Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I move:

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

"whilst not declining to give the bill a second reading, the house condemns the Government's attack on universal health care through its introduction of the GP tax."

The Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014 has three parts. It increases the Medicare levy low-income threshold, the point at which the levy starts to be paid, for families and their dependent children or students, in line with movements in the CPI, commencing in 2013-14. It contains amendments to protect against situations where taxpayers have anticipated the impact of announcements made by the previous government in regard to tax law which have been overturned by the current government and as a result have been left worse off—this is taxpayers who have filed tax returns; lest any listeners think this might have broader applicability. Thirdly it is to introduce an integrity rule to limit the ability of taxpayers to avoid paying tax by dividend-washing, which is a taxation loophole created by the tax treatment of franking credits.

The opposition welcomes the government's decision to increase the Medicare levy low-income threshold but we will not resile from our condemnation of the government's attacks on the universality of health care in the country or its very clear broken promises.

From 1969 to 1993 elections were fought in this country over Medicare. This side of the House defended it; that side of the House, the conservatives, worked to bring it down. That period, nearly a generation, was a time in which the coalition attacked Medicare. Now they have a chance to rip into health care again.

It is not just Labor members who are saying that; it is Liberal state premiers, health ministers and treasurers. NSW Premier Mike Baird, when asked about the federal health cuts, said:

The impact starts on the 1st of July. The equivalent here in New South Wales is over 300 hospital beds in funding disappears.

He also said:

The cuts have an immediate impact, and we’ve seen that in health, in terms of the funding in health, what we are seeing in the next 12 months is hundreds and hundreds of hospital beds … impacted. This cannot proceed.

Liberal health minister in New South Wales, Jillian Skinner, said:

There is no doubt there have been significant cuts to the funding of state hospitals in the federal government’s budget, …

It is cost-shifting and NSW will have to accommodate a loss of more than $1 billion over the forward estimates for hospital services.

Andrew Constance, Liberal Treasurer in New South Wales said:

We are deeply concerned about what this budget means for health and education services.

Campbell Newman, the LNP Premier of Queensland, said 'a big red cross is cutting health and education spending. It's not acceptable.' He also said:

Essentially, the Prime Minister and the Treasurer are saying 'well, you guys have to but deal with health and education, but we're going to take away the money for you to achieve the things that need to be achieved.' We're also concerned about the co-payment. And I know that Premier Napthine particularly agrees with me that this could see people using ambulances more frequently and also turning up at our emergency departments rather than put their hand in their pocket to go and see a GP. It is again of great concern that this has been done with in a way without sitting down with the states and territories to properly plan it.

Tim Nicholls, Liberal Treasurer Queensland:

Well, the potential impacts for it could be, for example, you'd have to wait longer to get treatment at a hospital, because we wouldn't be able to have as many doctors or nurses on hand to be able to treat people.

An editorial in the Medical Journal of Australia this week starkly outlined the view that health professionals have taken about this government's approach to health care. Written by Andrew Wilson, the Director of the Menzies Centre for Health Policy it says:

Chronic disease is a common cause of shortened working life, even when it doesn't kill.

The direct effects of the proposed federal Budget on prevention include cuts to funding for the National Partnership Agreement on Preventive health, loss of much of the money previously administered through the now defunct Australian National Preventive Health Agency, and reductions in social media campaigns, for example, on smoking cessation.

The cuts to preventive health are particularly short-sighted. When bringing down the budget, the Treasurer spoke about the importance of long-term thinking. Yet nothing better epitomises short-termism than cuts to preventive health.

It was my pleasure last year on behalf of the Minister for Health to launch the first report of the Australian National Preventive Health Agency. It was a very thoughtful report that looked carefully through the costs and benefits of preventive health treatments, and focused on issues ranging from obesity to road safety, from smoking through to exercise. Yet that agency is being slashed.

The editorial the Medical Journal of Australia by Andrew Wilson is also concerned about the government's proposed $7 co-payment for GP visits:

Other studies confirm that health care visits for preventive activities are the ones most reduced by financial hardship or disincentives.

The editorial goes on to concerns about hospitals:

The Australian Government's commitment to index its contribution to public hospital costs to population growth and the consumer price index will be insufficient to meet the predicted increase in demand for health care.

Blind Freddy knows that health costs have been running faster than inflation for decades, and so these changes in indexation are going to hit the ability of Australia's healthcare professionals to tackle some of the big healthcare challenges.

It is a pleasure to have the member for Blair here in the chamber with me. I know he has been a tireless advocate of closing the gap on Indigenous health. Yet, as he has so articulately pointed out, the cuts to health in this budget are going to make it harder to meet the Indigenous targets, to close the gaps in healthcare outcomes. Indeed, these outcomes, as he has pointed out, could be widened. The gap between Indigenous and non-Indigenous Australians could be widened by the decisions that are made in this budget.

These decisions are not simply wrong; they are a breach of promise. There is a reason that the Prime Minister and the Minister for Health are so keen on trotting out things that I wrote over a decade ago when I was in university, and that is because they do not want to talk about what they said when they were campaigning to be the government of Australia. They were very clear that there would be no cuts to health and education; yet we are seeing more than $80 billion of cuts to health and education as a result of the budget.

In addition to not honouring the National Health Reform Agreement, the Abbott government has cut $368 million out of health by abandoning the National Partnership on Preventive Health and another $201 million by breaking their promise and not honouring the National Partnership Agreement on Improving Public Hospital Services. These cuts are going to lead to the sacking of nurses and doctors, the closure of hospital beds, putting off infrastructure upgrades and sacking frontline healthcare workers like psychiatric nurses and psychologists.

Labor is fighting these changes, as are health experts across the country. The Australian Medical Association's national conference has called for an overhaul of the model proposed by the government because of its potential effects on the most vulnerable patients in the community. Steve Hambleton, the outgoing AMA President, said:

Overseas evidence shows that better health outcomes are delivered when barriers to primary care are low.

Front line primary care services are very efficient and are a low cost part of the Australian health system.

Encouraging patients to access this part of the health system reduces pressure on the hospital sector and can avoid the need for more expensive medical interventions.

