Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

I move the following second reading amendment circulated in my name:

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 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; and

(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".

We welcome the continuation of the OECD two-pillar solution to multinational tax avoidance, which was started by the coalition and continued by the government. The coalition took extensive action over nine years in government to address multinational tax avoidance.

As the G20 host in 2014, Australia played a leading role in the original OECD/G20 Base Erosion and Profit Shifting project—or the BEPS project, as it's called—which was initiated in 2013 and delivered in 2015. Under the coalition, Australia was an early and vigilant adopter of the OECD/G20 BEPS recommendations. These establish a multilateral approach to prevent tax avoidance and increase tax transparency to tax administrators. Much credit for this should go to the current head of the OECD, Mathias Cormann, who drove this when he was Australia's finance minister and continues to drive it through the OECD. These are very, very important initiatives.

At that time, the coalition government measures included: introducing the diverted profits tax, which limits a company's ability to shift profits out of Australia; introducing the multinational tax avoidance law, which ensures companies do not avoid a taxable presence here in Australia; strengthening the thin capitalisation rules; strengthening transfer pricing rules; doubling the penalties for tax avoidance; and establishing the ATO Tax Avoidance Taskforce.

The taskforce, which was created on 1 July 2016, enforces existing laws and supports the government's new tax avoidance measures. It targets multinational enterprises, large public and private groups and wealthy individuals. From 1 July 2016 to 30 November 2021, the ATO in fact raised $24.2 billion in tax liabilities against these groups, and that generated collections of $17.3 billion. Of the liabilities, $15.3 billion were raised against large public groups and multinationals, and $13.6 billion of the liabilities and $9.5 billion of the collections are attributable to the taskforce.

Our system of taxation, revenue collection, is undermined when people or organisations avoid their tax obligations, and that means others have to pay more. So it's important that enforcement of fair tax rules is done properly and that the rules around profit shifting and multinational taxation are consistent and fair. It is absolutely crucial that we continue to pursue this not just on our own but with like-minded nations, and that's exactly what we are doing through these initiatives, along with our peers across the OECD.

After a glorious 30 minutes of bipartisanship, this is where it ends, because Labor has broken their promises on tax. At the last election Labor said their soul focus when it came to taxation was going to be addressing multinational tax avoidance. Well, we support that, as I have said, but they haven't kept that promise, because they've gone into areas which they didn't tell us about before the election. Even when you look at multinational tax avoidance, they haven't even done that right, because Labor's shambolic handling of the country-by-country reporting issue and changes to thin capitalisation has made the Assistant Treasurer's policy incompetence the stuff of front pages and, indeed, back pages. He's been at both ends of the newspapers with his failures on these all-important issues. The Treasurer has said, 'We have made it very clear we don't have any proposals for tax increases beyond working with other countries to make multinational tax regimes fairer.' Of course, he said that before the election, and, when it comes to Labor, what you say before the election doesn't matter once you've had the election.

Despite this promise before the last election to only increase taxes on multinationals, we've seen that promise well and truly broken. Labor has raised taxes on superannuation, or is seeking to, capturing one in 10 Australians over time. Young Australians earning average wages today will be subjected to this tax, according to Treasury modelling. Labor is really crossing the Rubicon by taxing unrealised capital gains. The whole point about unrealised capital gains, as the member for Wannon knows, is that they are unrealised. So you've got to realise them. If it's a farm or a small business that you're being taxed on, then you've got to realise them. That means you have to sell the farm or sell the small business. This is where Labor wants to go. They don't like small business anyway; you can't unionise small businesses or farms, can you? It's a bit hard. So that's where they're going.

It's an absolute assault on family owned businesses and the incredibly hardworking Australians that are absolutely the backbone of so many of our communities right across this country. But, if you're not in a union or you're not a union official, your voice doesn't count under this government. We've seen that this is really an assault on self-managed super funds. Why should you be allowed to self-manage your super fund when an industry super fund can do it for you? That's the mindset. We on this side of the parliament believe in choice, deeply, and that means you should have the choice as to whether you want to invest in an industry super fund, a market super fund or, indeed, a self-managed super fund. That is a choice of the Australian people and a choice we will always respect.

