Steve Fielding (Victoria, Family First Party) Share this | Hansard source

I move amendment (1) on 5838:

(1) Schedule 1, page 4 (after line 3), at the end of Schedule 1, add: 3 Application of PAYG withholding tax rules Division 12 of Schedule 1 of the Taxation Administration Act 1953 does not apply in relation to the foreign earnings of a person that would be exempt from tax but for the amendment made by this Schedule, so that the person’s employer is not required to withhold any amount of those earnings under that Division. [PAYG not to apply to certain foreign earnings]

I will make some general comments before referring directly to the amendment. Firstly, regarding the vote on the second reading of the bill, I would be interested to know whether there may be any conflict of interest for those politicians within the defined benefit scheme through this legislation providing exemptions for them. They voted against Senator Xenophon’s amendment, so that is an important issue they need to consider. During the second reading debate, the Assistant Treasurer referred to defined benefit programs and those people who would get some sort of special treatment. Senator Xenophon’s amendment related to politicians only—not Qantas or any other area but politicians and their superannuation entitlements. The question is whether, when you are voting for a bill, you should declare whether it assists you and therefore constitutes an interest. I will leave that for each senator to consider. Politicians’ superannuation is something the community is definitely concerned about.

The amendment I have just moved will prevent the double withholding of tax for Australians working temporarily overseas. I will give an example of how the bill as it stands would operate. A resident of Australia temporarily working overseas who earns $1,000 per week might be taxed at a rate of 30 per cent in the country they are working in and then taxed at the rate of 30 per cent under Australian law. That money would be taken from their pay and they would be left with a smaller amount to live on. Without this amendment, this person would be effectively taxed at the rate of 60 per cent and take home only $400 in their pay packet each week. Quite clearly that is wrong. They will have to wait 12 months before they can reclaim the money at the end of the financial year. The government will claim that they can avoid this by having their Australian employer seek an exemption from the Australian Taxation Office—but that is the employer, not the employee. It is extra red tape and it will be a burden. We have been contacted by a number of people saying that this is going to cause a significant problem.

This amendment will stop the government from double dipping upfront rather than the reconciliation being done by default at the end. This is a bit of a mess that the government have created. They know it is a problem. It would lead to an outcome that is less than desirable and it is in their hands to fix it, which is what this amendment would do. The government have accepted that there is a problem here; the Senate Economics Legislation Committee, which conducted an inquiry into this bill, also accepted that this double dipping is a problem; yet no-one has presented a solution. It is very hard for the Senate to vote on a flawed bill without seeing a solution. I urge senators to support this amendment.