Co-payments can hit vulnerable groups hard.

It is particularly striking that both the Prime Minister and I have shifted our view on co-payments since the early 2000s. In 2002 the Prime Minister said that co-payments were 'madcap'. He has since shifted from that view to now be at odds with health experts in Australia. I have shifted my view too, and I am proud to say that I now stand with Australian health experts and organisations like the Australian Medical Association and the Medical Journal of Australiadeeply concerned by the impact that this government's healthcare policies will have on the most vulnerable.

Brian Owler, the Sydney neurosurgeon widely known as the face of the 'Don't Rush' road safety campaign has said:

If a large proportion of their patients can't afford to pay the co-payment, then those practices might still be bulk-billing, but it will be the GP that bears the cost, and who will be financially worse off … the only way they could do it would be to see more patients. Instead of doing 6-minute medicine, they'll go to 4-minute medicine. That's not something that we want to see happening.

The government have claimed that they are going to set up a medical research fund but, in fact, as has been pointed out this really is like something out of The Hollowmen—a fund which is currently funded only by ripping out money from existing funds. Really, it is the trick pulled by Peter Costello with the Future Fund. It is not a serious investment in medical research for the future. This government's healthcare policies will leave Australians sicker and show a lack of concern for the most vulnerable.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time, to which the honourable member for Fraser has moved as an amendment that always words after 'That’ be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

The government came to office determined to restore integrity to the tax system. Our first order of business was to deal with the backlog of 92 announced but unenacted tax measures. This backlog was the source of considerable uncertainty for taxpayers and their advisers.    We moved quickly to announce a position on 28 of those measures and a predisposition not to proceed with the remaining 64 subject to consultation. With the benefit of discussions with the tax profession we then announced a firm decision not to proceed with 48 of those 64 measures.

While this includes measures that some taxpayers would wish we had decided to legislate, at least everyone now knows where they stand—and that is important. In some cases the Commissioner of Taxation announced an administrative approach which permitted taxpayers to reasonably anticipate a change in the law before it occurred, usually where the announced change was expected to operate retrospectively and to be beneficial for taxpayers. In deciding not to implement some announced but unenacted measures, the government also resolved to deal fairly with those taxpayers who had availed themselves of this approach.

Schedule 2 of this bill provides taxpayers who reasonably and in good faith anticipated particular tax law changes from having their tax liability reassessed or adjusted. Importantly, this is a specific accommodation that applies to a discrete list of unenacted measures. It is not a green light for taxpayers to anticipate tax law changes generally either now or in the future, including in respect of those measures the government has announced will proceed. Within the measure there are also safeguards. It will not prevent the Commissioner of Taxation from amending an assessment to give effect to a decision of the AAT or court on review or appeal.

Schedule 3 implements one of the measures the government has decided to proceed with, specifically to deny a taxpayer the benefit of franking credits they receive as a result of dividend washing. The measure addresses a loophole and helps to restore integrity to the tax system.

Acting swiftly and decisively on announced but unenacted tax measures means that we will be able to embark on the development of a tax white paper without a large back log hanging over us. That does not mean that we will shy away from making the tough decisions that are needed in the short term to get the government's finances back on a credible path to surplus. We did that with the recent budget. We are getting on with the job of restoring integrity of the tax system. We are getting on with the job of getting Australia's finances back on track.

We are introducing a three-year temporary levy at a rate of two per cent on individuals with taxable income in excess of $180,000 per annum. This recognises that everyone has to contribute to the task of rebuilding the nation's finances. We are also reintroducing indexation of fuel excise. Clearly, this will have implications for people, particularly those in regional and rural Australia, who travel long distances. We recognise that. But people from rural and regional Australia also understand that if you are going to build roads for the 21st century then you have to pay for them. In difficult fiscal conditions, with borrowings still at record highs, this is a responsible and measured approach to securing additional roads funding.

Over time we want a tax system that rewards hard work, enterprise and entrepreneurial endeavour. We also need a tax system that is simpler and that is more resilient to changes in the way commerce is conducted these days. Thanks to the government's swift and decisive action we can focus on that task without being weighed down by a backlog of measures stretching back more than decade. I commend the bill to the House.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I rise to speak on the Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014. I am quite pleased to do so because it gives me an opportunity to talk about a number of things which are either on the government agenda or well and truly included in the budget. The first one is the Medicare levy. This bill ensures that families who were previously exempt from paying the levy will continue to be if their incomes have increased in line with or less than the CPI. As such, it provides more low-income earners with free access to health care and that is a very good thing. It also provides protection for taxpayers who inadvertently failed to realise that there are changes to the tax law. It is a protection provision which gives certainty to taxpayers who are negatively impacted by the unenacted announcements by the previous government, providing that they acted reasonably in anticipating the announcement by previous governments.

This is a very good inclusion in the bill because there is, of course, a great deal of uncertainty out there at the moment with the way this government has handled itself. There are of course bills before the Senate now to abolish the loss carry-back provisions as of July last year which still have not passed the House. There are bills that abolish the instant tax write-off for small business as of 1 January this year that are still before the Senate. There is a debt levy coming as well. There is a range of things on their way and there is the abolition of the quarterly R&D credits for small business. So there is a range of things out in the ether generating quite a bit of uncertainty for business. We are likely to see, because of the lack of clarity by the government on a whole range of things, people getting caught in the middle between what they thought was going to happen and what actually does happen. In particular, I would like to talk about the Medicare levy and the changes this government has included in its budget. I want to say first that these changes are incredibly harsh and we all know that.

We are going to see people in large numbers unable to afford to go to doctors because of the GP tax. I want to point out once again, as I have a number of times in this House, that the pain the government is inflicting on families through this action is not improving the bottom line. The government claims over and over that these are harsh measures. They accept that they are harsh but they say they need to do them because they need to bring the budget back into surplus. Yet, when you look at the figures and at what they are achieving through harsh measures such as the GP tax, they will not bring the budget back into surplus any faster. In fact, the bottom line is slightly worse than it was in the Pre-election Economic and Fiscal Outlook.

