Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

Whilst the Albanese Labor government will tell you that this bill, the Treasury Laws Amendment (2024 Tax and Other Measures No. 1) Bill 2024, will help reduce red tape, there are many of us who suspect or know otherwise. We cannot forget the hypocrisy that Labor has shown when it comes to all things tax.

On 1 July, the Assistant Treasurer and Minister for Financial Services, the member for Whitlam, announced significant new regulations and obligations for tax practitioners, planned to come into effect a month from then, on 1 August. This rushed announcement left many in the tax industry scrambling, fearing failure to comply by the starting date. This is so typical of Labor. They tell you that stakeholders, people with an interest in these matters, have been engaged with and consulted, yet anything such as that is furthest from the truth.

It was yet another example of Labor making the rules for the big end of town as they go along. Huge multinational accounting firms would have had the capacity and resources to make the changes necessary to adhere to these new obligations. I come from a regional area, and the businesses, including tax firms and accountancy practices, in my electorate don't have teams of people such as compliance officers, legal eagles and the like to meet the obligations or certainly to meet the expectation by the government that they would within four weeks adhere to the transformational—I use that word perhaps unwisely—regulations that were being brought in. I say 'unwisely' because, when you get transformational, usually it seems to be or should be a positive thing, and these weren't positive things. These were just more bureaucracy, red tape and onerous impositions being placed on small businesses. We only have to look at the number of small businesses going out the door backwards today, in figures released overnight, to see how badly small business is going under this Labor regime.

Small regional accounting firms, already inundated during tax season, would have had to face an unrealistic timeframe to comply with the new regulations Labor was introducing. Numerous concerns were being raised about these changes, and it was only halfway through July when the Tax Practitioners Board came out with further clarification, stating that guidance materials to assist tax practitioners in upholding the new obligations were yet to come and were expected to be released—wait for this—in September. After considerable uproar and calls by the coalition to withdraw the changes and conduct further consultations, the minister, the member for Whitlam, made a last-minute decision on the day before the changes were due to go into effect to extend start dates to 1 July 2025 for firms with 100 or fewer employees and 1 January 2025 for firms for 101 or more employees. This was a last-minute win for the industry and for common sense, but it was a stark reminder, a chilling reminder if you like, of just how poorly this government consults with industry and with stakeholders. This government in this respect has form.

The 72,000 tax practitioners across Australia deserve clarity, they deserve better engagement from government when changes such as these are introduced. But you see right across the board, with the tax changes that Labor has either made or threatened to put in place—it's not just in financial services; it is, as I said, right across the board. It's in such things as the biosecurity levy—call it a tax; call it what it is—that Labor was going to put on our farmers. This levy was to pay for overseas goods to sit on the same shelves as our local homegrown products, and yet our farmers were going to be asked to pay for the biosecurity of their overseas competitors. What other country in the world would do that? What other country would expect its own farmers to pay for the biosecurity of their overseas competitors? It makes no sense.

Then of course we had that real doozy where the government was going to put an impost on our farmers for the increased land valuation of their farms and these farmers would be expected, even though the land was not for sale, to pay the tax office the incremental increase in the value of their land because their land value had increased. These sorts of things are just nuts, particularly for our farmers. And land prices have generally been going up and up in recent years, and in some cases from a low base.

Take a farmer from the Murrumbidgee Irrigation Area whose holding has increased in price—let's say it's doubled in value. Why should that farmer have to pay an amount to the ATO simply because the value of his or her land has gone up? They've just been hit with an unseasonable frost which has wiped out their grape crop or their grain crop, if they're a grain grower. They've had their annual income just stripped, just wiped out, and yet they're then expected, because their land value has gone up, that they somehow owe the government something, they somehow owe the tax office something because the price of their land has increased. These policies are not well thought through. These are not policies made by people who have a sense and an understanding of regional Australia, of agriculture. Let's not forget that those opposite simply can't be trusted when it comes to tax policy. They simply can't.

Well done to Labor for two surplus budgets, but not well done for the fact those budgets have not been made on the back of any economic rationality or policies. They've been done on the back of the fact that global prices for iron ore, and for coal in particular, are peaking at the moment. They're at record levels. It's nothing to do with the Treasurer's, the member for Rankin's policies. It was on the back of some very hard, diligent work done by the former Treasurer, the former member for Kooyong, that set in place the markers by which this government could then come in on the back of, post pandemic. Once things settled in that regard, once the international borders were reopened, the economy got back in shape and we got record prices for those mining commodities. Then we, of course, have the Greens running around, wanting to shut all mining down, full stop. The member for Griffith throws his head back and sighs loudly, but it's true.

