Zed Seselja (ACT, Liberal Party, Assistant Minister for Treasury and Finance) Share this | Hansard source

I want to very much thank senators for their contributions and for their support for what is a very, very important bill, the Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018, as I think was so eloquently outlined by Senator Hume and others.

I want to go through a couple of the key elements of the bill before summing up. Schedule 1 of the bill strengthens the integrity of the Multinational Anti-Avoidance Law and ensures that it operates as intended. This amendment will further deliver on what has been a very tough stance from this Liberal-National government against multinational tax avoidance, as demonstrated by the successive measures implemented in recent years to ensure that multinationals pay their fair share of tax in Australia.

Unlike the opposition, the Labor Party, who have talked a big game in opposition on multinational tax avoidance, this is something that we deliver on in government. We deliver on it as a principled position for a number of reasons. We deliver on it because, by having everyone pay their fair share, by ensuring that large multinationals can't profit-shift offshore, by having them pay their fair share, Australian taxpayers—the hardworking men and women who are working hard every day and paying a lot of income tax or those who are building up their small and medium enterprises and paying their fair share of tax—can rely on services to be delivered by the Australian government. The way that we can do that, while growing the economy and putting the budget back into balance, is to have everyone pay their fair share. So, as a matter of principle, we have a stance that says multinationals must pay their fair share. Schedule 1, by strengthening the integrity of the Multinational Anti-Avoidance Law, ensures that we get fairness in the system.

If you look at the budget measures we have undertaken and the approach that the coalition has taken to economic policy, you see that these are always built on those pillars. We do everything we can to grow the economy. We grow the economy by lowering taxes, whether that's by getting rid of things like the mining tax and the carbon tax, whether that's by lowering people's electricity bills, whether that is by lowering income tax for hardworking taxpayers, whether that's by lowering taxes for small business so they can grow their business and employ more Australians, or whether that's by getting rid of red tape—as we have done every year since we came into government. All of that has helped Australians who are having a go to do better and has helped our economy to thrive.

We've put in place measures, such as our free trade agreements, which deliver more economic activity and more jobs into the Australian economy and help get spending under control. We have shown in every budget, successive budgets, that, by limiting the growth of spending, we will be able to get the budget back into balance next year—all the while cutting taxes for small business; all the while cutting taxes for low- and middle-income earners; and all the while being able to deliver record investment in really important areas such as defence, health, education, infrastructure and a range of other very important areas.

This has been our economic approach, and getting multinationals to pay their fair share is part of those integrity measures. We've had integrity measures in other parts of the system. We've moved a record number of people from welfare into work. We've had those people who have been rorting the welfare system taken off the welfare system so that those who need it because they're doing it tough for various reasons have access to it and so we can deliver on things like the NDIS. This has been at the heart of what we've done. We don't just talk about it; we get it done.

Schedule 2 of this bill amends the Income Tax Assessment Act 1997 to give effect to the government's 2017-18 budget announcement. It will improve integrity and better target the small-business capital gains tax concessions. Again, making sure there's integrity in the system ensures that we can continue to deliver tax relief for small businesses, as opposed to the Labor Party who wants to up taxes for small and medium enterprises. It allows us to deliver that income tax relief and it allows us to deliver the services that Australians expect and Australians want their government to be able to deliver.

These amendments are designed to ensure that the concessions can only be accessed in relation to assets used in a small business or ownership interests in a small business. Why is this important? It's because the amendments introduce a test on the size of the business being disposed of to prevent inappropriate access to the concessions for assets unrelated to a small business, so it brings them in. This ensures that these important concessions continue to benefit those who need them most—and that's hardworking small businesses. Any number of measures that we put in place to support small business is because we know that these are hardworking Australians and these are hardworking men and women who put their capital on the line, who often put their house on the line, who often work 50-, 60- or 70-hour weeks, and who often have a family business where everyone contributes. At every turn, the Liberal-National government seeks to make things a little bit easier for those hardworking men and women. It says to them, 'We'll lower your tax burden, we'll lower the amount of red tape, we'll work hard to lower your energy bills, we'll build a framework of a strong economy through free trade and other things, and we'll control our own spending so that you're not burdened with excessive taxes down the track and so we can deliver the infrastructure and the services that are necessary for you to thrive.'

