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.