Rachel Siewert (WA, Australian Greens) Share this | Hansard source

The Greens are very disappointed with key elements of the Tax Laws Amendment (2009 Measures No. 1) Bill 2009 and, unlike Senator Coonan, will be seeking to amend it. We share the opposition’s concerns around the timing of this bill and believe that it has unintended consequences. I also add that I think the opposition’s approach to the impacts that this bill may have on the community is very different to the approach it is taking with the seniors card. I find the approaches quite contradictory, and I will get to that in a minute.

In terms of the positive aspects of this bill, we can indicate our support for schedules 1 and 2. The Greens support the amendment in this bill to reduce tax payments for small business as a way of assisting them with the current financial crisis. We also welcome the administrative reforms to unclaimed superannuation schemes. The Greens will continue to support government regulation of business as a necessary part of our community, but we realise that, where businesses are regulated, it is a responsibility of the government to ensure that the compliance costs associated with it are minimised wherever possible.

The Greens welcome the objective of schedule 3 of this bill. We welcome efforts to better target government income support and tax offsets to people who genuinely need them. Consistent with the long-term Greens policy, this bill prevents the removal of some of the middle-class welfare payments made under the Howard government era and will prevent those on high incomes with the capacity to actively manage their non-cash income—for example, by salary sacrificing into superannuation or through receiving fringe benefits—to get their taxable income below relevant thresholds.

Under this bill people will no longer be able to sacrifice a significant amount of money into superannuation in order to receive government support. This is a bill that is long overdue. Likewise, it is appropriate that tax deductions associated with investment losses and fringe benefits do not provide a loophole for otherwise middle- or high-income earners to access the social safety net. The Greens also welcome the objective of the amendments to provide consistent treatment of a person’s income across income support programs and tax concessions. We agree that it is unfair that some people are able to access those benefits not because they need them but because they happen to be in a job that allows them to access fringe benefits and salary sacrificing arrangements which artificially decrease their income for assessment purposes.

That is the positive side of these amendments. However, from the Greens perspective, there are some overwhelmingly negative aspects in this schedule, and that is the impact on low-income earners in the community sector and more generally. There is a sting in the tail in this bill. There is the potential for some of these amendments to adversely affect some low-income workers—that is, those who earn less than $60,000 per annum who rely on salary sacrificing and fringe benefits to boost their income. This is an issue for all low-income earners but is of particular concern to people employed in the community and public hospital sectors, where fringe benefits and salary sacrifice super as part of a broader salary package is routinely used to boost incomes in order to attract staff. It is obvious that the impact of this will depend on individual circumstances and the actual eligibility thresholds for each of the affected payments or offsets amended. However, by examining most thresholds for payments in the bill, it is obvious that in many cases an expansion in the definition of ‘income’ will result in the loss of eligibility or a loss of some payment for low-income people.

For the community sector and the public hospital sector this is an unacceptable impact. These are people who do difficult jobs with relatively low pay and rely on these kinds of top-ups on already meagre salaries. Until the government agrees to increase their salaries to fair and real levels, fringe benefits and salary sacrificing will remain an important tool in attracting skilled people to these sectors. The effect of these amendments will be to remove access to income support or tax offsets that these low-income people can access to make their cost of living just a little bit easier to meet. These tests will also likely increase the rate of payment made under the Medicare levy SFSS and HELP schemes and effectively increase the tax paid by low-income earners and those with student debts less.

This issue came up last year. Those who were in the chamber when we were discussing this last year will remember the fierce debate we had around fringe benefits tax. The Greens are still seeking to increase the cap on fringe benefits from $30,000 to $40,000. This is an absolutely critical issue for the not-for-profit sector. The only way they can attract staff is by offering attractive packages through salary packages and fringe benefits tax arrangements. Not-for-profit organisations already have difficulties in attracting staff. This is going to make it that much harder. The government last year, following through from an amendment that the Howard government had put in place, was about to change the reportable fringe benefits for the purposes of family tax benefits. Fortunately, it realised that that was going to have quite a deep impact and did not proceed with that amendment. That then raised the issue around the cap on tax-free fringe benefits, and we had the debate about it in the chamber at the time. Everyone recognised and acknowledged that wages and conditions within the community sector were substantially below those offered in both the public and the private sectors.

