Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

by leave—I move all the amendments circulated in my name:

(1)    Clause 2, page 3 (table item 15), omit “Schedule 7”, substitute “Schedules 7 and 8”.

(2)    Page 47 (after line 3), at the end of the bill, add:

Schedule 8—Providing tax receipts to individual taxpayers

Income Tax Assessment Act 1936

1 After section 174

Insert:

174A Taxation receipt to be provided with notice of assessment

        (1)    A notice of assessment for an individual under section 174 for the financial year ending 30 June 2011 or any later financial year must be accompanied by a taxation receipt, setting out:

             (a)    a break-down of how the amount of the assessment was spent on different functions in the financial year (calculated by applying the proportion of the Budget expenditure on each function to the amount of the assessment); and

             (b)    the level of Australian Government net debt.

        (2)    A taxation receipt for subsection (1) must, at a minimum, contain the information shown in the following table:

Note:   The amounts specified for the purposes of table items 5 to 9 are to be calculated by reference to the nominal proportion of Budget expenditure constituted by each function.

This amendment provides for the insertion of a new schedule 8, which will provide for tax receipts to individual taxpayers. The coalition, as you would be well aware, went to the election with a full suite of policies to further improve Australia’s system of taxation. We intend to continue our push for fairer, lower and simpler taxes.

One element of a fair tax system is transparency. Australians work hard to pay their taxes. The coalition understands that every dollar collected in individual income tax is a dollar that a hardworking family cannot spend on housing, food, education, health and other cost-of-living expenses. Excessive taxes make it more difficult for individuals and households to support themselves. Excessive taxes reduce the wellbeing of taxpayers. It is individuals who can make the best decisions about how their money should be spent. Having said that, Australians will willingly pay their taxes when they believe and trust that the money will be well and carefully spent by their government. They know there is value to the community as a whole in well-run public services and facilities. They know there are needy people who deserve income support. Taxpayers are willing to do their bit for the public good but there is an implicit agreement with the government. Taxpayers are willing to forego some of their income for the public good but they want to be assured that their money is, indeed, being well and carefully spent. More than that, they have the right to know how their money is spent.

Taxpayers do not have a good appreciation of where the tax they pay is spent by the government. Yes, the information is publicly available in the budget papers but these are not easily accessed or easily understood for that matter. Taxpayers also have a right to know how much the government spends in excess of funds collected from taxes and other sources. That excess spending must be funded through borrowing—and we have seen more and more of that from this government.

Again, information about that is not easily accessed by taxpayers. The difficulty in obtaining and understanding this sort of information leads to a situation where government spending is not subject to as much scrutiny by taxpayers as it should be. As senators in this chamber we understand about the difficulty in scrutinising government spending. We spend weeks, three times a year, going through Senate estimates from nine o’clock in the morning until 11 o’clock at night, and still we cannot get the answers. So how much harder is it for taxpayers to get access to the sort of information that they need to understand how this government is spending their money? The coalition believes the government should make it easier to access this sort of information. The intent of this amendment to the Income Tax Assessment Act 1936 is explicitly to require the Australian Taxation Office to inform individual taxpayers where their tax that was paid in a year has been spent and also to inform individual taxpayers of the total Commonwealth net debt in aggregate and their individual share.

I noted Senator Xenophon’s comments earlier about having concerns about using the net debt figure and the share of net debt, which is essentially the share of each individual taxpayer in the net debt position that is incurred by this government. But we on this side of the chamber believe that net debt is the most appropriate measure to monitor the level of debt that is imposed by this government on behalf of every single Australian. We could have gone for gross debt but there would be an argument that gross debt is not a true reflection. Net debt is the truest reflection of the burden that is carried by every individual taxpayer as a result of the decisions made by this government. That is our judgment and that is why we think that the share carried by each individual taxpayer of the net debt burden imposed on them by the government ought to be transparently declared in a receipt that goes along with the notice of tax assessment that is sent to taxpayers on a yearly basis.

We believe this greater transparency will enhance accountability for government spending and debt. The second amendment puts in place a new requirement for the Australian Taxation Office to accompany the notice of assessment for an individual with a receipt showing how their tax paid has been spent in the financial year for which the tax assessment applies. The dollar amount spent on the key categories of government expenditure would be based on the nominal proportion of budget expenditure constituted by each function.