I'm sorry; I've now stirred him into action. Our country once rode on the sheep's back, and wool prices kept our economy going very nicely, thank you very much. In more recent decades, it's been on the back of the hard work, determination and sweat on the brow of our miners. We have a government which is wanting to talk its credibility up in the tax space, through the treasury laws amendment and other measures bill and through other bills. Yet, on the other hand, it has stopped live sheep exports, cruelling that industry which has been going for many many decades and which has been particularly profitable for Western Australian farmers, many of whom know nothing else; that's what they do for a living. So what did the government do? It put more than $100 million on the table in the last budget—as the highest expenditure item for the Labor government in agriculture in the 2024-25 budget—to shut down an industry, to stop doing something and to stop our farmers doing what they do best in the whole world.

In the budget before last under this Labor government, we had a Treasurer who, for the very first time in 25 years, couldn't bring himself to use the word 'infrastructure' and also talked about the things that we 'sell overseas'. I put that in quotes because the things that we sell overseas are—yes—agriculture but primarily the big-ticket items. The big profit-making items at the moment are iron ore and coal. Of course, he can't bring himself to say that because then he doesn't want those Greens in those inner city electorates saying how terrible that is that you've got a Treasurer running around using that four-letter word 'coal'.

After weeks of speculation, Australians still don't know with real clarity if the Prime Minister or the Treasurer will impose broken-promise tax hikes. They do not know that. But I note with interest that there has been a flurry of activity around the Chamber and around the parliament in the past 24 hours. One just suspects—one just gets this little inkling—that there might be an election coming before we know it. It is due before the end of May—we all know that—but you just get the sense that Labor's hurriedly getting the deckchairs in line. Let's hope, for his sake, that the Prime Minister is not like Captain Smith on the Titanic.

Voters out there are concerned. They are concerned because they think back to what it was like pre-May 2022, when a house was more affordable, when going to the supermarket didn't mean that you needed to almost extend the mortgage, when filling up at the petrol station—albeit petrol prices at Wagga Wagga at the moment are the cheapest in the state.

An honourable member interjecting—

They are; it's good. But, generally speaking, fuel prices have been way too high. The cost of living has gone through the roof. People do not feel they are better off now than what they were prior to this government coming in. This government has pushed prices up and up and up. The inflation is on Labor's watch. It's on the member for Rankin's watch.

Challenged in parliament on 8 October, the Treasurer said:

We've made it really clear that our policy is not to knock off negative gearing or the capital gains discount.

Well, we'll believe that when we see it. Does this mean no change? Does it mean some change? What does it actually mean? Does it mean that negative gearing stands to be gutted under Labor, remaining in name only?

Honourable members interjecting—

I hear, 'Hear, hear.' The member for Griffith might actually have a chat to some of his Greens colleagues who own more houses than the average Australian. He might just have a chat to his deputy leader, Senator Faruqi, who recently bulldozed some trees; I think that was at her Port Macquarie property. We talk about hypocrisy. There it is, absolutely writ large. But this is of concern to many Australians who have worked hard, who are property investors, and why shouldn't people be able to invest?

I know that under your communist regime you would love everybody's wealth to be distributed but, in a capitalist country like Australia and a free and fair democracy, people are entitled to earn money and then to spend that money on what they like rather than have to give it to somebody who doesn't want to work, who doesn't want to actually do anything for a living and who then expects a handout to the government.

Let me tell you, the biggest concern whether it is the treasury laws amendment or whether it is any other tax policy is that the Greens never get any say on the Treasury benches of this country because if they did then God help us all. God help those property investors. God help anybody who has any investment or any money tucked away anywhere because the Greens will come for it. Labor could do very well and very nicely, thank you very much, if they put the Greens last on their ballot paper. Take a leaf out of my book. Have a look at any of my how to vote cards in any of the elections I've ever run. The Greens have always been last and will always be last.

Max Chandler-Mather (Griffith, Australian Greens) Share this | Link to this | Hansard source

The Greens support this bill in the House but reserve our position for the bill in the Senate. I would like to speak to a particular schedule of the bill which ensures foreign residents selling property in Australia don't dodge their capital gains tax obligations. While we support this, we would like to note that the second reading speech of the minister, Stephen Jones, indicated:

These changes help to level the playing field between Australian and foreign investors, by ensuring foreign investors selling a real property asset (such as a residential property) are subject to the same overall tax obligations as Australians.

The explanatory memorandum of the bill states:

This measure complements the Government's initiatives to improve housing affordability for Australians.

The government is admitting that if you force foreign investors to actually pay their capital gains tax obligations, this improves housing affordability. Yet the government blatantly refuses to acknowledge that the Greens' call to phase out negative gearing and CGT for Australian investors would improve housing affordability. In fact, it is sort of remarkable that this Labor government is intervening to level the playing field for Australian investors competing with foreign investors but says nothing about all of the attempted first home buyers in this country, who get screwed over every time they go to an auction and face a property investor with tax handouts in their pocket from this Labor government. Because the reality is that, in the middle of one of the worst housing crises we have seen in generations, this Labor government is giving billions of dollars in tax handouts to property investors while single mums choose between feeding their kids or paying their rent. Over the next 10 years Labor will dish out $176 billion in tax handouts through the capital gains tax discount and negative gearing to property investors. This includes property investors with 10, 20, 30, 50 investment properties, who collectively get billions of dollars in tax handouts from this government.