This is an essential element that not-for-profits can use in order to pay and attract staff. It is well recognised that staff in not-for-profit organisations work for substantially less money than their counterparts in the private sector. The changes contained in schedule 3 will have an adverse impact on this sector. This will add to the pressure these groups are already under now because of the increased demand for their services in these economic times. The sector is also about to lose a significant amount of money through the government’s decision on employment reforms and employment services. Just last night the Minister for Housing, Tanya Plibersek, said that the government would be delivering more of the housing program through not-for-profit organisations and community housing organisations—a move I strongly support, I might add. They are not going to be able to do it if they do not have a sector, and they are not going to have a sector if they keep treating that sector in the manner in which they are treating it at the moment.

Senator Stephens is a very strong advocate for the not-for-profit sector. On the one hand, you have got the government saying positive things and trying to do positive things in terms of social inclusion and, on the other hand, you have got them passing policies that are having a negative impact on the sector. Come on, guys—get your approach right or at least be consistent. Do you or do you not support them? The government and Senator Stephens will tell you that these organisations were sent a copy of a discussion paper and that the bill went out for comment. It was a short period for comment, and I do not know how they undertook that consultation, but I can tell you that, with my phoning around, there are now very significant concerns in the sector about these issues. They have not been properly consulted. This is not a part of broader reform. The broader reform is going on separately to this.

The Greens ask the coalition to reconsider their approach to this, given that not two hours ago we had Senator Scullion in this place arguing that we could not make changes to the seniors health care card because it had not been considered in the context of the Harmer and Henry reviews, we did not know the numbers, we did not know the impact it was going to have and we did not know how many people it was going to impact. Those very same arguments can and should be used for these amendments. We do not know the number of people this will impact on, we do not know what effect it will have, we are doing it outside of the Henry and Harmer reviews and, most importantly, this is affecting low-income workers.

The difference with the health care card was that we were talking about people on higher incomes. These are people whom we are trying to keep in a sector that is under pressure, who are low paid and who are sacrificing a good deal of their life for community service and community work. We are now going to impact on them again. Admittedly, the impact will probably not be as bad as it would have been with the changes that the government did not proceed with last year—they have racked that down a little bit—but this is still going to have a significant impact. I cannot understand a government that is proceeding with these amendments when they do not know what impact it is going to have and when it is vital that we put resources and support into our community sector, not take it away. The Greens begged the government to take out schedule 3 so that we could look at it properly and have a proper discussion with community organisations, but they would not. The Greens begged the coalition to do the same thing, and I beg them again.

I will be submitting an amendment shortly to take this schedule out so that we can consider it at a later date and so that we can make a decision in full knowledge, because we are not now. Their arguments regarding these two bills are completely inconsistent and contradictory. On one bill they will vote down a measure because they do not know the impact, yet on this bill they will support it even though they do not know the impact. It is hitting at the most vulnerable low-income sector again. It is not the proper way to govern. It is not the proper way to make decisions on important issues like this, for a sector that is under the pump all the time and even more so now. Their services are being called on as never before and they are turning away thousands and thousands of people.

On top of that, the government has just made a decision that it will take away employment services from the majority of not-for-profit organisations operating in this country that use funds to subsidise and cross-subsidise other social and community services. This week, this sector is copping a double whammy, on top of the call on their services that is increasing exponentially. They are constantly reporting they are unable to meet need. There is a huge unmet need out there. Where is the compassion that we are supposed to be showing as a nation in helping the not-for-profit sector and helping our most vulnerable? I really urge the government to take schedule 3 off the table and to bring it back when it has got it right, when it has properly consulted and when it can put measures in to protect those workers that are on a low income across the board but particularly those who are working for the community sector. This will put further pressure on not only the community sector but the public hospital sector in attracting the staff that they need.

The Greens, at this stage, are urging the government to take schedule 3 out of this bill. If the government does not agree to that, we will be seeking to move amendments in order to protect low-income workers. We do not particularly want to do that, because we would prefer to deal with this in a more comprehensive manner. But we feel that this issue is so urgent that we really need to amend the legislation if the government is not prepared to reconsider schedule 3.