Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Wong. I refer the minister to last week's MYEFO, rushed in immediately ahead of advice that the minerals resource rent tax would deliver zero revenue to government coffers in its first three months of operation. Will the minister advise the Senate who in the business community was consulted by the government when deciding to change company tax payments from quarterly to monthly from January 2014 and on what basis the minister and the Treasurer concluded that such a change would not result in an added financial burden for affected companies?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thought I had answered this question previously, but that may not be the case. This was a budget decision. I have made clear that obviously, as a budget decision, it was not the subject of consultation prior to its announcement. What we have done is ensure that the implementation is staged. My recollection—I do not have the MYEFO document here—is that we will stage it in tranches depending on the turnover, for large businesses from memory from January 2014, as there is an annual staging of entry into the new system depending on company turnover. So I make two points to the senator: no additional tax is being levied. And, if I may make a political point, the only people who are advocating a company tax increase are those opposite with the levy that is proposed by Mr Abbott to be imposed on companies. The point is that there is no additional taxation levied; it is simply a change in the timing of remittance of that taxation. There are obviously implementation issues which will need to be resolved and worked through with the business community, which is why the government has put in place a lengthy lead time for the consultation process.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Minister, did the government or its Treasury officials consult with members of its business tax reform group on this proposal, given that the group was already in place and actively working with the government on tax reform? If they were not consulted, why were they not consulted?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I have already indicated that this was a budget decision. That decision was made, as most budget decisions are—and some of my colleagues may confirm this—on the basis that they are announced on the day of the budget or of the budget update. I can get further information on the Business Tax Working Group process. But, as you know, that was dealing with a different issue. Despite the shadow Treasurer's attempts for a few days to say otherwise—I think he has now backed off because he realised it was unreasonable—despite the fact that there was an assertion that this meant more tax, it is not the case; it is simply a change in the way the tax is paid. Again, it is the Liberal Party—

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

How come you're getting more money?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Senator, I will try and explain to you the difference between quarterly and monthly, and what that does to the timing of payments. I will draw you a little diagram. (Time expired)

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I thank the minister for the explanation that the tax group was not consulted. Minister, is it any wonder that the business and indeed the wider community now have lost total confidence in this government when, as you say, it failed to consult its own business tax reform group on such an important change in tax collection procedures while at the same time it set ground rules to ensure it was bound to fail on measures to negotiate reduced company taxes in Australia?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I would like to know whether there was any consultation with the business community before Mr Abbott announced a company tax hike? Silence. I suspected there would be silence on that. Yes, I am not surprised you are getting up, Senator.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Mr President, a point of order on relevance: my question did not go to Mr Abbott. My question went to the minister and why they failed to consult with the group—

Senator Conroy interjecting—

There seems to be a botfly active in the chamber. It is either that or Senator Conroy. My question went to why this government did not consult with the tax group, which was already in place consulting to it. Would she answer the question.

John Hogg (President) Share this | Link to this | Hansard source

There is no point of order. The minister has 46 seconds remaining. I invite the minister to finish answering the question.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

As I was also saying, the senator might like to be aware that there is one other tax instalment which is collected monthly not quarterly and that of course is the GST. Those opposite are now up in arms about the fact that there is a monthly instalment when in fact that was the design of the tax which they were very proud to have introduced. There are a number of OECD countries which make instalments on a monthly basis. Those are set out in the MYEFO. We have a three-year process of reform to implement this measure. There will be many consultations throughout that time. (Time expired)