Bill Heffernan (NSW, Liberal Party) Share this | Hansard source

I have not brought any notes, but I can speak because I have a full understanding of the implications of what has been a serious oversight by this parliament with the Tax Laws Amendment (2008 Measures No. 1) Bill 2008. We need to fix it. I presume that the government will not support the Greens amendments, but I am hopeful that the government will come up with their own solution, because we need a solution. This legislation was switched from the No. 1 tax bill to the No. 2 tax bill and it was non-controversial. It is seriously, seriously flawed.

The fact is that this bill for carbon sinks will open up, for all those adventurous people and likeable lads in the community, a rort. With great respect to anyone who thinks that it is not the case—I am happy to have a private conversation with them—this bill is absolutely and fundamentally flawed. It allows a person for the first four years, till 2010 or 2011—I have not got notes before me—to cop a tax deduction up-front which is predominantly for the planting of trees for a carbon sink. There is a whole lot of technical advice around that. That would be fair enough if it had a covenant and some sort of easement security around it, but what will happen—and I am a farmer and I concede that we are all likeable rogues in the bush; as Kerry Packer said, why pay more tax than you need to?—is that this bill will become a fundamental tax rort.

I concede that the government, in its generosity to me and others, has looked at this and has got advice from the department. I am hopeful that, not necessarily tonight but in the future, the government will solve this issue. But what will happen in practice is that a farmer—take me, for instance—will lease a paddock, as long as it is 0.2 of a hectare or greater in size, to someone who will come along and say: ‘I’ll plant trees there for a carbon sink and I’ll cop the tax deduction up-front. I’ve got a big income this year. I’m not going to go for the write-off over 14 years.’ Then the next year I might have a heart attack and sell the farm. The next bloke that comes along might say: ‘Who was the silly bugger that planted all those bloody trees down on that beautiful food-producing flat? I could be growing corn or something there.’ He could then plough them in. And there is nothing in the legislation to prevent that. There is absolutely nothing in the legislation to prevent that, and I defy anyone to stand up in this chamber and say there is.

Also, as probably has been pointed out, if you are a likeable lad you can plant this carbon sink and, if you have some sort of natural disaster—it does not rain and the trees all die—you still get the tax deduction. You have got no trees. You could have a fire and cop the insurance money plus the tax deduction and have nothing to show for the environment. Surely to God this parliament in its wisdom will fix this very seriously flawed legislation.