Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Refining and Improving Our Tax System) Bill 2023. The coalition will be supporting this bill. The coalition stands for lower taxes, not higher taxes. We believe it's important to have a tax system that encourages people to get out, invest, take risks, work hard and get rewards for it, and that is absolutely central to our core beliefs. But we also recognise that an effective tax system is a requirement for effective government. Australia, when compared to other advanced economies, already collects an awful lot of tax. In the 2021-22 financial year, the Australian government collected $550 billion in tax receipts. As a percentage of GDP, we collect more income tax than most of the G20 economies and almost all of South-East Asia—more income tax, for instance, than South Korea, Singapore, Malaysia and New Zealand.

For the majority of Australians, tax is the main experience of the coercive power of government in their lives. For this reason, discussions about tax go beyond the technicalities and to the very essence of what our country is and what our democracy is, so it's critical that governments keep their promises on tax. Governments should always keep their promises on tax, but that's something we haven't seen, sadly, from this government. It's critical that governments get their tax settings right, and that means ensuring our tax system is simpler and fairer for all individuals and families; making sure our tax system facilitates rather than blocks economic activity, investment, work and risk taking for small businesses and sole traders, as well as big employers and heavy industry; and making sure that our tax system provides certainty and predictability for our retirees, for investors and for our not-for-profit sector.

Fundamentally, it's critical that governments never lose sight of who pays our taxes. There is no magic money tree that the ATO can shake as it pleases; there are just Australians and the businesses that employ them. Tax is paid by individuals, hardworking families, small businesses, employers, service providers, manufacturers, producers and consumers. But on this side of the chamber we know that we can't tax our way to prosperity. In contrast, when those opposite talk about tax reform, we know what they mean: they mean higher taxes. On this side of the chamber we know that tax reform is not simply increasing taxes. We should talk about how to make the tax system fairer, simpler, to better support aspiration and enterprise in this country for everyday Australians. That's what we need to focus on when we talk about tax.

When it comes to this bill, and this has been brought forward by the government, the good news is that we do see some of the coalition's advice being followed. That should come as no surprise because not one, not two, but every measure in this bill is an initiative of the former coalition government—from double taxation treaties to equalising tax treatment across entities, streamlining charities and administration, and cutting red tape for small business and brewers. This is a bill that extends the coalition's proud record of cutting and lowering the cost of doing business and streamlining our tax system. This is something we haven't seen enough of yet, from those opposite, but we are very pleased that this has come forward. In fact, the last bill of this nature sat in limbo for over six months and just passed only this morning.

Small businesses have been forced to wait, by this government, for certainty around tax incentives that they were promised back in May last year. This is despite the fact that the government is expediting all sorts of interventions in our economy or cultural priorities. The DGR status, for instance, for the Voice was rushed through. Unprecedented market intervention in our gas market was rushed through. Re-regulation of the labour market was rushed through. But the tax incentives for small businesses?—delay, delay and more delay. So we see where the priorities of those opposite lie. They are very clear. But at least this bill is something we can get behind and support.

Sadly, while this bill has many measures we can support, it doesn't make up for Labor's broken promises on franking credits, on superannuation taxes and on taxing unrealised capital gains. That's really opening up a whole new area of taxation—a can of worms, a Pandora's box—which, I am sure, Labor are looking forward to getting themselves stuck into.

Many small businesses will be captured by Labor's superannuation changes and their attack on unrealised capital gains. Many retirees will lose out on Labor's broken promise on franking credits. It's a full-blown assault on franking credits—something they promised they wouldn't do, prior to entering government, but now they're there, it's clear that it's happening.

Labor's broken promise on superannuation taxes mean that, with soaring cost-of-living pressures, Australians will be worse off as they look forward to their retirements. This is not just a broken promise but it undermines the confidence that we have in our superannuation system, our superannuation system that relies so heavily on certainty of regulatory settings, of taxation settings.

Australians have placed an enormous trust in politicians, in this place, that they are not making changes that would breach the trust of the Australian people on money that is put away for very long periods of time—potentially, for over 40 years. Despite promises of no changes to superannuation, before the election, this government is now proposing to double taxes on superannuation on one in 10 Australians. That's their numbers. By the time people retire it could well easily be more.

The government is stopping companies from offering franking credits to Australian investors, to super funds and to charities. It's important to remember that franking credits are not there for the benefit of the company; they're there to benefit the individual, the investor, the person who takes the risks investing in that company.

This tax bill cannot be debated in isolation from the fact that this government wants to raise taxes on super, on franking credits and, for the first time, it wants to tax unrealised capital gains, and no doubt many other things are on the taxation agenda of this Labor government.

Despite claiming that fewer than 80,000 Australians will be effected by the superannuation tax, independent research has shown that by retirement age more than 500,000 Australians will be hit by this tax. That's not refining tax, that's not improving tax, that's just making our system more complicated and casting a wider net. It's capturing more and more people into the superannuation taxation system.

What's even worse is that the government can't explain how this system will work. The truth is, we haven't had any real explanation of these policies, simply announcements. The Assistant Treasurer has no capacity to explain these policies. They certainly don't refine and improve our tax system. They don't make taxes lower or simpler or fairer. The Prime Minister said they'll only impact one in 200 people, while the Minister for Finance said they will impact one in 10. If the government can't explain it, how can Australians understand it? Australians are right to be wondering what Labor will do next. Small-business owners were shocked to see that this was buried deep in last year's budget, when those opposite were ending the extension of the instant asset write-off. This is a really big deal for small businesses. If that's the government's version of refining the tax system, we should be deeply worried.

The substantive issue at the heart of this bill is to refine and improve our tax system, but it boils down to one key question: how can Australians trust Labor when they say one thing before an election and, the moment they're elected, do exactly the opposite? Labor's promises on tax were very, very clear. There were to be no changes to franking credits. There were to be no changes to superannuation taxes. They've broken those promises alongside promises on cheaper mortgages and $275 off your energy bills. Remember the promise of lower inflation? All those promises have gone. Indeed, I think it was Minister Burke who said prior to the election that Australians would feel the change in government in their bank accounts. Well, they certainly do but for all the wrong reasons.

While the coalition will support this bill, we call on the government to stop breaking its promises on taxes and energy and to support Australian small-business owners with more red tape reduction, more incentives to grow their businesses and more support to resolve labour market shortages before this cost-of-living crisis gets completely out of control.