Luke Howarth (Petrie, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 and the Capital Works (Build to Rent Misuse Tax) Bill 2024. These bills highlight several of Labor's major failures: a failure to meaningfully address surging rental prices and falling first homeownership across the country, a failure to provide regulatory certainty in the financial services sector, a failure to keep their promises of only to increase taxes on multinationals and a failure to support small and family businesses.

Schedule 1 will create generous incentives to institutional investors to develop build-to-rent housing. Labor originally promised to add to rental supply through these reforms in the 2023 budget, announced more than a year ago—over 12 months ago. This legislation has faced significant delays, as well as criticism from the sector it is intended to support. Under Labor, rental prices around the country continue to surge. If you look at the last 12 months, from 2023 April to now, according to the ABS, rents have risen by almost eight per cent on average, nationally. Weekly rents are more expensive than they were in mid-2023 by $53. The national median rental price now exceeds $620 per week, with the regions experiencing the steepest increases. In the last two years, renters around the country have seen their rents go up considerably.

In Australia, build-to-rent only makes up 0.2 per cent of the housing market, and build-to-rent developments have a long lead time. It won't address the serious rental supply shortages experienced across the country right now. Fifty-five per cent of the units proposed are planned for Melbourne, and the bulk of the rental pipeline will be owned and managed by foreign investors. With this build-to-rent policy, Labor has prioritised corporate home ownership over individual ownership.

Unlike the Albanese government, the coalition remain steadfast in our commitment to continue to be the party of home ownership and first home buyers, and we have a proven track record to back this up. We want Australians owning homes. Under Labor, the percentage of first home buyers entering the market has dropped. The ABS stated in 2020 that it was 23 per cent, declining to 19 per cent in 2023 under Labor. What is it now? It's probably lower again.

The Property Council of Australia has warned that 'the detail of the legislation doesn't live up to the government's intended goals' and that 'this legislation must be fixed'. The Real Estate Institute of Australia says 'build-to-rent will take time to come online and our shortages are now'. Finding somewhere to live is getting harder under this Labor-Greens government, and this significantly delayed and ineffective build-to-rent proposal isn't going to make it easier. The coalition will oppose schedule 1 and move amendments to remove it from this bill.

Schedule 2 of this bill imposes new regulation on buy-now pay-later providers. We understand that the buy-now pay-later sector is generally supportive of these reforms. There are some outstanding issues that have not been addressed in the drafting, and we expect that these will be considered and dealt with through the Senate's committee inquiry on this bill.

Buy-now pay-later products play an important role in helping people manage their finances and smooth out expenses. It has provided a good alternative to higher-cost forms of credit like payday loans and credit cards. The friction and costs of new regulation must be balanced with ensuring that these products remain accessible and consumers have choice. We agree that regulation to protect consumers must be scalable and proportionate, reflecting the different risk profile of these products. However, there have been significant delays in drafting this legislation and failures to address some concerns raised by buy-now pay-later providers.

The Assistant Treasurer promised these reforms would be introduced into parliament last year. The settled policy was announced by the Assistant Treasurer over 12 months ago. As we have seen time and time again under the Assistant Treasurer, he overpromises and underdelivers. These delays have caused regulatory uncertainty for the buy-now pay-later sector and put vulnerable consumers at risk. Over the last year, we've seen consolidation in the sector, with several providers leaving the market or scaling down their operations. What has happened here reflects a broader trend of delays in key financial services reform and a lack of prioritisation of them by Labor.

Buy now pay later is a success story of homegrown innovation in financial services. It supports over 120,000 Australian jobs. It adds over $19 billion in economic activity each year, and 5.2 million Australians actively choose to use buy-now pay-later products. The average value of a buy-now pay-later transaction is just $132, and most consumer usage is concentrated on lower value purchases. Unfortunately, innovation in financial services is not a priority for the Albanese Labor government. We are unlikely to see under the Albanese Labor government the next Afterpay or the next Zip emerge and succeed in Australia.

Unlike Labor, growing the Australian digital economy and supporting innovation in financial services, such as buy now pay later, was a key priority under the former federal coalition government. The former coalition government had a minister dedicated to supporting these innovative firms to succeed, scale and export internationally. We created a regulatory sandbox, agreed fintech bridges with key trading partners, and funded targeted trade and investment programs. We did a major review of the payments systems and implemented the world-leading consumer data right. These settings provided an environment where our financial technology businesses like Afterpay and Zip could flourish, grow internationally and provide significant value to the Australian economy.

Under Labor, the next wave of innovative firms is struggling to access capital amid the regulatory uncertainty created by the slow, delayed or deprioritised reform processes which have become the norm. This is despite a ballooning Public Service and a significant allocation of additional resources for the Treasury to develop legislation.

These buy-now pay-later firms are now facing fresh uncertainty. The Assistant Treasurer is now refusing to sign off on expanding the consumer data right to the non-bank lending sector, which includes buy-now pay-later firms. Last August, in his own words, the Assistant Treasurer said, 'Having the consumer data right available in non-bank lending may make it quicker and easier for buy-now pay-later providers to make the checks that will be necessary to comply with the new scalable responsible lending obligations proposed for their industry.' Instead, what's happened? He's left the industry in limbo for the better part of a year. The non-bank lending sector don't know when or even if it will happen. This is just poor prioritisation yet again, and it shows that the government is more about announcements than delivery.