Let's be clear about what these tax handouts do. First of all, they turbocharge house prices. Since John Howard introduced the capital gains tax discount, house prices have surged ahead of wages. People wonder why young people and people struggling to buy houses are so angry and disappointed. It is because there are members in this place, for instance, the Prime Minister, who was able to buy a house in Marrickville in the 1990s for just over $100,000—three to four times the average income. Now, if you tried to buy a house in Marrickville you would be paying between 30 to 40 times the average income. People are not angry that there are members in this place who got that opportunity; people are angry that we are being denied that opportunity, that millions of Australians are being denied that opportunity.

The fact is a young person graduating from university today will graduate with a massive uni debt while a lot of members in this place got their university education for free. When that person goes to try and buy a house, they are locked out of a property market where house prices are turbocharged because property investors get billions of dollars in tax handouts from Labor that drive up house prices and deny millions of renters the chance to buy a home.

How is it fair that, in the middle of this massive housing crisis, the government found it in their heart to say, 'Well, when economic conditions change so does government policy.' They changed the stage 3 tax cuts but still ensured that every politician in this place gets 4½ thousand dollars a year off their tax but at the same time refuse to make any changes to negative gearing or the capital gains discount, the massive tax handouts to property investors that are denying millions of renters the chance to buy a home. Imagine if we phased out those tax handouts. A few things would happen. Even conservative modelling shows that an extra 400,000 renters could buy a home. It would probably be far more. It would stop the massive increases in house prices that are denying millions of renters the chance to ever buy a home. But, crucially, it would free up billions of dollars in revenue that we could put to work building public housing.

I put this question to every member in this place: in a massive housing crisis, amid the talk about needing to build more housing, why is it that we're giving $176 billion in tax handouts to property investors to hoard housing, most of which has already been constructed, when we could put that money towards building hundreds of thousands of good quality homes that we could then rent and sell at prices people can actually afford? I think Labor has really misunderstood the depth of feeling and frustration and deep disappointment in this government. People expect Labor governments to be the ones that reform things that improve people's lives, yet what we've got is a 'Liberal-lite' government that has deeply disappointed millions of people.

I urge Labor members in this place to think about what Gough Whitlam was able to do: provide free university education and establish a federal department that helped coordinate the construction of hundreds of thousands of public homes—real, substantial reforms that improved people's lives. Why is it that the millions of Australians who are right now suffering through one of the worst housing crises we've seen in generations have to put up with worse than tinkering around the edges? The bottom line is this: when you have millions of people giving up on ever being able to buy a home and when you have parents terrified about how their kids will ever be able to buy a home and grandparents terrified about how their grandchildren will ever be able to buy a home, it's incumbent upon this government to take real substantial action to help those millions of people. The first thing they can do is to stop giving property investors billions of dollars in tax handouts to drive up the price of housing and lock out millions of potential first home buyers.

All we're asking for is the same opportunity that people like the Prime Minister got. All we're asking for is the same opportunity that people in the 1980s and 1990s got in this country. We're not asking for much. In a wealthy country like Australia, it seems reasonable to expect that, regardless of your background or the family circumstances you're born into, you have the opportunity to buy an affordable house and build a good life. Are we really saying that, in one of the wealthiest countries in the world, we're just going to accept as normal that millions of people struggle to pay the rent, give up on ever being able to buy a home and often have to choose between feeding their kids or paying the rent? How is that acceptable in a wealthy country like Australia?

It's deeply unacceptable because there are solutions to this: phase out negative gearing and the capital gains tax discount—the tax handouts for property investors denying renters the chance to buy a home; invest the savings in establishing a government owned developer that builds hundreds of thousands of good quality homes that we can sell and rent at prices that people can actually afford; and coordinate national caps on rent increases so you don't cop massive rent increases that deny people the chance to save up to buy a home in the first place. All we're proposing are solutions which have worked in Australia before, which work around the world and which will help millions of people.

I urge Labor to stop picking the side of property investors with 10 or 20 investment properties. By the way, I note that 75 per cent of the Labor caucus and of Labor members in this place own investment properties, and 65 per cent of coalition MPs own investment properties. The reality is that both of those parties don't want to remove any of the tax handouts for property investors or phase any of them out, and they wonder why people are so upset.

Marion Scrymgour (Lingiari, Australian Labor Party) Share this | Link to this | Hansard source

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

Question unresolved.

As it is necessary to resolve this question to enable further questions to be considered in relation to this bill, in accordance with standing order 195 the bill will be returned to the House for further consideration.