We heard from the Minister for Immigration and Border Protection yesterday in question time about how PEFO contains the real figures—the figures that the government and the opposition do not have their hands on. If you compare what the government is achieving in its bottom line in this budget compared to PEFO, you see that the deficit will be $5.8 billion worse in 2014-15, which is this budget year, $12.4 billion worse in 2015-16 and $6.4 billion worse in 2016-17. When they come to the dispatch box and talk about these harsh measures being a way to improve the bottom line, we should all remember that, despite all the bluster and all the rhetoric, they have not managed to improve the bottom line at all. Their principal reason for inflicting so much pain through this self-confessed harsh budget is to improve the bottom line, yet they fail to do so by their own accounts.

The GP tax is a particularly harsh measure. We know anecdotally from people around the country, from doctors' surgeries and from professional organisations, that we are already seeing people cancel appointments on the basis that they cannot afford to go, even though the GP tax has not yet been introduced. It is a very cruel broken promise. It is designed absolutely as an attack on Medicare. We know that the Liberal conservative government has no love for Medicare. We know that because we have seen over decades how they have behaved when they got to the government benches. In the Whitlam years, we introduced Medibank. It was railed against by the conservative parties of the day and they managed to abolish it during the Fraser years. We introduced Medicare again in the Hawke and Keating years and then in the Howard years we saw the rates of bulk billing decline dramatically to such an extent that in some regional towns in particular you could wait several months to see a bulk-billing doctor. We know that they do not like Medicare.

After the Howard years we got back into government and started to work on raising bulk-billing rates again. We succeeded. In fact, in my electorate of Parramatta the bulk-billing rate at the end of 2012-13 was 95.3 per cent and 1,250,000-plus visits to doctors were bulk billed. Were the GP tax imposed on those visits in 2013, my electorate would have lost $9.1 million, which should have gone into my local economy but would have gone directly into the coffers in Canberra. That is an extraordinary amount of money for a community to lose and is an incredible impost on people who are least able to afford it.

In addition, in my community we also lost $80 million from the Westmead Hospital local services and a share of $8 million for the Children's Hospital at Westmead and two of my medical research institutes, the Westmead Millennium Institute and the Children's Medical Research Institute had funding totalling $22 million removed in

December last year and $100 million was removed from Westmead Hospital itself. So we have already had substantial cuts to the bottom lines of two of my hospitals and two of my medical research institutes, and now on top of this we are going to see quite a punitive $7 per visit tax, plus a tax on pathology and imaging.

I was down at one of my very good local health centres recently, a health centre in Harris Park which has a number of GPs plus specialist services. It is open until 10 o'clock at nights. It is open on public holidays. It works very closely with the local emergency department at Westmead Hospital. Emergency knows when it is open and quite often sends people down to the centre. I was talking to them about the red tape burden of this GP tax and the burden that they are expecting it to have on their patients. They were telling me about the high obesity and diabetes levels in Harris Park. In the neighbouring council of Holroyd, which sits up against Harris Park, the diabetes rate is 10 per cent of the population. Ten per cent of the population in that community have diabetes, and well over 50 per cent are overweight or obese. They were telling me about the regime of some of the more serious diabetes cases, who go to the doctor literally every second day to have bandages changed and have their blood tests when they need them. What an impost this would be on a person that actually had to go to the doctor every two days. What would happen? In fact, they had had some feedback from one of those people, who had said they probably could not afford it. The consequences of not affording it, if you have diabetes at that level, is amputation. It is effectively amputation. We will see people who need to go to the doctor who will not because of this $7 GP tax, and we will see people who think that maybe they need to go to the doctor who will put it off because of this $7 GP tax.

The irony in all of this—it would be funny if it were not serious—is that cutting support for primary care does not ultimately reduce your health costs. In fact, in the long run it increases them. It is an almost universal truism that what is best for the patient is actually cheaper for the taxpayer. It is cheaper for the taxpayer to immunise than to have whooping cough. It is cheaper for the taxpayer for people to go and have their blood tests and find out about an underactive thyroid or whatever, or diabetes, than let it go for a while. The earlier a person finds out and the earlier the medical intervention, the cheaper it is for the taxpayer and the better it is for the patient.

What is, of course, best for all of us is a focus on health in the first place, a focus on preventive health and staying healthy. But we have seen this government slash funding to preventive health, abolish the Australian Preventive Health Agency altogether and walk away from the federal responsibility for keeping people healthy. We saw John Howard do that as well. I remember sitting on this side between 2004 and 2007 debating issues of health and hearing the Prime Minister of the day, John Howard, talk about how the federal government does not have responsibility for preventive health. Again, it is an example of a government that considers that its bottom line today is more important than the bottom line of the future or the health of future generations. This is not a government that is prepared to invest now to save costs 10 or 15 years down the track and to save costs for families who ultimately will bear the price of this mistaken policy.

I am not the only one. We on this side are not in any way the only ones who are saying that this is a bad idea. We have had people, from doctors and the professional associations, talking about this, saying that this is a bad idea and that it can only lead to people avoiding visits to the doctor that they otherwise should have. In fact, we know from international experience that people will not seek preventive care or follow-up treatment where a GP co-payment is applied. That is exactly the opposite of what we need in this country. The only people advocating for this are the Abbott government and the Commission of Audit. The AMA, the college of emergency physicians, the Doctors Reform Society, the Public Health Association, the Royal Australian College of General Practitioners, the Consumers Health Forum, the Australian Healthcare and Hospitals Association and countless health academics and economists have advised against this tax, but the government is going to do it anyway. They have advised against this tax for two reasons. It will cause people who should go to the doctor to put it off or not go at all. Ultimately, when that happens, it increases the health cost, not decreases it. I, like so many on this side of the House, urge the government to seriously reconsider this. This is a bad tax that affects the health of our community and affects, ultimately, our health costs down the track. I condemn it. We on this side condemn it.

