David Feeney (Batman, Australian Labor Party, Shadow Minister for Justice) Share this | Link to this | Hansard source

I am very pleased to make a fine upstanding contribution to this debate in the context of our next speaker being momentarily detained. The Treasury Legislation Amendment (Repeal Day) Bill is obviously something that the Shadow Minister for Financial Services and Superannuation looks forward to attending to in just a moment. But let me say that schedule 1 to this bill amends the Superannuation Industry (Supervision) Act 1993 to repeal the pay slip reporting provisions. The pay slip reporting provisions in the SISA require employers to include in employee pay slips information prescribed by the regulations. It was intended that the regulations be made so that employers had to report on pay slips the amount of superannuation contributions and the date on which the employer expects to pay them. This is has not occurred. There are existing requirements in the Fair Work Act 2009 and the Fair Work Regulations 2009 for employers to include in pay slips the amount of superannuation contributions they are liable to make.

Schedule 2 of the bill makes mechanical and noncontroversial amendments to the Taxation Administration Act 1953 to consolidate duplicated provisions, repeal redundant laws and move longstanding regulations into primary law.

Schedule 3 to this bill amends the Financial Sector (Shareholdings) Act 1998 so that persons who do not hold a direct control interest in a financial sector company will no longer be deemed to have a stake in that financial sector company solely as a consequence of their associate's direct control interest in such a company. Under the existing law, a person must obtain approval from the Treasurer to hold a stake in a financial sector company of more than 15 per cent. A stake is defined in clause 10 of schedule 1 of the FSSA as: 'the aggregate of the direct control interest held by that person and the direct control interest held by associates of that person.' Associates is widely defined in clause 4 of schedule 1 of the FSSA to include a person's relatives, their partners, related companies and other parties.

Where a person acquires a direct control interest of more than 15 per cent in a financial sector company, the associate of the person is also required to obtain approval to exceed the 15 per cent shareholding limit. This can be despite the associate holding no direct control interest or, indeed, any interest. While I am very keen to continue making these points, I must now defer to my colleague, who I know is far more intimate with the material.

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

If I could thank the member for Batman for dutifully and skilfully taking over some duties and negotiating through as he is well known.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

We have just experienced an excellent contribution to the debate.

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

A fine and excellent contribution, and that is why he is doing so well. I do rise to speak on the Treasury Legislation Amendment (Repeal Day) Bill 2014. There are a number of measures that I want to speak to, each of them separately. They are all important and make some important changes, in particular to the Superannuation Industry (Supervision) Act 1993, to repeal the pay slip reporting provisions.

The pay slip reporting provisions in the SIS Act require employers to include an employee pay slip information prescribed by the regulations. People would be familiar with this when they look at their pay slips and see a number of things that are included, including their superannuation entitlements and payments. It was intended that regulations be made so that employers had to report on pay slips the superannuation contributions and the date on which the employer expects to pay them. This has not occurred. There were existing requirements in the Fair Work Act 2009 and the Fair Work Regulations 2009 for employers to include in pay slips the amount of superannuation contributions they are liable to make. These regulations are not changing. The requirement for superannuation guarantee payments to be made within 28 days the end of a quarter is also not changing. The provisions this bill is removing were enacted in legislation but never made a practical reality for business because the regulations needed to enact them were never put in place.

There is no doubt that the intentions of the original changes were good. The reality for employers, though—particularly small business—was increased cost via software and other upgrades. It is arguable whether the requirements being repealed would have any affect at all on those negligent, unscrupulous employers who intend not to pay superannuation. In light of that, these changes have been brought forward.

Employees will still be able to check with their fund whether payments have been made by their employer. That is critically important. Labor will monitor closely the issue of unpaid superannuation payments, as should the government, because this is an important part of an employee's salary and payments. It is just what ordinary people are paid. The same as anybody else, we expect that when we get a pay slip and it details how much we are paid, it also includes superannuation contributions. There is of course an expectation that those payments have actually been paid into our respective accounts, wherever they might be. We will monitor that and we would expect the government to do the same thing, particularly in light of the importance of superannuation in terms of boosting people's retirement savings.

