Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

Contrary to what Senator Carr is trying to suggest, he is fighting old battles. He continues to run his vendetta against former Prime Minister Julia Gillard and former Treasurer Wayne Swan. Former Prime Minister Julia Gillard and former Treasurer Wayne Swan decided that it was not appropriate for businesses making more than $20 billion in profits a year to get a 133 per cent tax deduction. They thought it would be appropriate for companies in those circumstances to only get a 100 per cent tax deduction for their research and development expenditure.

We have had a lot of rhetoric from Labor in recent times on how we ought to ensure that larger businesses, multinational businesses, pay their fair share of tax, and here we have Senator Carr fighting for a 133 per cent tax deduction for businesses earning more than $20 billion a year, instead of a 100 per cent tax deduction. We do not think that is fair. We do not think that is appropriate. We understand that former Prime Minister Gillard and former Treasurer Wayne Swan shared that view. They actually reflected that view in their last budget. In the 2013-14 budget, that was what they initiated and what they banked by way of savings in the budget.

We have not been able to get the support of Labor for their own savings measure. Senator Carr personally rolled Mr Shorten, who was too weak to stand up to Senator Carr and who was too weak to do the right thing in the national interest—which was what former Prime Minister Gillard and former Treasurer Wayne Swan were prepared to do in relation to this matter. That is why the Labor Party are taking the reckless and irresponsible position they are taking here in this chamber today.

That is also why we have engaged constructively, positively and in good faith with crossbench senators who, like us, want to ensure that tax incentives for research and development are better targeted. That is why we have worked with the Palmer United Party and other crossbench senators to come up with a structure that ensures that the adjustment is fair between those businesses that predominantly generate their profits in Australia and those businesses that perhaps predominantly generate their profits in other parts of the world.

Senator Carr has asked how many businesses will be impacted. The answer is less than 25—less than 25 of the largest businesses operating here in Australia.

What we are actually dealing with—I know the shadow minister went back to some issues that we traversed at length yesterday—are the amendment before the chair, which is Senator Carr's amendment, where he seeks to substitute 1 July 2014 in the Palmer United Party amendment with 1 July 2016. We have to remember that, when Labor initiated and banked this savings measure in the budget, the starting date was 1 July 2013. By the time we went to the election in September 2013, Labor had failed to legislate their own savings which they initiated and banked in their budget. We are now here doing Labor's work for them, with Labor opposing us all the way and playing politics. This amendment is an implicit recognition that what we are trying to do is right, because clearly Senator Carr is working on the basis that this legislation will go through. He just wants to delay the start date by another two years. We have said in good faith, given the delays, that 1 July 2013 is no longer appropriate but 1 July 2014 is because, of course, we are in the 2014-15 financial year.

So the government will oppose the amendment circulated by Senator Carr. We will support the two amendments circulated by Senator Wang on behalf of the Palmer United Party, and we would urge all senators to do the same.