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

I will digress in a minute, because we seem to be talking about a lot of things that are not in the Tax and Super Laws Amendment (2014 Measures No. 2) Bill. I will come to those in a minute. An important aspect of this bill is that we are going to increase the Medicare levy low-income threshold for families for the 2013-14 financial year to be in line with movements in the consumer price index. This will ensure that the thresholds keep pace with consumer prices and that low-income families who did not pay the Medicare levy in 2012-13 will continue not to pay it in 2013-14 if their incomes have increased in line with or by less than the CPI. This is very important because, as you know, if you do not index those types of thresholds, with bracket creep you can start to get people who are affected by that.

The low-income threshold for couples and families will increase by $674 to $34,367, and the phase-in threshold will increase by $793 to $40,431. The amount added for each dependent child will also increase by $62 to $3,156. This will put money back into the wallets of low-income earners. And, as the Parliamentary Secretary to the Minister for Finance noted earlier in this debate, this bill is also about restoring integrity—and, might I add, certainty—to the Australian tax system.

Just to digress, though: the other side have been speaking a lot about things that are not even in this bill. Can I just comment on the Medicare co-payment and talk about what that is going to fund. That is going to fund the Australian Medical Research Future Fund. Earlier speakers on the other side were talking about things like preventative health and other issues. This fund will do more for preventative health and do more for the prevention of disease than anything that the history of this country has ever seen. On this side of the chamber, we are builders. We build things. We are about making this country better, stronger and, in this context, more healthy. We want this fund to be a world leader in medical research. How exciting is that for every citizen of this country?

I heard the member for Fraser talk earlier about how it is a trick. I think that is what he said. I think his words were that it is a trick like the Future Fund, which Peter Costello started. Well, if it is anywhere near as successful as the Future Fund, bring it on. The Future Fund, as we know, was—again—this side of politics building something. It was this side of politics looking into the future and wanting things to be sustainable. We saw that we had public servants who were going to retire, and there was nothing put away for the obligations that the government had for their superannuation, so that fund was started by this side of politics because we ran a responsible budget. We put $50 billion into it, and over the last six or seven years that has grown—I am not sure of the exact number—to be about double what it was. So there we have now a $100 billion fund which is sitting there because we built it, which has every public servant's superannuation obligation funded. That is what the medical research fund is like. If the medical research fund is nearly as successful in getting results for preventing disease and for improving the health of this country, that will be absolutely fantastic.

As the Parliamentary Secretary to the Minister for Finance also noted, we were elected, and we were confronted with a backlog of 92 announced but not enacted tax and superannuation measures, one of them dating back as far as March 2001. Again I come back to the point of sustainability. The one thing that tax systems have to have is certainty so that the investing public and businesses know what is in the tax system and there are not any surprises there. The tax system—unfortunately, as some people may think—has to be not only certain but competitive. I know that you know this, Mr Deputy Speaker Kelly. You have a business background. You have business experience, and you know that companies now can move. Companies are not always confined by geography. There have been examples where countries have lowered the corporate tax rate and—guess what?—they have collected more money. So our tax system not only has to be about certainty, which this bill certainly is, but also has to be competitive.

The backlog that this bill is dealing with had created considerable uncertainty for many taxpayers in the business community. The government has taken decisive action to resolve this backlog. We quickly moved to announce our support for 28 of these measures and a disposition not to proceed with the remaining 64, subject to consultation. We do not make decisions like those the member for Wentworth continually tells us about—decisions about NBN on the back of beer coasters—or irresponsibly. We make decisions because we consult. We go to people in the real world, in the real business world or the real tax world. We go through; we analyse it, and we make responsible and—dare I say it—adult decisions. That is what this bill is about with these tax measures.

Following the discussions that we had with the community, we said we would not proceed with 48 of those measures. However, in deciding not to go ahead, the government had to resolve how to deal with those taxpayers who had, in good faith, anticipated these changes before they were enacted. So again, as adults, being responsible, we said that because they had acted in good faith it was incumbent upon us also to act in good faith, and those protections would be measures in this bill.

The protection provision will protect and provide ongoing certainty for taxpayers who have self-assessed on the basis of the particular announced taxation measures that the government has decided not to proceed with. The commissioner's usual amendment and recovery powers apply in circumstances where the conditions for protection are not met. The measure does not apply more generally to measures that are not listed or to those that may not proceed as a result of future decisions.

The third aspect is related to dividend washing. Every sector of the economy and every sector of our world certainly has its own language, and 'dividend washing' is obviously very specific to the finance world. A lot of people get very confused about it. This is also referred to as 'distribution washing'. It allows an entity basically—Mr Deputy Speaker Kelly, you may well understand this and have dealt with this—to obtain multiple franking credit entitlements in respect of a single underlying shareholding. Common sense tells you that that should not happen.

To dividend wash, an entity sells shares shortly after becoming entitled to receive the franked dividend in respect of those shares, then shortly afterwards the entity purchases a new and substantially identical set of shares that also provides an entitlement to another fully franked dividend. This dividend washing enables sophisticated shareholders to effectively trade their franking credits to each other, with some shareholders receiving two sets of franking credits for the same parcel of shares. This practice can allow foreign shareholders who cannot use franking credits to sell their franking credits to domestic investors who can use them.

This measure amends the tax law to deny the benefits of any additional franking credits received as a result of dividend washing. The measure is targeted at sophisticated taxpayers who are exploiting a loophole in the existing provisions. Investors operating within the intent of the existing law will not have anything to worry about. Since this measure was announced, dividend washing already has been significantly curtailed.

This is a tax bill. As a country we need certainty in our tax laws and we need our tax laws to be competitive. As a government we look at the two sides of the equation: one side is spending; the other side is income, which is tax collection. What the budget and this bill are about, as we say in this chamber every day, is for our spending to be sustainable. For people who rely on the age pension, on the public health system, on the public education system or on any other welfare spending of this government, we want that to be sustainable. And for that to be sustainable the spending has to be responsible. On the tax side of the equation, that has to be competitive and certain. When you get both of those right, people can live in a system and know that they have comfort.

Unfortunately, a lot of governments and a lot of countries around the world do not get this right. It is very easy for a politician when they are in government—dare I point over there, Mr Deputy Speaker—to walk around throwing money around. That is very easy and it is lovely—there is nothing like walking into a group of people and splashing some money around because you might well feel like a hero. When politicians do that too often—there are many countries in Europe, and I would put the United States in the same category, where politicians do too much of that—without being responsible, they get themselves into trouble.

