Jacinta Collins (Victoria, Australian Labor Party, Shadow Cabinet Secretary) Share this | Hansard source

I rise to support the Tax and Superannuation Laws Amendment (2015 Measures No. 1) Bill 2015. The bill repeals the legislation providing for the First Home Saver Accounts scheme, including the related tax concessions. It amends the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997 to abolish the dependent spouse tax offset; to expand the dependent invalid and carer tax offset by removing the exclusion in relation to spouses previously covered by the dependent spouse tax offset; and to remove an entitlement to the dependent spouse tax offset where it is made available as a component of another tax offset, and replaces that component with a component made up of the dependent invalid and carer tax offset. It will rewrite the notional tax offsets covering children, students and sole parents that are available as components of other tax offsets, and make a number of reforms to modernise the offshore banking scheme regime. It amends the Income Tax Assessment Act 1997 to exempt the Global Infrastructure Hub Ltd from liability to pay income tax on ordinary income and statutory income. It amends the Income Tax Assessment Act 1997 to update the list of specifically listed deductible gift recipients. It implements the third and final element of the investment manager regime reforms.

As I said at the outset, Labor will be supporting this bill. But I want to go into more detail about three of the measures: first home savers accounts, the dependent spouse tax offset and the offshore banking unit changes.

Firstly, with respect to the first home saver accounts, the context of this debate provides an opportunity to consider some of the issues raised within this bill that go to: the cessation of the first home saver accounts scheme and the government's commitment to housing affordability; the abolition of the dependent spouse tax offset, and the government's somewhat inconsistent view on this scheme; and offshore banking units and the government's frankly lacklustre approach to tackling multinational profit shifting.

On the issue of housing affordability, we have seen a great deal of talk from this government, but unfortunately much of that talk has managed to put much of Australia offside. We are familiar with the comments of the Treasurer, Mr Hockey, betraying his lack of concern—and, frankly, his lack of empathy—for those Australians who have good jobs and are struggling to purchase a house in current conditions, especially in our largest capital cities. I remind the Senate of the clear statements from the Secretary to Treasury, John Fraser, who said:

When you look at the housing price bubble evidence, it's unequivocally the case in Sydney.

He could not be more clear. The Governor of the of the Reserve Bank of Australia, Glenn Stevens, said:

What is happening in housing in Sydney I find acutely concerning for a host of reasons …

Going further still, he said:

Yes I am very concerned about Sydney. I think some of what is happening is crazy …

When central bank governors use words like 'crazy', sensible policymakers sit up and take notice. But the only response from the Treasurer to these statements from his chief economic adviser and from the head of the Reserve Bank was to say that Australians should go out and 'get a good job that pays good money'. When the opposition asked the Prime Minister how he would respond to the Treasury secretary's concerns about the housing price bubble, his first thought was the price of his own house. Australians want more than a Prime Minister whose response on housing affordability is simply to talk about his own home.

We need a serious debate about housing affordability. That is why Labor, through work being carried out by shadow Treasurer Mr Bowen and shadow minister for housing Senator McLucas have been engaging with the experts. That is why we have been looking at questions of infill development, making sure that greenfields development is affordable. That is why we believe that urban public transport really does matter. It is why we are deeply proud that the Rudd and Gillard governments invested more in urban public transport than every other federal government, going back to Federation, put together. Where you have serious investment in urban public transport, you are able to have those medium-density developments which foster housing affordability. All this government has done on housing affordability is abolish the first home saver accounts and blame the states—the government's plan for housing affordability so far is to abolish the first home saver account.

Another part of this bill scraps the dependent spouse tax offset. Labor in office phased back the dependent spouse tax offset, initially restricting its operation to those born before 1972 and then, in a further measure, restricting its operation to those born before 1952. It is important to note that those decisions had an impact on workforce participation because those born in the cohorts to which I have referred were of prime working age. The change in this bill is not one which can be defended in terms of labour force participation, because those affected—born before 1952—are of course aged 63 and over.

It is timely to go back to statements made by the coalition when Labor made the decision to phase back the dependent spouse tax offset. In a speech on 23 November 2012, Mr Hockey described Labor's decision to restrict the dependent spouse tax offset as a 'tax grab'—the now Treasurer referred to phasing it back as a 'tax grab'—yet in his own budget he has now brought forward the complete repeal of this measure. The inconsistency here is laughable. It is hard to see how this is consistent with statements such as that from the Prime Minister in August 2013:

Taxes will always be lower under a Coalition government.

He also said:

… there will be no overall increase in the tax burden whatsoever.

No wonder people question the integrity there. If you look at the government's own budget papers, it is absolutely clear that the tax-to-GDP ratio in this year's budget is higher than in any year under Labor.

In this bill, there are some tentative steps to address the issue of multinational profit shifting. When the coalition were in opposition, they voted against Labor's sensible measures to get multinationals to pay their fair share; they voted against transparency measures; and, when they came to office, they refused to follow through on enacting Labor's multinational tax package, effectively giving $1.1 billion back to multinationals and losing access to that revenue.

Some of the measures that the government failed to proceed with were around offshore banking units. Offshore banking unit changes are timely in ensuring that multinationals cannot take advantage of tax concessions that are not available to small businesses. This government claims to be a friend of small business; but, in order to stand up for small business, it is necessary to stand up to multinationals and make sure they pay their fair share—because an Australia in which multinationals are able to access tax loopholes not available to small businesses is an Australia without a level playing field. Labor's multinational tax package, which would raise $7 billion over a decade, is a pro-small-business measure because it acts to level that playing field. The measures on offshore banking units in the bill before us raise $41.8 million. That is less than half the amount that would be raised under the package on multinational tax avoidance brought forward by Labor.

Pursuant to the resolution of the Senate on 13 May this year, the provisions of this bill were referred to the Senate Economics Legislation Committee for inquiry and report in time for the bill to be debated this week. The committee received seven submissions dealing with schedules 1 to 3 and 7 of the bill. In addition to recommending passage of the bill, the committee recommended a revised explanatory memorandum be issued to take into account changes to schedule 7, as a result of requests for clarification by stakeholders. I note that a revised explanatory memorandum was issued, dealing with the amendments to schedule 7—which relate to investment manager regime reforms—and that government amendments to schedule 7 were agreed to in the other place.

Labor continues to hold grave concerns about the way in which this government is approaching key challenges in the economy that affect the lives of a majority of Australians, such as the core issue of housing affordability. Our ability to address these challenges is compromised by the government's failure to properly address issues such as multinational profit shifting. By contrast, Labor is taking a methodical approach and has proposed sensible policy alternatives. I urge the government to work more constructively with the opposition on these matters and make them a greater priority. However, with respect to the provisions in this bill, Labor supports these steps so far.