The amendment also puts in place a new requirement for the Australian Taxation Office to accompany a notice of assessment for an individual with a receipt showing, as I mentioned, the level of Australian government net debt. The amendment specifies the information which is to be included on the individual taxpayer receipt. Specific items to be included at a minimum are the name and tax file number of the taxpayer; the amount of tax paid by the taxpayer; the level of Australian government debt at the end of the financial year and at the end of the previous financial year so people can track how it has been progressing; how much of the taxation revenue raised under the assessment was expended for the welfare function, broken down into age pension entitlements, disability pension entitlements, family benefit entitlements, unemployment and sickness benefit entitlements and other welfare benefit entitlements; how much of the taxation revenue raised under the assessment was expended for health, education, defence, foreign affairs and economic aid, recreation and culture, housing and community services, industry assistance and fuel subsidies, public order, transport and communications and labour and industrial relations; how much of the taxation revenue raised under the assessment was expended in transfers to the states, territories and local government authorities; how much of the taxation revenue raised under the assessment was expended to service public debt interest; and how much of the taxation revenue raised under the assessment was expended for other public services.

The coalition believes this amendment is an important reform in improving taxpayers’ understanding of the budget process and of improving government accountability for its taxing and spending decisions. The coalition believes Australian taxpayers will welcome this amendment as strengthening their agreement with the government that their tax dollars should be spent wisely.

We understand that this government is not in favour of increased transparency or anything that would enable taxpayers to scrutinise the waste and mismanagement perpetrated by this government on the unsuspecting Australian taxpayers. But I certainly commend this amendment to my friends and colleagues on the crossbenches. Greens senators and Senator Fielding and Senator Xenophon, I do hope that you will very carefully consider the beneficial impact of this amendment in facilitating a greater level of scrutiny on government expenditure and as a result, hopefully, a change in behaviour—perhaps some more careful approaches to the spending of hard-earned taxpayers’ dollars into the future. With those few words, I commend the amendments to the Senate.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting on Deregulation) Share this | Link to this | Hansard source

The government will not be supporting the amendments that we are considering in committee on the Tax Laws Amendment (2010 Measures No. 4) Bill 2010. The information that the opposition wants to include on where taxpayers’ money is spent is currently in the public domain and, indeed, Senator Cormann acknowledged this. By and large, I think overwhelmingly the detail contained in the budget papers that are presented to parliament by this government are in the same format and in the same way as those of the government of the Liberal-National Party for almost 12 years. The same level of transparency and accountability in those budget papers is that which reflects the period of the previous government, so there has been a consistency in the approach to this matter under both governments.

There has been reference to Senate estimates committees. I have been in this place now for just over 20 years. I have to say that I have been to a few estimates hearings myself. In almost 12 years in opposition, I asked a few questions—I would hate to think how many if I sat down and added them all up—in the economic and finance areas in the main. From time to time there were questions left unanswered. There was difficulty in achieving answers. I could go into a lot more detail, but I will not on this matter. From time to time it was difficult to obtain answers from ministers at the table under the Liberal-National Party government and from time to time from public servants when they were obeying their political masters, and from time to time that has happened under this government. I have been the representative minister in large parts of the finance and Treasury estimates.

The budget updates will mean that the information on the tax receipt will differ depending on when taxpayers receive their assessment. Do not forget that the amendment would require the circulation of millions of individual pieces of, presumably, hard copy at enormous cost for printing and postage and return to sender, address unknown.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

You are already sending an assessment.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting on Deregulation) Share this | Link to this | Hansard source

Yes, but you want to send more. That is my point. On the one hand, you argue waste and, on the other hand, you want to add to it. That is totally inconsistent. There are budget updates that will mean the information on the tax receipt will differ depending on when taxpayers receive their assessment. Something printed on paper today or just after the budget obviously may not reflect the precise circumstances tomorrow. With the way we are going in this chamber, with the opposition opposing just about everything, the notice going out to taxpayers will be inaccurate. It will not reflect what is in the budget papers because, on current performance, the opposition is opposed to almost everything in the budget. So it is not going to be accurate when it is printed and sent out.

The proposal also does not accurately reflect the significant contributions that other taxes or charges such as business tax make to funding welfare, health, schools, highways, environment projects, consular services or defending our country. I would like to see, if we were going down this path, specific categories covering financial regulation, for example. I could find out where some of my tax dollars go by looking at the APRA and ASIC budget in the budget papers. I think for many people in the community that would be a perfectly valid item of expenditure on this document that the opposition is proposing and I am sure there are lots of other perspectives of budget information. The point is, of course, that you can obtain this information in the public domain if you wish.