As a country we had the best set of books. Six years ago, when the coalition left government, we left this country with the best books in the world. We had a $20 billion surplus in the last year we were in government and we had put $50 billion aside into the Future Fund. We had a great set of figures. We were able to fund the welfare programs, health and infrastructure with certainty because we were being responsible. In six years we went from having the best set of figures in the Western world to having the fastest-growing debt of any country in the Western world. The result, in just that short space of time, is that we are now spending $1 billion a month in interest. That rolls off the tongue too easily, but that is $12 billion a year. What could we spend that on? One of the biggest infrastructure projects in my electorate, Mr Deputy Speaker Kelly, is also a major infrastructure project in the country: the duplication of the Pacific Highway. Do you know how much it is to do that? Do you know how much federal money is going into that? It is $5 billion to $6 billion. It has been a massive infrastructure project that is taking us decades to build and $5 billion or $6 billion worth is left to do. That is a lot of money. That is half of our interest bill in one year. The sad thing about that, Mr Deputy Speaker—and you know this because you have been a businessman—is that we will have that interest bill again, next month, next year. We have not repaid the debt; that is just the interest on the debt.

This bill with its taxation measures are about certainty. They are about businesses being able to function in this economy efficiently, effectively and with certainty so that as a government we can fund the essential services like health, education and welfare, as we should. I commend this bill to the House.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

Today I am pleased to rise in support of the Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014. This bill has been brought on to address three matters. One is to increase the Medicare levy low-income thresholds for families in line with increases in CPI. These changes ensure that Australians who did not pay the Medicare levy in 2012-13 will continue to be exempt if their incomes have risen in line with or by less than CPI. The second is to introduce measures to protect taxpayers who have self-assessed on the basis of particular announced taxation measures that the government has decided not to proceed with. The third is to improve the fairness of the taxation system by amending tax law to deny an entity the benefits of any additional franking credits that an entity receives as a result of a known process known as distribution washing.

On 13 May the Treasurer passed down the coalition's first budget. It was a tough budget but it was fair budget. At the heart of the budget was the notion to restore integrity to Australia's finances. We delivered a budget of both saving and building. It is a budget that ensures that we will get back to living within our means, just like households must do. In delivering the budget the coalition ensures that the effort to restore the mess left by six years of Labor chaos and calamity is shared amongst all Australians, while at the same time ensuring that it is done in a fair and equitable manner.

The changes under schedule 1 build on this notion by ensuring those Australians who did not pay the Medicare levy in 2012-13 are not unfairly affected by having the Medicare levy imposed on them if their income has risen in line with or by less than CPI. This measure leaves more money in the pockets of affected families, money that will make the day-to-day costs of living easier. It is an important measure because last year I and the Liberal Party campaigned on a platform of easing cost-of-living pressures for families. This is one such measure that will support that promise. The coalition is the best friend that Medicare has ever had. The Minister for Health has already spoken to the challenges Australia's health system faces and I commend Minister Dutton's recent speech to CEDA to anyone who is interested in the reasons for reform in this area. In short, the coalition is making the tough decisions to ensure the health of our system is sustainable into the future.

It is a disappointment that those opposite and their brethren in the other place would block the coalition's plan to fix Labor's mess. Their publicly stated aversion to passing around $18 billion worth of announced reforms to health, education and welfare is without foundation. Nor do those opposite respect our mandate to repeal the carbon tax and the mining tax, which would further ease pressures on the household budget. As has been restated many times in this place, scrapping the carbon tax will save households up to $550 annually. Schedule 2 of the bill, importantly, puts in place measures that bring to light the inefficiency of the dark Labor Rudd-Gillard-Rudd years.

Soon after the government was elected we were advised that 96 tax and superannuation announcements, with one dating back as far as March 2001, had not been legislated. In November the Treasurer and Assistant Treasurer announced that the coalition would finally deal with the backlog of announced but unlegislated tax and superannuation measures. This backlog created a significant operational uncertainty for businesses and consumers. Labor never did or never will appreciate the real-world consequences of stalled decisions on business. They never understood the impact of the delays and indecision and they still operate in a policy myopia bereft of any understanding of the importance on acting upon announcements.

Schedule 2 exists because of Labor's failure to deal with 96 tax and superannuation announcements before the change of government. These were measures that were announced and shelved to gather dust, because they were too busy concentrating on infighting and not on the important job of running the country—infighting and dysfunction that led to the fastest spending growth and the third largest increase in net debt in the OECD. It is a burden that those on the other side deny and are happy to wash their hands of, instead choosing to foist the responsibility for the decisions they made upon the next generation. This legacy is costing Australia $1 billion per month in interest payments or $500 annually for every man, woman and child in Australia. This is money that could be directed at hospitals, improved roads or schools. What is sad about the need to repay this money is that it is not being captured within the Australian financial sector. This is good money that is being sent overseas.

What were some of those 96 measures that were ignored or too uncomfortable for Labor to deal with? There was the famed self-education expenses cap, a proposal that would put a cap of $2,000 on the amount people could deduct for self-education expenses. At the time, the world's best Treasurer said that this was to target people who made large claims for first-class airfares, five-star accommodation and expensive courses.

Unfortunately for the member for Lilley, the reality could not be further from the truth. It does not take much to scratch the surface and discover that 80 per cent of the people who claimed this benefit are earning less than $80,000 annually. I was pleased that the coalition, sensibly, did not proceed with this measure. People on this side of the chamber will recall Labor's grand plan to close down the car-leasing industry with their proposed changes to the fringe benefits tax laws. These changes would make it harder for people to have a company or salary-sacrificed vehicle.

This $1.8 billion hit would have, according to the Australian Salary Packaging Industry Association, affected roughly 500,000 employees. Approximately 70 per cent of these people are on a salary that is less than $100,000 per annum—everyday Australians whose employers wanted to provide an additional benefit to their salary package and be more competitive in the marketplace.