The government is committed to establishing Australia as a leading global financial technology, or fintech, hub. This is a major area of potential growth. Schedule 3 of this bill builds on this work. It builds on the work of our government to ensure that we have the right policy settings in place to foster innovation. This has been a key focus of our government, and one of the reasons it's a key focus of our government is because we know that Australians have some of the best examples of innovation, invention, and research and development in the world. But, because of some of the challenges in getting capital, we haven't always been able to fully exploit and build on those great innovations and that great entrepreneurship that exists and is in the DNA of the Australian people. We see it as a partnership and a way of assisting businesses and entrepreneurs who come up with those amazing ideas to then be able to get the capital that they need so that they can then employ people, grow their businesses, have profitable businesses, reinvest in those businesses, employ more people, grow our economy and provide the opportunities that we want to see for Australian men and women as they come into the workforce and as they stay in the workforce.

Schedule 3, to that end, amends the early-stage venture capital limited partnership, the venture capital limited partnership and tax incentives for early-stage investor regimes of the Income Tax Assessment Act 1997. What this does is it clarifies that early-stage venture capital limited partnerships and venture capital limited partnerships can invest in innovative fintech businesses, removes ambiguity from the tax law and provides certainty for venture capital investors.

As I said earlier, we've got extraordinary entrepreneurs. If you go to our universities and many of our small businesses, and if you meet our scientists who are coming up with the research and development, the ideas and the great technological breakthroughs, we invest so much. We've got a great record as a government in things like the Medical Research Future Fund. That is one area of extraordinary innovation that will see jobs grow and, just as importantly, will save lives. It will see Australians living longer and living healthier lives through medical research. We think there is a major economic advantage in that as well as people live longer lives and as we develop these products and sell them to the world.

We've got these extraordinary scientists and innovators, and we want to bring more capital behind them so that they can indeed have the opportunity to develop those products. Instead of people having to go offshore in order to fully develop their ideas and their products, as has unfortunately happened in many cases in the past, we want them developing here. We're seeing more of that. We're seeing that with collaborations in partnerships between our research organisations and our universities. We do it with things like CRCs. One of the innovations we have brought in is the CRCPs, which is a great addition to the cooperative research centres. The cooperative research centres are a way of bringing all those entities together. It is world-leading. The CRCPs are shorter-term and more focused. The industry response—I had responsibility in that area—has been very positive. We're able to do things again in a slightly quicker and a more innovative way, and do some of those shorter-term smaller projects which can still have absolutely substantial benefits.

As I said, this will clarify those early stage venture capital limited partnerships—and venture capital limited partnerships can invest in innovative fintech businesses—and it remove ambiguity from the tax law. That is important for attracting that investment. We want to see that investment continuing to come from Australian investors and also from foreign investors in some of our great ideas and backing our entrepreneurs.

This again demonstrates the government's continuing commitment to promoting a culture of entrepreneurship and risk-taking in Australia, and it will help ensure that innovative Australian businesses have access to the capital and expertise that they need to grow and succeed. It works hand in hand with those other aspects of policy that I have outlined. When you allow capital to come in, when you encourage entrepreneurship, when you have those industry partnerships, when you lower taxes for small and medium businesses, when you allow free trade to thrive and when you cut red tape and encourage Australians to get ahead and employ more people, then these things come together in a very positive way—as we are seeing with the record number of jobs that we have created. We very much believe in this.

Going back to the 2017-18 budget, the government announced, on another aspect of this bill, that it would expand the role of the Defence Force Ombudsman to make recommendations for reparation payments. All complains of abuse in Defence made to the Defence Force Ombudsman will now include an assessment for a reparation payment. Previously, similar reparation payments were administered by the Defence Abuse Response Taskforce, which concluded on 31 August 2016. The reparation payments made by the Defence Abuse Response Taskforce were specifically exempt from income tax. This is an important change, and it builds on some of this good work. It's another way of honouring the amazing work that our Defence Force personnel do.

We are committed not just to the defence of our nation but to the health and welfare of our Defence personnel. I think we have learnt a lot in recent years about where we have let them down from time to time as a nation. We have learnt where we can do better. We always strive to make sure that we look after the welfare of those men and women who put their lives on the line for the sake of our nation and our freedom.

In addition, schedule 4 of this bill responds to the government's expansion of the existing functions of the Defence Force Ombudsman. Similar reparation payments were previously administered by the Defence Abuse Response Taskforce, which concluded on 31 August 2016. Reparation payments made by the task force, as I said, were specifically exempt from income tax.

Schedule 4 ensures that the new reparation payments recommended by the Defence Force Ombudsman are exempt from income tax. Reparation payments are not intended to be compensation, and complainants will not be required to release the Commonwealth from liability. These amendments ensure the recipients get the full benefit of such a payment free from the obligation to pay income tax. For all of these reasons, all of those schedules come together for some important reforms. I've outlined a number of the reasons. They build on a number of earlier reforms that the Liberal-National government have been proud to deliver, and I look forward to the hopeful passage of this bill thorough the Senate. I commend this bill to the Senate.

Question agreed to.

Bill read a second time.