table said this is in fact Labor's policy. When it was announced under the previous government we opposed it—and we oppose it now. There will be a number of significant negative impacts from this bill including the offshoring of companies' R&D efforts, which will undermine productivity and reduce the capacity for collaborative R&D efforts and will hurt small and medium enterprises that contribute to the larger R&D efforts by big companies.

The legislation is also potentially technically flawed, as only large Australian companies will be affected while some companies with a multinational structure, and an international R&D effort, may not be covered—depending on the size of their turnover in Australia. And there will be continued uncertainty that will retard investment in R&D because this legislation is being implemented before the review and is being implemented despite promises made by the government at the election.

The bill will also reduce Australia's competitiveness because R&D regimes in many other countries around the world are far more generous. A recent report, published in October 2013, examining the world's top-100 global innovators—including industries such as semiconductors, computer hardware, automotive, telecommunications and pharmaceuticals—found that there is a direct correlation between a government's commitment to innovation, and its R&D tax policies, and its ability to attract and retain innovative organisations. Sadly, Australia is slipping down the Global Innovation Index. The index, published by the World Intellectual Property Organisation, shows that we have moved from 18th in 2010 to 21st in 2011 to 23rd in 2012.

We are also concerned about what will happen with the issue of quarterly payments, something the Greens fought for under previous parliaments and will fight to maintain. We will have more to say about that, and further amendments to move, when this bill reaches the Senate.

We need a strong research sector in Australia to help us move away from the industries of the past and to deliver the jobs of the future. This will mean ensuring that every dollar spent on research is spent well and that our great public research agencies like CSIRO, universities and our medical research institutes work together with each other, with industry and with international partners. We must increase our investment in research and target that investment strategically. We must deliver a stable and dependable funding environment to free our researchers from a rolling funding shortfall. And we must have a stable, supportive and adequate R&D tax regime for business that can enable innovation and improvement, not the flip-flopping and broken promises that we have seen regularly from the old parties.

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I rise to bring the debate on the Tax Laws Amendment (Research and Development) Bill 2013 to a conclusion and to indicate that of course the government will not be supporting Labor's proposed amendments. Once again we find ourselves in quite an interesting situation. Once again the Australian Labor Party has actually come into the chamber and indicated that they will oppose their very own savings measure. It was extraordinary to hear comments made by a variety of Labor members in this debate—including, for example, the member for Moreton and the member for Charlton, who remarked that there was no obvious reason that this needed to take place and that the government was in some way being hypocritical with respect to the legislation. From Labor's perspective, the hypocrisy was that we would adopt a savings initiative by the Labor Party that actually plays a key role of saving some $1.1 billion and helping the process of paying down Labor's debt. If that is hypocrisy: guilty. But I remind Labor members of comments made by the now Treasurer—the then shadow Treasurer—when he remarked here in the chamber on 16 May:

Hence the Coalition may decide not to oppose any of them, doesn't commit to reversing any of them, and reserves the option to implement all of them in government, as short-term emergency measures to deal with the budget crisis Labor has created.

Far from cutting to the bone, we reserve the right to implement all of Labor's cuts, if needed, because it will take time to undo all the damage this government has done.

They are the comments that were made. How extraordinary that in dealing with the mountain of debt Labor has left behind as their legacy, in dealing with the fact that the Labor Party actually saw unemployment increase by 200,000—that is part of Labor's legacy—and in attempting to unwind the excessive spending of the Australian Labor Party, we actually say we are going to stick by some of the savings announcements they make, and it is Labor that actually opposes their very own announced savings measures.

This is the reason the Australian people simply do not trust the Australian Labor Party. It is because Labor will say anything and do anything. What I personally find the most galling aspect of this debate is that Labor has said on numerous occasions how it is the coalition that apparently is the party for billionaires, and how it is the coalition that apparently is the party for big business. But Labor's amendment in relation to this bill actually seeks to reinstate a tax incentive for businesses with a turnover of in excess of $20 billion. That is what Labor's amendment does. Labor's amendment is to provide a gift back to Australia's biggest businesses—businesses with more than $20 billion worth of turnover. If that is not a gift to those businesses, then I do not know what is. I say to the Australian Labor Party: your hypocrisy seems to know no bounds. Do not even pretend to be concerned about Australia's so-called billionaires and about the mining tax and about incentives for big business and incentives for the wealthy when Labor itself comes into the chamber and moves an amendment opposing their very own savings measure and actually attempts to reinstate tax incentives—a tax cut, effectively—for businesses worth over $20 billion. It is extraordinary that that is Labor's approach. But I honestly should not say I am surprised, because I am not. It is entirely consistent with the approach of the now opposition, who say they will oppose everything. They take opposition quite literally, and they will oppose their very own savings measure.

I thank those who contributed to this debate, certainly from the government side—I thank the member for Bradfield for his contribution—but not so much opposition members. The bill does target the research and development tax incentive at small and medium companies, which are more responsive to such incentives than larger enterprises. From 1 July 2013 the R&D tax incentive is limited to companies with an aggregated assessable income of less than $20 billion. Larger companies will instead receive the normal income tax treatment for their R&D expenditures. This measure will produce an estimated revenue gain of $1.1 billion over the forward estimates period, an amount that will be available for other government priorities. And that is predominantly to repay Labor's debt.

The government does not support the amendments that have been moved by the opposition. They are amendments that seek to advantage companies with $20 billion of assessable income—extraordinary, given Labor's narrative over the past week or more. The government does not support the amendments because it is actually now the government who have adopted Labor's savings to try to make a difference to paying down the $430-plus billion of debt that Labor has racked up. For all of those reasons and the fact that this is a better targeted incentive as a consequence of the government adopting it, I commend the bill to the House.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Fraser has moved, as an amendment, that all words after 'That' be omitted, with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

The question now is that this bill be read a second time.

Question agreed to.

Bill read a second time.