There is no political party in Australia that has done more to boost the retirement savings of Australians than Labor has. Going back many years, Labor has recognised that ordinary people need to have a mechanism available to them through the superannuation guarantee to set aside money for their independence and financial security in retirement. As noble a cause as it is, it is an important cause for individuals and families. What it also means is a huge saving to government, to the budget and to the bottom line.

This is a good measure. Just last financial year alone, some $6 billion was saved from the budget because of superannuation savings held by ordinary Australians. They are people who, because of their retirement savings, either do not rely at all on the pension system or other welfare payments or rely only in part on government payments. This is something that should be encouraged. It should be grown; it should be leveraged up. The government should do as much as they can to ensure that continues to happen and to ensure the stability of the system. This first schedule is important in making sure that we understand the basis of what is contained on people's pay slips.

Schedule 2 makes mechanical and non-controversial changes to the Taxation Administration Act 1953 and consolidates duplicated provisions. It also repeals redundant laws and moves longstanding regulations into primary law. Labor supports these measures. They are good measures and measures that, in government, we were also moving towards. This is always the case. Regardless of how long you are in government, you cannot do everything all in one day or all in many days. Like all governments, towards the end of a term there is always some unfinished business. This is part of that unfinished business.

Schedule 3 to this bill amends the Financial Sector (Shareholdings) Act 1998 so that persons who do not hold a direct control interest in a financial sector company will no longer be deemed to have a stake in that financial sector company solely as a consequence of their associate's direct control interest in the company. Under the existing law, a person must obtain approval from the Treasurer to hold a stake in a financial sector company of more than 15 per cent. A 'stake' is defined in clause 10 of schedule 1 of the FSSA as the aggregate of the direct control interest held by that person and the direct control interest held by associates of that person. 'Associates' is widely defined in clause 4 of schedule 1 of the FSSA to include a person's relatives, partners, related companies and other parties. Where a person acquires a direct control interest in a financial sector company of more than 15 per cent, the associate of the person is required to also obtain approval to exceed the 15 per cent shareholding limit. This can be despite the associate holding no direct control interest, or indeed any interest, in the financial sector company. This imposes a burden for associates to reasonably comply with the law, particularly where associates are not aware of the requirement to seek the Treasurer's approval.

The measures in this bill mean a person who does not hold a direct control interest in a financial sector company will no longer be deemed to hold a stake in that company solely as a consequence of their associates' direct control interest in the company. Only where a person holds a direct control interest of any size would the interest be aggregated with that of the person's associates to determine the total stake held. For an associate holding a direct control interest in a financial sector company, the associate's stake is equivalent to the aggregate of their own stake and that of other associates, including the person acquiring the actual direct control interest. The associate is required to seek the Treasurer's approval where the aggregated stake exceeds the 15 per cent shareholding limit. It is important to note that these changes will ensure that there is appropriate examination of a shareholder's controlling interest. But it will take away the trap of associates who have no control interest in having to apply to the Treasurer in order to comply with the law. Labor supports removing this unnecessary burden.

Further, schedule 4 rewrites provisions from the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953 to unify the definition of 'Australia' for tax purposes. This is a non-controversial mechanical change with no fiscal impact. Labor supports this change as well.

Labor is always prepared to support any fair and reasonable amendments and changes that improve the management and structure of our financial services sector, or other measures that improve consumer protections and also improve the ability of business to deal with regulation properly. Labor understands that good regulation is the best outcome for business, where that regulation is clear and concise and where it provides the right mechanisms for business to get on with their job. Labor wants to make sure that, particularly in the case of superannuation, employees have a clear understanding of what is required by employers in terms of providing their superannuation guarantee. This is in the best interest not only of individuals; it is also in the best interest of employers, companies and business.