Because the coalition understands business and does the hard yards to understand the real-world impact on people's hip pockets, we scrapped this misguided tax. It was a commitment we took to the election and one that we honoured.

As promised by the Treasurer, today we are honouring our commitment to the Australian people. Today we are ensuring that those people who self-assessed their taxation in good faith that Labor would stick to their word and implement the measures they announced while in government will not be penalised. The changes in this bill are retrospective acknowledgement that people made decisions on the little trust that they had left in Labor, believing they could deliver on their promise, only to be bitterly disappointed.

I am proud of our government's ability to hit the ground running and make decisive decisions that were holding business to ransom, decisions that deal with the ineffectiveness of those members opposite.

At heart, I believe in ensuring that we have a fair tax system and our amendments to schedule 3 of this bill are another step towards ensuring equity is maintained.

Those in a position to take advantage of the share market should adhere to the spirit of the rules governing the purchase and selling of stocks. Currently, sophisticated investors can undertake a practice known as 'distribution washing'. This occurs when an entity sells an interest shortly after becoming entitled to receive a fully-franked distribution in respect of that interest and then, shortly after, purchases a new and substantially identical interest that also provides a second entitlement to another fully-franked distribution.

The imputation system contains integrity rules to ensure that franking credits benefit only the true economic owners of shares and to ensure that franking credits are only available to shareholders in proportion to their shareholdings.

As was highlighted by the Parliamentary Secretary to the Treasurer, distribution washing contravenes both these principles. By closing this loophole we are ensuring that the tax system remains fairer for all. We are ensuring that those who have the capacity to take advantage of the share market are doing so in a way that does not give them an unfair advantage. This measure will raise $60 million, money that can be reinvested in health, education and building the roads of the 21st century. Already, since the announcement of the policy, there has been a significant decrease in activity that could be perceived as distribution washing.

While this affects a small portion of the market, it is important to note that trading activity has continued to grow. The coalition went to the election promising the Australian people that we would fix the budget. We promised to create jobs and we promised to break the cycle of debt and deficit that had been placed upon the Australian people. We made these promises because getting the economic fundamentals right is in the Liberal Party's DNA. Today the ABS announced that Australia's gross domestic product grew 1.1 per cent in the first three months of the year to bring Australia's annual growth rate to 3.5 per cent over the 12 months to March. This means on an annualised basis Australia's economy is now growing more quickly than the US, UK or New Zealand. In the words of the Treasurer, we can be cautiously optimistic that our plan is working.

Dr Carl Sagan once stated, 'You have to know the past to understand the present.' When the coalition left office in 2007 Australia had $20 billion in surplus and $50 billion in the bank. Australia is in the position that we are today because of the decisions Labor made over the last six years: decisions like the pink batts scheme, concocted and costed in two days with little or no consultation. Those two fateful days left a dark legacy and the stain upon the nation with the death of four good citizens and an economic cost of more than $2.8 billion. Decisions like the $16 billion BER for the construction of Gillard memorial halls that were overpriced and in some cases not even fit for purpose. Decisions like the gold-plated fibre-to-the-home NBN, which was conceived between Prime Minister Rudd and communications minister Stephen Conroy in a plane with an initial public investment of $4.7 billion. But, as was shown upon the review last year, it ballooned out to more than $73 billion and would have missed its completion date by three years. Decisions like the economic stimulus package which sent $900 cheques to around 27,000 Australians living overseas and 21,000 dead people.

The coalition is committed to ensuring sensible measures are put in place to address those failings, wrongs that left a Labor legacy of 200,000 more unemployed people, gross debt that without action was projected to rise to $667 billion, $123 billion in cumulative deficits, more than 50,000 illegal arrivals by boat, the world's biggest carbon tax and $191 billion in unfunded spending measures. It is now time for Australia to start repaying the credit card. Since coming to government we have taken practical steps to give Australia the bright future it deserves. The Tax and Superannuation Laws Amendment (2014 Measures No. 2) Bill 2014 is another step on the road to recovery. I commend the bill to the House.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

This is an opportunity to commend Australia's tax and transfer system and in particular shine a light on schedule 1 of this bill, which makes changes to the Medicare low income threshold. With your indulgence, Deputy Speaker, I will focus specifically on the schedule that has not been addressed in the debate so far, changes to the low-income threshold which make a significant change for people living with incomes in the range of $20,000-35,000. I mention it because it is almost an untold story in the budget and many of us look with a certain bemusement at left wing journalists who attempted to make broad assumptions about how people would be worse off in the 2014-15 budget when in reality they were unable to incorporate some of these very positive changes around safety nets that gave low-income Australians a real chance of being able to both afford the health system we are in at the moment but also weather periods when there are significant out-of-pocket costs.

Every health system in the world grapples with this simple fact that there are some people with chronic, complex and expensive health needs but there are also people who experience individual years of very high out-of-pocket health costs. Australia has quite an elegant way of dealing with it through safety nets introduced under the Howard government. I guess one of my concerns is that the level of understanding of these safety nets is quite poor. When you speak to people who are potentially eligible for the safety nets, many have not registered with the Department of Human Services to be eligible. Many are not tracing their use of general practice, optometric and other Medicare eligible out-of-hospital services to know that they are hitting the safety net at all. This is a very important piece of information not just because they exist but because in this budget we work to strengthen those thresholds for low-income earners and it appears in this legislation under schedule 1. I want to emphasise that now.

Stepping back in context, Australia has the most finely balanced, exquisitely balanced, health system on the planet with about half our population having access to private health insurance and half using a very high-quality public system. We achieved that balance not by accident. We achieved it by a coalition committed to getting there. We got there through health minister Dr Michael Wooldridge and his three-pillared approach to building confidence in private health care: the 30 per cent rebate that has been the subject of considerable detrimental tweaking by the previous Labor government; the Medicare levy surcharge, where if you do not take out private health insurance you pay an additional Medicare levy of between one and 1.5 per cent; and finally community rating, which works to ensure that, regardless of your health and age, you can enter and contemplate private health insurance even if you live in Rockhampton without having to be concerned about paying more. While there are obviously elements of adverse selection avoided, some people do criticise that system because of the moral hazard around potentially engaging in unhealthy behaviour but still paying the same price for your private health insurance. That is one for another day.