Schedule 4 of this bill is the next stage of Labor's chaotic attempt to implement its misguided multinational tax agenda. These proposals were originally supposed to be introduced to parliament last September, but embarrassingly, again, they were pulled, with last-minute amendments in response to significant stakeholder backlash, including from the United States embassy. At the time, Labor promised to do further work to align the proposed public reporting standards with the well-established European Union framework, but they have come back with a very similar reporting regime that goes much further than the EU and does little to address widespread concerns from the business community. While exemption processes have been included for firms to prevent information being made public, this is only provided on an annual basis.

This is another botched and delayed process that shows that the government do not know how to work with business, they don't know how to manage the economy and they are pursuing the wrong priorities. These proposals have wide application across sectors and risk blowing out the cost of doing business in Australia. And what happens when the cost of doing business goes up? There are fewer jobs and there are higher expenses for Australians and customers. International manufacturers and businesses have already signalled that the impact of this regime will cause them to shift jobs and investment offshore, out of Australia. The business community has no confidence that this government can consult, and no confidence that this government listens, that's for sure.

This country-by-country reporting proposal also won't hide Labor's broken promises on tax. Before the last election, Labor promised only to increase taxes on multinationals. But we've now seen Labor's new doubling of taxes on superannuation balances, capturing one in 10 Australians over time and young Australians earning average wages today. They are taxing unrealised capital gains, which hasn't been done before. All of that wasn't spoken about by the Prime Minister before the last election; indeed it wasn't.

Labor has also increased taxes on franking credits, banking half a billion in taxes from Australian companies, Australian retirees and Australian charities. They've also increased taxes as part of their stage 3 revamp, which they said they wouldn't do. The Prime Minister said before the last election, rock solid, 'My word is my bond; we won't change stage 3.' But then what did he do? He killed the bracket creep that we had in place—30c up to $200,000—and reintroduced a 37 per cent rate for people earning over $135,000. He also brought down the 45 per cent rate to $190,000. The Prime Minister, Mr Albanese, and the Labor government say one thing before an election and then say something completely different. Their actions are completely different once they're in government.

In relation to the instant asset tax write off, schedule 7 of this bill continues Labor's attempts to decimate the instant asset write-off, taking it back to levels not seen for five or six years and depriving 26,500 medium-size businesses of access to accelerated depreciation. How many Australians do you think work in 26,500 medium businesses? 'A lot' is the answer. The instant asset tax write-off would help those businesses every day with their cashflow. I saw it during COVID. I saw businesses in my own electorate that could instantly write-off new equipment.

You know what? A lot of those businesses are in manufacturing, and we've seen manufacturing jobs in this country fall by 10 per cent. Don't believe a word of the Albanese Labor government when they say, 'We want Australian made, and we will bring back manufacturing'. It's all fibs. Ten per cent of jobs have gone in two years. Under their proposals, because they govern for unions, it will only get worse. Labor's proposal would limit the instant asset tax write-off to $20,000. It was unlimited during COVID, but they're winding it all the way back to $20,000. How will that help manufacturers? It won't. It will only provide an additional 12-month extension to the scheme. It should be ongoing—continuous.

We must also remember Labor's existing bill to implement the instant asset tax write-off for the 2023-24 financial year has been stuck in limbo with just days to go before the end of the financial year. Labor failed to prioritise its passage through the parliament and blocked coalition amendments for a bigger tax cut to small and family businesses, which benefits not just those small and family businesses but all the workers in those small and family businesses and their customers. That's because we know that, when small and family businesses have less costs, those costs aren't passed onto consumers in the middle of the cost-of-living crisis that's happened in the last two years since this government was elected. These delays might mean millions of businesses are unable to purchase and install assets in time to claim the instant asset write-off for this financial year. From 1 July, the $20,000 write-off threshold will drop to the default of just $1,000.

How ridiculous. It should be a permanent, ongoing instant asset tax write-off for small and family businesses. The minister should make this an absolute priority. The coalition's position, as outlined in the budget in reply, is to extend the value of assets eligible for the instant asset write-off to up to $30,000, lifting it 50 per cent further than the government wants to and making it permanent. We should absolutely make it permanent. Our position would simplify depreciation for millions of small businesses by cutting red tape, boosting investment in productive assets and lowering business costs and prices. It would provide small businesses with regulatory certainty and, importantly, ensure the government can't leave extending the scheme until the last minute, as it has done this year.

According to the Australian Bureau of Statistics, there are over 2.5 million small businesses across the country. That's wonderful. Millions of small businesses are impacted by Labor's bad decisions on the instant asset tax write-off. That's the issue. This is a government that does not look after small businesses. Australians have lost confidence in the Albanese Labor government. That's not just the small businesses but everyday consumers in my electorate and right around the country. It is failing to stop surging rental prices on top of surging house repayments and gas, electricity and insurance prices. And the government is failing to stop falling first home ownership rates. It is failing to provide regulatory certainty and support innovation in financial services. It's failing to keep its promises on tax and it's failing to support small businesses and families struggling under Labor's cost-of-living crisis.

I move the amendment circulated in my name:

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

"the House notes:

(1) that the former Government consistently delivered lower taxes for small business, families, and implemented more than a dozen measures to combat multinational tax avoidance;

(2) the Government voted eight times against delivering a bigger tax cut to small business in last year's Instant Asset Write Off;

(3) the Government's last multinational tax bill was so badly designed it taxed Australian companies;

(4) that since the election, Australians are paying 20 per cent more income tax and the Government has banked over $60 billion in bracket creep;

(5) that despite promising to only raise taxes on multinationals at the election, the Government has broken promises to raise taxes on superannuation, on unrealised capital gains, on franking credits, personal income tax, and to end small business tax incentives; and

(6) that the Government's housing policy is failing to meet its supply targets and supporting forever renting, not home ownership".

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Debate adjourned.