It is in the best interest of Australia because it grows our national savings pool, which today stands at more than $1.85 trillion. It is this incredible statistic which puts Australia well ahead of the world in terms of size of population and in terms of our national savings. We have somewhere around the fifth largest funds under management in the world because of our national savings pool, which is a direct outcome, a direct result, of the superannuation guarantee that exists in this country. Governments should always be enhancing that and growing that, and ensuring that people are not only paid their proper superannuation entitlements but paid on time. Employers should endeavour to always be vigilant around paying the Superannuation Guarantee because it is an important part of people's retirement savings and income, and their financial security in retirement. The changes that are before us are non-controversial and Labor supports them. I commend them to the House.

Craig Laundy (Reid, Liberal Party) Share this | Link to this | Hansard source

Before I begin in earnest, I would like to attach myself to the end statements from the member for Oxley about the importance of employers paying superannuation. As someone that prior to being in this place has paid more than I care to imagine into the accounts of people's superannuation over the last 23 years from work in my father's business, seeing many of my staff retire from our business and live on their savings afterwards, I cannot agree more, but I will say more about that in a minute.

On the night that we won the election the Prime Minister uttered those now famous words:

… I declare Australia is under new management and is once more open for business.

While that means to a lot of people immediately new business, what it means to me as a prior existing business operator in this country is getting out of the way of existing business too. It is to the Prime Minister's credit that he has sought to keep this in his portfolio.

I note today that we are talking about the Treasury Legislation Amendment (Repeal Day) Bill 2014, and I want to applaud the Treasurer and the Parliamentary Secretary to the Treasurer, the member for Moncrieff, who have taken up the challenge in this set of measures. It is not just the Prime Minister; it is that the Prime Minister took it in his portfolio and put in charge the member for Kooyong, Parliamentary Secretary to the Prime Minister, to drive this agenda. And I am privileged that not long after being elected, the member for Kooyong made contact with me, and some other colleagues who will talk shortly on this bill, and asked if I would give him a hand in the great state of New South Wales given my background. I of course jumped at the opportunity. Over the last 12 months, one of the great things for me has been to work with the member for Kooyong in liaising with other ministers' portfolios in an effort to find ways that we can get out of the way of businesses.

Why is it so important? You have heard since May, discussion always gravitates in budgets to the expense side of our national profit and loss statement. At the moment we are about to have the MYEFO, in which I believe we will find that the discussion starts to move to the revenue side of the profit and loss statement as we come under pressure.

But one of the things that we do not realise, in my humble opinion, is that as government we are not just regulators and we are not just legislators. We are ultimately depending upon the company structure or the ownership structure of every business that operates in Australia irrespective of size. We are a 'shareholder', and the more we can do, irrespective of ministerial portfolio, to get out of their way—and I mean get out of the expense side of their profit and loss statement—the more money will flow to their bottom line. Why is that important? Firstly, because they make more brass, and secondly, so do we as government. That is where we are battling. And that is the part of this deregulation agenda and narrative that this government, I do not believe, have expressed strongly enough to this point. It is not just about making life simpler for business—yes, that is important; it is about enabling them to increase their bottom line, their profit. Why? Because we go for the ride. And, at a time when revenue is short and vulnerable, the more we can do this, the better we will be. It will allow us to focus less on the expense side of our national profit and loss statement in our budget and focus on where we can better spend our money.

But I draw your attention back to the legislation in front of us, and I note that this bill forms part of our whole commitment. The measures contained in this bill improve and simplify the operation of laws relating to taxation, superannuation and shareholdings in certain financial sector companies. The bill contains a number of measures: it repeals the payslip reporting provisions in the superannuation law that would have increased the regulatory burden on employers beyond that currently imposed under the Fair Work Act legislation; it simplifies the taxation laws by removing inoperative provisions, consolidating duplicated provisions and moving longstanding regulations into the primary law; it reduces the regulatory burden on the associates of individuals seeking to obtain a shareholding of more than 15 per cent in certain financial sector companies; and it rewrites the definition of 'Australia' into a single location in the new tax law, for use across all tax laws in a simple and coherent form.