Thirdly, Labor is increasing taxes on franking credits, banking half a billion in taxes from Australian companies, retirees, super funds and Australian charities by going after franking credits. Again, they promised they wouldn't do it, but it seems all bets are off when you have an election. Who knows what they will say this time around with an election approaching?

Finally—or fourthly; it's probably not finally—Labor has ended small-business tax concessions, decimating the instant asset write-off, which is now at a level well below where it was prior to COVID. Of course, this is hugely important for Australian small businesses and many of our regional and suburban communities. Accelerated depreciation and instant asset write-off have been ways of encouraging small businesses to invest in themselves and also, in the process, invest in creating jobs, creating opportunities and supporting their customers. We know, as regional members on this side, how powerful this policy is, and it's why the Leader of the Opposition, in his extraordinary and very powerful budget in reply speech, announced our policy of re-establishing the instant asset write-off at its previous level of $30,000 and, importantly, making it ongoing so small businesses know that they can invest in those bits of kit that are going to grow their business, allowing them to employ local people and support their customers, and giving them accelerated depreciation on the back end of it. That's a huge incentive to get out there, invest and create jobs for everybody.

Higher taxes will not help in the cost-of-living crisis. Higher taxes will not solve a situation where we have absolutely anaemic economic growth. Of course, we're going backwards in GDP per capita terms, with five quarters where we've seen no progress in GDP per capita. Higher taxes will not solve the collapse we have seen in labour productivity under Labor—over five per cent in just over two years. It's extraordinary—completely and absolutely unprecedented. Inflation is running this economy, not the government, and our economy is shuddering to a halt. Australians are paying 20 per cent more personal tax than when Labor came to power. Prices for working families are up over 18 per cent.

We've just seen some wage data come out today, and we want to see higher real wages for all Australians, but let me tell you the one thing that's absolutely certain about that wage data: it's going up at a slower rate than the cost of living for working families. That is the truth for every Australian. The purchasing power of your pay packet is going backwards. The purchasing power of what's in your bank account is going backwards. That's what inflation does. It is the thief in the night. It is like a mugger. It robs Middle Australia. That's exactly what we're seeing, with real wages for employees—it's employees who earn real wages—having collapsed by nine per cent since Labor came to power and living standards having collapsed by eight per cent. Household savings have collapsed. People are cracking open the piggy bank, working extra hours and cutting back on discretionary spending.

The most important point here is that Australia is at the back of the pack in dealing with these issues. We're seeing interest rates coming down in many other countries, including our peer countries, but not here, because inflation continues to rage. This government has absolutely failed to deal with the homegrown inflation that's in front of it. Instead of dealing with the substantive issues, we've seen the Treasurer, whose only instinct ever is to try to spin it, to tell Australians how good they've got it and to pat himself on the back. We all know that is a failed venture, because a doctor of spin he is but a doctor of economics he is not.

The result has been diabolical for Middle Australia. A family with a typical mortgage is around $35,000 worse off. That family has to find that, and that is not even before tax; it is after-tax income. That's a diabolical task for any family, and I saw in my electorate the pain that is being inflicted on them on a daily basis from the combination of that extraordinary increase in cost of living across everything they're buying, all the services they use as well as the sharp increases in taxes and, of course, the sharp increases in interest rates that are behind the devastating impact on their standard of living.

Changes to these multinational tax arrangements—and we do in principle, subject to the amendments that I have just moved, support them—do not make up for Labor's attacks on aspirational Australians. Changes to multinational tax arrangements in this bill do not make for Labor inaction and failures on homegrown inflation. Changes to multinational tax arrangements in this bill do not make up for Labor's rate rises. Changes to multinational tax arrangements in this bill do not make up for Labor's attacks on hardworking Middle Australians who are trying to get ahead.

Australians deserve a government that is focused on the challenges that Australians are facing today. Whilst we won't oppose this legislation, we do not apologise for continuing to hold the government to account for their broken promises on taxes, their failure to take action on productivity and the living standards it depends on and their failure to make fighting inflation their first, second and third priorities.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Dan Tehan (Wannon, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

The amendment is seconded.

Debate adjourned.