I have touched on cost and complexity for the ATO. This is probably the brainchild of the shadow Treasurer, Mr Hockey. I notice he has had a fair bit to say on financial regulation recently, but I would be very cautious about any of Mr Hockey’s adventures into disclosure documentation if I were the opposition. Most people have forgotten, in the fullness of time and history, but Mr Hockey was the master who designed the Financial Services Reform Act, and what a disclosure mess that resulted in—incomprehensible documents on disclosure under the FSR for financial consumers of 50 to 100 pages that no-one could read or understand, including some of the participants in the financial sector, including Mr Hockey. It was one of the most extraordinarily expensive red tape exercises in Australian history. So we should be very cautious about adopting suggestions from the current shadow Treasurer, Mr Hockey, when it comes to disclosure.

Aside from cost and complexity, there would be some legal implications in providing the information in the manner which is suggested. There are other issues, such as if taxpayers were not satisfied with the published allocation—published, I might add, in a fairly unsophisticated format, on a single piece of paper. I do not know how you would get all that on a single piece of paper. It would be pretty small writing, I would think. The writing would be smaller than on the sheet of amendments, in order to get the explanation and all the figures down. I doubt you would get it on a single piece of paper. Putting aside the fact that it would be physically difficult to read, there are significant resource implications. The amendments would also result in an extra document in circulation displaying the tax file numbers of PAYG taxpayers. That raises security concerns. It is not a good idea to have documents with tax file numbers on them circulated in this way. It is important to try and minimise that. I know it has to happen, but it is important to minimise that.

The reality is that there is no policy substance to these amendments. We do not accept that the amendments are appropriate, we do not accept that we are in a set of circumstances where they are necessary, and I would ask the Senate to not support them.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

Since we are living in an age of light and transparency, where everything is so obvious, I just have three questions to ask the minister. He has his two good colleagues sitting beside him, so he should be able to get the answers. Could he tell us: what is our exact gross debt today? What is our net debt? And could he explain to me the difference between the two figures—what we are taking off one to get to the other?

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting on Deregulation) Share this | Link to this | Hansard source

I will have to take that on notice, Senator. Just before you rush in, if it had been question time, Senator Wong would have had the figures in a folder. I am not a representational minister. The officers here do not have those figures. I am happy to take the question on notice. I think we could provide the figures for you tomorrow but, I am sorry, we cannot get them at this hour. If I had the folder in front of me, I could, but I am not the representational minister.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

I must be a freak because I always keep them in the back of my head. Your gross debt today is $172.7 billion. As to your net debt, God only knows. Who would know what it is? You could never deliver us the details to explain. We have had a question on notice for you for some four or five months to try and explain the difference between the two figures and you have never delivered the answer to us. Your debt last week went up by $2.8 billion. I think the Australian people have a right to know that. If we are now living in this wondrous new time of light—the time of removing tinea; the time of getting everything out into the open air—why would you not tell the Australian people exactly what they owe, who they owe it to and what they are spending it on?

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

This government is all talk and no action. We were promised a new era of openness and transparency. We were promised that this government, under the so-called new paradigm, was going to let the sunlight in. Instead, we are still sitting here in a darkened room being fed like mushrooms.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

Living like tinea.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Indeed. Whenever there is an opportunity to put their money where their mouth is and whenever there is an opportunity to demonstrate a genuine commitment to increased transparency, this government fail. They are addicted to spending, addicted to new and increased taxes, addicted to ever-new levels of debt. But when it comes to being accountable to taxpayers about how their money is being spent by the government, the government come up with excuse after excuse as to why it supposedly cannot be done. The minister says, ‘It will have to be really small writing and nobody will be able to read it.’ I actually have a sample here. If the minister wants me to table it for his benefit, it can be done. I see that his advisers have a sample for him. Is this too small for the minister to read? Is this too small for the minister to understand how the government are spending taxpayers’ dollars? It is just an excuse.

All of us receive income tax notices of assessment on a yearly basis. There is a little bit of writing at the top of the piece of paper—I am sure that all of us in this chamber have had the same experience. It is a waste of paper really, because there is hardly any information on it. There are three lines at the top, and all you look at is how much the government has taken off you and how much you might get back because you have paid too much. And that is the end of it. There is a lot of space on that piece of paper—on the back of it in particular. If the government were serious about being open and transparent about the way it is spending taxpayers’ dollars, it could be done at absolutely minimum expense. It is a small expense in relation to the benefit to taxpayers from governments being more cautious and careful in the way they spend taxpayers’ dollars. There would obviously be a significant benefit in having a government that is more accountable about the way taxpayer dollars are spent across the many services of government.