Back to the Medicare levy, the surcharge for high income earners who do not take up private health insurance is probably the most powerful of those three. It is a piece of policy unique to Australia, which was the first to adopt it in the late 1990s. Once again it is one of those elements of coalition social policy that has been looked at, examined and adopted in other parts of the world. The Medicare levy surcharge was in place mostly as a way to get more people to take out private health insurance, but let us make one thing clear: the Medicare levy does not pay for the Medicare system. The entire Medicare levy component, as discussed in schedule 1 of this bill, is only about 15 per cent of the total Medicare bill, so it is a contribution but in no way covers it.

At these levy calculations which change as a result of this budget and this bill, we know that at lower incomes people who are not paying tax into the system are not actually triggered to pay the Medicare levy. That makes perfect sense, doesn't it. What happened in this budget was that these thresholds were increased even more than CPI. That has important implications for some people who are living in those income ranges. If you are below the threshold, and that is $20,542, there is no Medicare levy payable. Between about $20,000 and $24,000, you are paying for 10 per cent of any of your excess above the $20,000 figure. But once you hit that $24,168 then the entire taxable amount is subject to a Medicare levy surcharge. These are reasonable as are the pensioner tax offset concessions, which ensure that if you are receiving a full pension the same thresholds are not triggered and you do not start paying a Medicare levy. For every reason this is good policy because there is no point having a tax churn down in the group or pulling into a tax system simply to pay a levy. That makes good sense.

What is important are the changes that we have made to the Medicare safety net. We have seen reductions, significantly, to $400 for singles and families, $700 for those who receive family tax benefit part A and $1,000 for others. People do not even know that these safety nets exist in many cases, and they need to. They need to know that the coalition has worked to ensure that families who are living in various parts of Australia can now still come under the one family safety net. That is an important piece of policy that makes our health system even more affordable.

The last important piece of policy intervention was to cap the amount relative to the scheduled fee that can be charged from an out of pocket, and that would be to prevent gouging in instances of very high medical bills that depart significantly from the Medicare scheduled fee. That makes sense and it avoids that gaming situation where a medical practitioner may say, 'You've already hit the safety net for the year so all of this will be paid for by the government, so please don't feel bad about this particularly large bill.' That gets addressed as well. People need to know when they hit the $400, $700 and $1,000, these simplified, much lower and much stronger safety nets are now in place thanks to the Abbott government. The Howard government was responsible for these safety nets. The Abbott government has strengthened them and schedule 1 of this bill works in a complementary way to ensure that people who are not paying tax are not hit by the Medicare levy.

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

I thank those members who have contributed to this debate. Schedule 1 of the Tax Laws Amendment (Implementation of the FATCA Agreement) Bill 2014 amends the Medicare Levy Act 1986 to increase the Medicare levy low-income thresholds in line with the consumer price index.

The families' threshold will increase from $33,693 to $34,367 and the threshold for each dependent child will also increase from $3,094 to $3,156. The amendments to the Medicare levy low-income thresholds apply to the 2013-14 year of income and future income years. The Medicare levy low-income thresholds for individuals and pensioners have already been increased by more than the growth in the consumer price index between 2011-12 and 2013-14. Full detail of this measure is contained in the explanatory memorandum.

Schedule 2 of this bill introduces an important measure to protect taxpayers who have self-assessed on the basis of particular announced taxation measures the government has decided not to proceed with. This protection measure arises from this government's decisive action to restore integrity to the taxation system by clearing the large backlog of announced but un-enacted measures left by the previous government. This backlog created considerable uncertainty for affected taxpayers and their advisers. The protection provision will provide ongoing certainty for taxpayers that were impacted by an un-enacted announcement for which protection is provided. Full detail of this measure is contained in the explanatory memorandum.

Schedule 3 of this bill amends the tax law to deny an entity the benefits of any additional franking credits that an entity receives as a result of distribution washing. To distribution wash, an entity sells an interest shortly after becoming entitled to receive a fully franked distribution in respect of that interest, then shortly after purchases a new and substantially identical interest that also provides a second entitlement to another fully franked distribution. The imputation system contains integrity rules to ensure franking credits only benefit the true economic owners of shares and to ensure franking credits are only available to shareholders in proportion to their shareholdings. Distribution washing contravenes both these principles by enabling sophisticated shareholders to effectively trade their franking credits and by enabling some shareholders to receive two sets of franking credits for effectively the same parcel of shares. It effectively allows foreign shareholders who cannot use franking credits to sell their franking credits to domestic investors.

Since the announcement of this policy, there has been a significant decrease in activity that could be perceived as distribution washing. Of course, this only affects a small portion of the market. Overall trading activity has continued to grow, with the value of trading increasing by five per cent since this policy was announced. Addressing distribution washing by closing the loopholes will support investment by improving the efficiency and integrity of the tax system. It will also help ensure the long-term sustainability of the imputation system for all Australians. Full detail of this measure is contained in the explanatory memorandum.

I note that the shadow Assistant Treasurer has once again moved an amendment in relation to legislation before the Health and take this opportunity to advise that the government will not support the amendment that has been moved by the opposition.

Dr Leigh interjecting—

I hear the shadow Assistant Treasurer say it is groundhog day. We continue to see silly amendments being put forward by the opposition, but it is entirely consistent with the silly approach Labor adopted to economic policy in Australia.

I note in the amendment that the Labor Party attempts in some way, shape or form to make reference to the government's co-payment by referencing, to use the words of opposition, 'the government's attack on universal health care through its introduction of the GP tax'. The extraordinary thing about this is that the shadow Assistant Treasurer, the person who has moved the second reading amendment, is indeed the one person who it would appear at first blush on the opposition benches least able to meet this amendment. I wonder whether the actual reason this amendment has been moved by the shadow Assistant Treasurer has less to do with a belief in policy or more to do with an attempt by the shadow Assistant Treasurer to earn some stripes with respect to his credibility amongst his Labor brethren.