In terms of employer reporting of superannuation contributions, this government is providing certainty for employers—that they do not need to be preparing for significant changes to the software that generates their payslips in respect of superannuation reporting. The government will repeal duplicative provisions from the superannuation law that allow for regulations to be created, prescribing additional information to be included on employee payslips on superannuation contributions. Labor had intended that these regulations would be made, specifying that employers had to report on payslips the amount of superannuation contributions and the date on which the employer expects to pay them. However, Labor never made the regulations. This measure will not affect the information that employees currently receive on superannuation contributions on their payslip.

Under the Fair Work Act, employers are already required to at least report details of employee superannuation entitlements that accrue during the pay period on an employee's payslip. If employers were required to report actual contributions and payment dates, they would need to invest in major upgrades in their software—once again, a large expense on the expense side of their profit and loss statement, decreasing their profitability. The benefit for employees on this move would be marginal.

Most employers pay their superannuation. Even if reporting actual superannuation contributions on payslips were mandated, employers who did not comply with their superannuation requirements would be unlikely to disclose this on their payslips. Also, employees may not take regular notice of what is reported on their payslips. I note that 70 per cent of employees who do not receive their superannuation entitlement from their employer do not make a complaint to the Australian Taxation Office until after they have left the employer. This is a real shame. This may be because they do not want to jeopardise their jobs, and changing the information on superannuation contributions required to be reported on payslips is unlikely to change that. The ATO investigates every complaint received about unpaid super. Their risk analysis work allows the ATO to target actions against high-risk industries and high-risk employers. Employees can now also typically check online via their superannuation fund whether their employer is making regular superannuation contributions, without having to wait for an annual statement.

The consolidation and repeal of tax provisions measure in this act simplifies the taxation laws by consolidating duplicated taxation administration provisions contained in various taxation acts into a single location in a single act. It also repeals spent or redundant taxation laws, such as the older harsh penalty regimes, and moves longstanding regulations into primary law. One such item in this bill has to do with the commissioner's power to obtain information. Currently, if a taxpayer wants to know what information the commissioner has the power to obtain, they need to refer to over 10 different acts. As a result of these amendments, a taxpayer will now only have to refer to schedule 1 of the Taxation Administration Act 1953.

The current tax law is complex, difficult to understand and frequently costly to comply with. For example, the current provisions dealing with tax file numbers and investment income reports provided by investment bodies to the Commissioner of Taxation are overly prescriptive and difficult to comply with. They are not sufficiently flexible to allow the commissioner to continue to pursue further ways of reducing compliance costs. Rewriting the tax file number and investment income reporting will increase the Commissioner of Taxation's flexibility to facilitate modern reporting methods, which should reduce compliance costs for investment bodies.

Overall, the changes will result in a material reduction in the size of the taxation laws, with one or two sections replacing in excess of 50 existing provisions. Removing inoperative provisions, consolidating duplicated provisions and moving longstanding regulations into primary law does not alter any of the current tax policies. However, it does make the tax law easier to use and easier to comply with. Tidying up our tax laws in line with good legislative practices is an important part of the care and maintenance of our tax system.

With reference to shareholding approvals in certain financial sector companies, the government in this measure removes an unnecessary burden on the associates of a person—for example, a person's partner, relatives or related companies—who is seeking approval for a shareholding of greater than 15 per cent in certain financial sector companies, such as banks and insurance companies.    Currently, when a person is seeking a shareholding of more than 15 per cent of a financial sector company, they must seek approval from the Treasurer for the shareholding. The associates of the person must also seek approval from the Treasurer for the shareholding, as the Financial Sector (Shareholdings) Act 1998 deems the shareholding of the associate to be the same as that of the person seeking more than 15 per cent of the shareholding. This approval requirement applies to an associate even where the associate has no actual shareholding in the company. This measure removes the technical legislative trap that imposes an unnecessary regulatory burden. The changes in this bill do not compromise the examination of a shareholder's controlling interest. Associates with a shareholding are still required to be considered as part of the main applicant's shareholding to determine if they need to seek approval from the Treasurer for that shareholding.