This government incurs more and more debt every day. Of course it does not want to be accountable about that. It wants to keep that hidden. It is so complicated to find that figure, as Senator Joyce has just mentioned to the chamber. It takes members of parliament months to get information out of this government. We are members of parliament; we are supposed to be able to ask questions and get answers. We are supposed to be able to get information from this government, but we are not able to get it. We need a law passed by this parliament which requires the government to be accountable about the way it spends taxpayers’ dollars and about what the net debt position is on a yearly basis. Australians deserve to know how the net debt position that is imposed on them by this government tracks from financial year to financial year. Australian people deserve to know how much they have to pay through their taxes every year to service that debt. People deserve to know how much money has to go into servicing that debt. That is money that cannot be spent on health, education, defence and all of the other important services that are provided by governments.

The reality is: this government does not want people to know. This government has got a lip-service commitment to increase openness and transparency when really this is a very secretive government. This government is more secretive now than it was when Kevin Rudd was the Prime Minister. It was not grand when Mr Rudd was the Prime Minister, but it is worse now. As far as the commitment to openness and transparency is concerned, this government has been going backwards. Ms Gillard conceded that Kevin Rudd had lost his way, but I have got to say that she is on the way backwards when it comes to improving openness and transparency. She is probably so busy dealing with all the bushfires across government that she does not have time to deal with some of these issues. The reality is that it is time that this government started to put its money where its mouth is and supported initiatives like this that will clearly improve the accountability of government with respect to how taxpayers’ money is spent.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

I have another quick question on this age of light. We know that from your gross debt figure you take off an amount known as ‘other’ to come back to your net debt figure. Seeing as we are living in this age of light and you have got your two good assistants beside you: what is the amount that you now have in ‘other’ that is taken off your gross debt figure to get to your net debt figure? Can you please tell me what makes up that figure of ‘other’? The Department of the Treasury refuses to answer my letter that was given to them in Senate estimates almost half a year ago. Can you tell me two things: what is in the figure ‘other’ and what makes up that figure of ‘other’?

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting on Deregulation) Share this | Link to this | Hansard source

Firstly, I would point out that the issues you are asking about are not contained within the legislation we are considering—

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

Senator Joyce interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting on Deregulation) Share this | Link to this | Hansard source

Calm down; wait a moment. Therefore, the advisers I have before me cannot give you advice on that. The advisers here are not privy tonight, although we may be able to do something for you tomorrow, Senator Joyce.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

You are shadow minister for finance, aren’t you?

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting on Deregulation) Share this | Link to this | Hansard source

No, I am not. I know you have trouble with the concept of a shadow minister for finance. I know you have that problem or did have that problem. I am the Minister for Tourism, the Minister Assisting on Deregulation—

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

Assistant Treasurer.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting on Deregulation) Share this | Link to this | Hansard source

No, I am not Assistant Treasurer. I was once, before the last election. My responsibilities have changed. I am now representing, in this chamber, the Assistant Treasurer. But whatever the representational nature of issues in this chamber, Senator, the legislation does not go to the issues you are asking questions about; however—

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

What does?

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting on Deregulation) Share this | Link to this | Hansard source

Just wait until I finish. However, it is relevant to the amendment moved by Senator Cormann. I will accept that. I accept that there is an argument, but I do not agree with it. My officers, as I indicated in answer to your earlier question, do not have those answers here tonight. I think I have got a reasonable reputation for responding and, as I said with respect to the earlier figures, we will obtain them tomorrow. We will provide them as soon as we can. We simply do not have them here tonight.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

It is amazing that you are representing all of these people here tonight and the issue is one of transparency. As Senator Cormann has clearly pointed out, we do not get transparency at all—not at all. The answer to your question is that $72 billion is now nominated in ‘other’. For the life of us on this side, we cannot get any information out of you, even though the due date has passed for that to be given back to us via Treasury.

It just does not matter what we ask; we do not get the answers anymore on this side of the chamber. Seventy two billion dollars worth of ‘other’—how many rats and mice can you stick in a column and nominate as ‘other’? When I was an accountant, if someone stuck more than $1,000 in ‘other items’ you would analyse it, you would pull it to pieces. In auditing, it was always a red rag to a bull. But you in this government have $72 billion in ‘other’ and you will not tell the Australian nation what actually makes up ‘other’. We are asking—Senator Cormann is asking—for a sense of transparency.

