Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Hansard source

I do want to make one comment at the start, which I am sure Senator Conroy would join me in. For Senator Brown to say that this was an overnight consideration to protect vested interests is, quite frankly, an utter insult. In good faith, you came round to me last night and said, ‘Can we defer this overnight so it can be reconsidered and can be looked at?’ For you to come in here today, with the greatest respect, Senator Brown, and accuse the government and the opposition of delaying this overnight to protect vested interests is, quite frankly, a personal slur to us as individuals and to both parties, and I think you should apologise. When this matter could have passed last night, when we had already dealt with three amendments and only had two amendments left, you came up to me and asked whether we were prepared to put this over, when the legislation would have been finished 10 or 15 minutes later. You asked us to put this over and we agreed, in good faith, to do that, to reconsider it and see whether, with consideration overnight, what you were saying was indeed correct. That was done in good faith by the government and by the opposition. To come in here today and say this overnight consideration was to protect vested interests is, quite frankly, bitterly disappointing. It was done in good faith, and quite frankly, Senator Brown, you have abused that good faith today.

I am mindful that in some three of four minutes we are going to have to do something with this, but I do want to place on record, if you like, with some formality, the opposition’s position in relation to this matter and why we will be supporting the government’s bill and opposing the Greens’ amendment. We have, again, considered this overnight. In fact, Senator Brown, we were probably meeting until midnight—I think it was about then when I left one of the shadow minister’s offices last night to make sure you and some other senators in this place who had some concerns about this were comfortable that what we had decided to do originally was still appropriate. After many hours of consideration, not to protect vested interests but to actually accommodate the request that we had from you and other senators, we came to the considered view that our position, which was of course that of when we were in government, has not changed and that we will be supporting the government in this regard.

I want to place on record the policy rationale for the former coalition government’s introduction of this measure and the basis for the coalition’s agreement with the government’s decision to remove schedules 2 to 6 from the Tax Laws Amendment (2008 Measures No. 2) Bill 2008, which was passed last week. Some concern was expressed that it might be possible under these arrangements for an upfront deduction to be made available for a forest that is cut down and sold as timber. Currently, anyone who wants to grow trees for timber can get upfront deductions which are widely available, including to MISs. The carbon sink forest deductions are not available to MISs. Furthermore, in order to get the carbon sink deduction, the taxpayer has to comply with a whole series of elaborate requirements including getting the approval of the Department of Climate Change.

Some senators have also queried what would happen if someone decided to cut down the trees after receiving the up-front deduction. A taxpayer who does that runs the risk of being accused of not having had the requisite carbon sink purpose and therefore logically attracts the interests of the deputy commissioner. But assuming that that person did have the original purpose and the appropriate purpose and then changed their mind and cut down the trees, what has actually been the gain to that person? Let’s say that person invests $100 in these trees and gets a $30 deduction. If they then sell the carbon credits to someone else, they have a contractual obligation to keep the trees in situ, probably for a lengthy period, typically 80-plus years. Let’s assume that, for one reason or another, they cannot sell the credits and decide, as was suggested in the Senate last night, to cut the trees down and plough them back in. In that case they have, effectively, wasted $70 after tax. They started off with a clear paddock and $100 in their pocket. They have spent $100 on the trees and they have got $30 back from the government— (Time expired)

Progress reported.