There is the measure to rewrite the definition of 'Australia'. I don't know about you, member for Bass, but, quite frankly, I found this one to be a little bit bizarre; but it is there. This measure rewrites the definition of 'Australia' into a single location. Who would have thought it? If you want to get something complicated, get government involved in it. They can do it every time—make no bones about it. This allows it to be used across all tax laws in a simple and coherent form. Finally, we have got Australia sorted, it would seem—at least in the realm of the tax world. This measures addresses the problem that the current definition of 'Australia' for taxation purposes is complex, overly detailed, and expressed differently in different parts of the taxation laws, despite the fact that the laws are intended to achieve a simple and largely equivalent result.

Currently, if an individual working on an oil platform near Australia wanted to determine whether or not they had to pay Australian income tax, they would be required to navigate through the myriad provisions in up to 13 different Commonwealth acts. I refer to my earlier point: if you want to make something complicated, get government involved. To do away with the complex and ad hoc nature of the existing definition, the amendments codify and consolidate in one place a definition of Australia for most tax purposes. Rewriting the tax laws, on average, has reduced the size of the provisions being rewritten by two-thirds. This assists taxpayers to better understand and comply with the laws, reducing their compliance costs. This takes another step towards achieving a single income tax assessment for Australia.

Mr Deputy Speaker, I refer to the commencement of this speech—when there was actually a different Deputy Speaker in the chair—where I stated that the narrative of this government from night one has been that Australia under our governance will be open for business. Whilst many immediately come up with the thought that that is about new business, it is also about what is and will always be the engine room of this economy—small- and medium-sized enterprises. They employ over 70 per cent of the people in this country today.

The best thing that any government can do—and I note that the Prime Minister plans to take this to COAG as a major reform item; and I mentioned earlier my experience in family business pre this place—is to get out of the way of business. This must be an agenda driven through all levels of government—through local government, state government and federal government. Why? Because by working together and getting out of the way of business, getting out of the expense side of every profit and loss of every business in this country, irrespective of size, it will allow that company to maximise their bottom line. The sooner we as a government work out that we are not just legislators, we are not just regulators, and we make that quantum leap to understanding that we are business partners, the better business will be, the better our budget will be and the better our country will be, not only for us—we are mere custodians of this land—but, more importantly, for our children and our grandchildren. I commend the bill to the House.

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

I wonder if any of those on the other side of the House could answer the following question: between this government's red-tape repeal day No. 1 and red-tape repeal day No. 2, how many new regulations did this government pass into law? The answer is 690. While they were crowing about a bonfire of regulations, this government was passing an average of three to four regulations every day. So much for their hatred of regulation—even on the weekends, they did not stop. No weekend day went by that they did not manage to churn out an average of three or four regulations. That, frankly, speaks to the stunt that red-tape repeal day is.

Good governments are always about cleaning up the statute books, making them as straightforward as possible and getting rid of typos. Good governments do not crow about a red-tape repeal day—it is like having a special 'I came to work and had a cup of tea' day. The minister at the table is saying, 'Now there is an idea.' Perhaps that is what we will see from red-tape repeal day No. 3.

When Labor was in government we repealed over 16,000 redundant acts, regulations and legislative instruments. We changed thousands of pieces of bad punctuation and typographical errors in the statutes, but we did not feel the need to publicly pat ourselves on the back for that. We thought that was merely the engine room work of government. This is a government, though, that thinks that it ought to be particularly proud of its 39 individual amendments, changing the term 'electronic mail' to 'email'; of its several hundred amendments adjusting spelling, grammar and punctuation; and of the repeal of such noted business obstacles as the Dried Fruit Export Charges Act 1927, the Nitrous Fertiliser Subsidy Act 1969 and the Lighthouses Act 1949. Indeed, the way they keep on going we can expect a headland speech from this government on the repeal of the 1949 Lighthouses Act.