I know that it seems mysterious that the Australian people might want a little bit more information than you are currently giving them. And you are here tonight telling us that you are going to give to us tomorrow what we have been asking for from Treasury for four or five months. What is the Labor Party’s problem with transparency? Why don’t you come into the chamber actually knowing your facts? Why don’t you have the people beside you who actually know the absolute basic facts?

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I want to indicate my position in relation to this. I have had an opportunity to speak briefly to Senator Cormann about it. I think some aspects of this have some merit, particularly in relation to gross and net debt and providing a breakdown of where taxpayer dollars go. I think Senator Joyce asked a number of pertinent questions in relation to that. I wonder whether there is some additional complexity in relation to that.

Whilst I will not be supporting these amendments, I will be proposing to amend the motion that the report of the committee be adopted such that the amendments proposed by Senator Cormann be referred to the Senate Economics References Committee to report by 31 March 2011. That way, the practicalities of it and any unintended consequences can be assessed in a relatively timely fashion. I think that might advance the debate in relation to this, because I am working on the assumption that the opposition genuinely wants to have a greater level of transparency and I want to see a process to have it robustly examined.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

We think that this is a pretty straightforward proposition. There is annual tax paid by every individual taxpayer. They receive a notice of assessment which indicates how much tax they have to pay in a particular financial year. There is a budget for that financial year. There is a budget outcome for that financial year. You can divide the amount of money that is spent in particular areas by the share that is payable by each individual taxpayer—as I outlined in my comments on the amendments. You should be able to easily assess the net debt position of the Commonwealth in simple terms by deducting the Commonwealth liabilities from the asset position.

When we were in government we had a negative net debt position because the government assets exceeded government liabilities, but under this government we are in the position of looking at about $94 billion worth of net debt in the course of this financial year and, as Senator Joyce has mentioned, $172 billion or thereabouts of government gross debt now.

These are not very complicated amendments. They can easily be dealt with by the government. The Australian Taxation Office will always advise governments to resist additional scrutiny and resist increased levels of transparency and additional reporting requirements—that is well understood. But we want the Senate to make a decision in relation to these amendments. Should the amendments not be successful, we will welcome any consideration that might be given by the Senate Economics References Committee.

We will continue to pursue this proposal for increased government transparency and we hope that the Senate will support our very sensible recommendation to ensure that every individual taxpayer is provided with a tax receipt with an appropriate level of detail—not an excessive amount—showing how their hard-earned money, which is taken from them by the government in the form of taxes, is being spent by the government. We think that this will ensure that governments spend their dollars more wisely. This is in the context of a federal Labor government which over the last three years has been wasteful, has mismanaged taxpayers’ dollars and has imposed massive levels of new taxes over three budgets—more than $40 billion worth of new taxes. The government has imposed massive levels of new debt—$94 billion of net debt during this financial year—and it wants to take another $50 billion worth of state GST revenue away from the states in its constant effort to cast around for more cash to feed its addiction to wasteful spending. I again commend these amendments to the Senate and I hope they will get the support of the Senate.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

Just one thing, because I am fascinated—there are issues of transparency, and you have really inspired me tonight. We are apparently going to get the answer tomorrow to a question that we asked on notice. We are talking about transparency, they are asking about transparency and they say ‘you’ve got it’, but we gave that question on notice to you, Minister Sherry, at the end of May. You have had six months to explain the $72 billion in ‘other’. You were supposed to reply to that question by the end of July. You never did. It is now November. It is six months after we asked the question and four months after you were supposed to reply, and you never did. You wonder why in this place we would ask a question about transparency and letting the sunlight in, so let us be honest: when you do not want to answer a question, you just do not—you hold the whole place in contempt. It is all very well for you to come in here and say, ‘I’ll answer you tomorrow’, but the point is that for the last four months we have been waiting on your reply, and we have not had one. I do not know whether that is because you do not know the answer or because you do know the answer and just do not want to tell us.

Question put:

That the amendments (Senator Cormann’s) be agreed to.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order! The question is that the bill stand as printed. Those of that opinion please aye; against say no. Senator Cormann?

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I am just seeking clarification from Senator Xenophon. The opposition is of course disappointed that the Senate has voted against greater transparency, but I understood that Senator—

The Temporary Chairman:

I will put the question again. The question is that the bill stand as printed.

Bill agreed to.

Bill reported without amendment.