In particular, the fact that the shadow Assistant Treasurer would attempt to, in some way, insinuate that a co-payment for a GP consultation is not an appropriate policy tool is slightly strange, given that the shadow Assistant Treasurer has put forward his strong support for a Medicare co-payment in the past. In fact, in 2003, in The Sydney Morning Herald, the shadow Assistant Treasurer wrote:

As economists have shown, the ideal model involves a small co-payment—not enough to put a dent in your weekly budget, but enough to make you think twice before you call the doc. And the idea is hardly radical.

He also said:

At the heart of the problem is that in health care, as with other goods and services, free provision leads to overconsumption.

So you can understand, I am sure, Mr Deputy Speaker, my slight bemusement at the amendment that has been moved by the shadow Assistant Treasurer, and you can understand the reason that not only I and other members of the coalition but also, no doubt, members of the public wonder about the true rationale for the amendment that has been moved by the shadow Assistant Treasurer—because clearly, given the shadow Assistant Treasurer's academic background in economics, and given the writings that I have just quoted from The Sydney Morning Herald, which the shadow Assistant Treasurer provided, I assume, as an op-ed, you can understand that the shadow Assistant Treasurer is in fact a devotee of a co-payment when it comes to medical consultations.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order under standing order 68 and the Speaker's ruling earlier today. I made a personal explanation earlier today, making it clear that I do not now support a GP co-payment, and I would ask you to instruct the honourable member not to force me to re-litigate that personal explanation.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Fraser. The Parliamentary Secretary to the Treasurer has the call, and I would ask that he take into consideration the requirements of section 68 as explained by Madam Speaker earlier today.

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

I will certainly do so, Mr Deputy Speaker. So let me be quite particular with the words I use. It is very clear that the shadow Assistant Treasurer held the view that it is not radical for there to be a co-payment with respect to medical consultations, and, furthermore, that the fundamental problem with the so-called free provision of a service is that it leads to overconsumption. I have no doubt that the aspirational side of the shadow Assistant Treasurer means that he has now got to walk away from his economics background, and he has now got to walk away from his true belief.

But that goes to the very core of the point I make, which is that there is, understandably, a clear understanding on this side of the House, and among the general public, that this amendment has been moved for the very same reason that the shadow Assistant Treasurer jumped to his feet just now, and indeed the exact same reason that the shadow Assistant Treasurer offered a personal explanation, and indeed the same reason why the shadow Assistant Treasurer has walked away from his belief that a co-payment is good policy—for one reason and one reason alone, and that is that the shadow Assistant Treasurer wants to make sure that he is in lock-step with Labor Party policy. And so—

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. As you are aware, members may not impugn the motives of other members, and I would ask you to draw the speaker's attention to that part of the standing orders.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

The parliamentary secretary has the call, and I do draw his attention to that part of the standing orders.

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

I take that on board, Mr Deputy Speaker. But it is self-evident to anybody who has been listening to this debate—and not only to this particular debate but to the general debate around a co-payment—to understand the rationale for the decision of the shadow Assistant Treasurer.

So it is that we see the Labor Party walk away from good policy. We see the Labor Party walk away from good economic policy, from good social policy and from an appropriate initiative taken to attempt, in some way, to make sure that Australia lives within its means with respect to the budget.

So the fundamental problem with the amendment that has been moved by the shadow Assistant Treasurer is that Labor is not proposing—either through this amendment or in the discussion that they have been having through the media and with the general community—to put forward any alternative plan for how Labor would fund the policy approach that Labor believes this country should be taking. It is one thing to be as populist as possible. In fact, it is understandable that an opposition, having been comprehensively rejected by the Australian public, would take the view that they need to do all that they can to attempt to appeal to the masses, so to speak, in their policies. But it is a separate thing for an educated individual like the shadow Assistant Treasurer to walk away from sound policy, to walk away from an approach that he himself was a fierce advocate for, for many years—a position which he took the decision to walk away from only in the last several days, knowing full well that it was done to benefit him politically. So the question that the constituents of Fraser can ask themselves legitimately, and the question that the constituents of Fraser can ask legitimately of their federal member, is: how many other matters of principle is he prepared to walk away from in pursuit of his political career? That is the fundamental question that the electors of Fraser can ask. How many other matters of principle is their elected representative willing to walk away from in pursuit of his ambition? Because it is crystal clear that he is prepared to walk away from this matter—something that he has believed in, obviously, for more than a decade.

Unfortunately, the approach of the member for Fraser—that is, the approach to reject sound policy in pursuit of short-term populism—is entirely consistent with the broader approach of the Australian Labor Party. The Australian Labor Party's approach with respect to this amendment and, more broadly, economic policy, is to reject any adherence to sound policy and to embrace a short-term, knee-jerk reaction in the hope that they can in some way build some political credibility off the back of some of the short-term concern that elements of the community express with respect to the budget initiatives that were announced.

I have said on numerous occasions, and the Prime Minister, the Treasurer and others have said on numerous occasions, that we understand that this budget and the initiatives within the budget are not popular in all strata of society, and we understand that there are elements in the community that dislike some of the initiatives. But the fundamental, inescapable fact is that these decisions are a consequence of six years of reckless spending, of six years of poor economic management and of six years of a failed economic approach that meant the pathway this nation was on, where we were borrowing a billion dollars a month just to service the interest on the debt that Labor had accumulated, what was unsustainable. But for the fact that Labor had racked up so much debt and so much deficit in such a relatively short period of time, these kinds of decisions would not be necessary.

If Australia were as healthy today in an economic sense as it was when the Australian Labor Party was first elected back in 2007, these types of choices would not necessarily have to be made. But now, faced with a crippling debt burden and faced with a prognosis from the independent Parliamentary Budget Office that indicates that unless structural change is made now, Australia will not be able to respond in the future, this government has done the right thing and taken the decisions that needed to be taken in order to live within our means. I commend the bill to the House.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I thank the Parliamentary Secretary to the Treasurer the. 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 the following words:

"whilst not declining to give the bill a second reading, the house condemns the government's attack on universal health care through its introduction of the GP tax."

The immediate question is that the amendment be agreed to.

Question negatived.

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

Question agreed to.

Bill read a second time.