The inane nature of so many of these amendments explains why the government, in the case of its first red-tape repeal day exercise, did not bother to bring forward the Omnibus Repeal Bill to the Senate until a few weeks before the second red-tape repeal day. These are hardly the actions of a government which is champing at the bit to reduce regulatory burden for Australians.

As Senator Ludwig has recently discovered, red-tape repeal stunts under this government are not free. Across agencies the government has set up teams to hunt out typographical errors, to root out the term 'electronic mail' wherever it might exist, to abolish regulations which are troubling no-one. The cost of that exercise in the case of Treasury is $2.1 million a year, while the industry and social security departments are costing around $700,000. This bonfire of the regulations is in fact a bonfire of the vanities, and Australians are paying the cost. Australians are paying millions of dollars for this government's war on bad punctuation.

When the government is not getting rid of trivial typographical errors, it is using its red-tape repeal stunts as a way of hiding measures which hurt ordinary Australians. So red-tape repeal day No. 1 involved attempting to gut Labor's Future of Financial Advice consumer protection reforms—reforms put in place in the wake of the devastating collapses of Storm Financial and Trio in order to prevent Australians from losing their life savings. You could tell who benefited and who lost from this by the shiny shoes lining up to defend the government while organisations like Choice and National Seniors were saying that taking away consumer protections on financial advice would be a bad idea. The Australian people managed to see off the attempt to gut consumer protections and to remove those financial advice protections. I pay tribute to those brave senators who stood up to knock off the government's removal of consumer protections.

The government is also using its red-tape repeal stunt as a way of killing off the Australian Charities and Not-for-profit Commission. The commission is one of those rare regulators that receive strong support from the sector it regulates. Four out of five Australian charities supported the charities commission before this government came to office and—after a year of campaigning in which minister Andrews with his forceful advocacy hit every TV and radio station in the country to argue for the repeal of the charities commission—after that ferocious PR campaign from one of the government's most charismatic ministers, what share of Australian charities do you think still supports the commission? Deputy Speaker, I am afraid it is still four in five; and it is only about one in 20 who supports the government's plan to give charities regulation back to the tax office.

Why would you take charities regulation from a bespoke agency, which is handling it well at an economical cost, and give it to the tax office, which is not well set up to monitor charities? The charities commission is good for charities, transparency and Australians wanting to protect themselves against door-to-door scammers. You can go to www.acnc.gov.au to simply check whether a charity is legitimate or whether the person at your door is trying to line their own pocket.

The real problem with red-tape repeal day is that its reforms are either trivial or take Australia backwards. As the member for Reid has noted of schedule 4 to this bill, it is indeed 'bizarre': unifying the definition of Australia for tax purposes does not seem to be a measure which governments ought to be patting themselves on the back about. Schedule 2 makes mechanical uncontroversial amendments to the Taxation Administration Act 1953 to consolidate duplicated provisions, repeal redundant laws and move longstanding regulations into primary law. That is all unobjectionable stuff, while the measures relating to superannuation are supported by this side of the House—naturally, because Labor has the great superannuation legacy of which we are enormously proud.

This is a government which needs to the focus less on trivia and more on substance; less on unfair measures and more on fair measures that are in the interests of all Australians. We need to know what the future of the $7 GP co-payment is—whether it has been trashed or whether it has just been moved to the witness protection program, whether the government still intends to sneak it in or whether it is indeed an ex-parrot.

This is a government that has gone from bad to worse. It is a government that does not just have barnacles on the ship but has a fundamentally rotten hull. This government needs to focus on the Australian values of fairness and egalitarianism rather than governing for the very few at the expense of the many.

Debate adjourned.