Bill Heffernan (NSW, Liberal Party) Share this | Link to this | Hansard source

I would like to talk today about something which should concern all governments of all persuasions in the Western World and all their constituents. Can I just start by outlining what we see for the future: by 2050, there will be nine billion people on the planet, and 50 per cent of them will be poor for water. Ninety-seven per cent of the world's water is actually sea water; three per cent of the world's water is fresh water, and two-thirds of that is tied up permanently in snow and ice. Two-thirds of the world's population by 2050 will be living in the Asian area; 30 per cent of their productive capacity will be gone; about 1.6 billion people on the planet will possibly be displaced. That is the challenge for the planet.

The challenge for the human race of course is the low intake of antibiotics in the food chain—and bacterial resistance—the great challenge for feeding humanity. We do not have a solution to the global food task. By 2070, barring human catastrophe—there is always that caveat—there will be 12 billion people on the planet. China itself will have close to two billion people and will have to have an organisational concept to feed half their people from someone else's resources.

The next great challenge for the Western world and the world to which we have become accustomed in its sovereignty is capturing the revenue base, which is really where I want to go today. I have to say that we are not even noticing the cost that we are going through and the revenue leakage we are going through. We are taking it for granted that 'she'll be right', whether it is paying for the ABC or paying for whatever governments expect—schools and public hospitals—although there are some exceptions to that. Senator Leyonhjelm does not think we should have public schools and public hospitals. I happen to think we should. We are not even noticing revenue leakage.

Last year the World Bank estimated we missed out on about $3 trillion involved in revenue leakage in the G20, which is mainly the Group of Eight nations. And most of that is through derivative swaps and transfer pricing. The derivate swap market was about $700 trillion. The shadow banking market is 69 per cent of China's banking. And you wonder why they don’t put the currency on the market! These are serious issues which the electorate needs to be informed of, because what we should be doing—whoever is in government should be doing it—is modelling where we have come from in the last 20 years and modelling where we are going in 20 years time if we do not change the law to catch up with the times in capturing our revenue base.

The Foreign Acquisitions and Takeovers Act 1975 is completely out of date. It does not deal with how we capture revenue from sovereign investors. It needs to be redefined globally. Why does the Future Fund—and I noticed Peter Costello the other day saying 'Oops! Why would the Future Fund want 14 and now 17 companies in tax havens?' It is because they do not want to pay tax where countries still charge sovereign investors tax. Australia does not. A passive sovereign investor coming into Australia does not pay tax. A passive investor investing in investment and production in Australia, if they declare that production for humanitarian purposes, gets charitable status, for God's sake! So we have some serious issues.

Ninety per cent of the world's economy is involved in G20 and the OECD countries. As a group of nations we should solve this, unless we want to be the generation that redefined sovereignty. I went to a bitcoin inquiry the other day and was just amazed that the people promoting it could not tell me whether it was defined as a commodity or a currency—and that included people on the phone from the US and the UK and some bright young people from Australia. Yet it is trading. To me, it aids and abets revenue leakage, so there is tax avoidance.

I absolutely think that we have to come to terms with this. Last year the turnover of the shadow banking world was about $120 trillion, which is 1¼ times the global GDP. These are challenges that most people do not want to talk about. I noticed the US corporate world responded the other day—and congratulations to the government on their G20 approach and putting revenue leakage on the agenda—by saying, 'we don't think it's such a crime to have all this revenue leakage going overseas because they are creating jobs here'. That is alright if you do not want to have schools and hospitals and they leave you in the gutter if you get sick. But the US last year estimated they missed out on between $650 billion and $800 billion in tax that was avoided. In fact the largest anti tax-avoidance case last financial year was with an Australian identified company.

So I think it is time that we in the parliament took a responsible stand. There is an inquiry—I think there ought to be a select committee that looks at this—to model where we have come from and the things we have taken for granted. These people are not breaking the law; the law is out of date. We need to model where are we going to finish up.

If you want to finish up like southern Europe—or Greece or somewhere where they do not collect their taxes and they have no enforcement regime. The euro is the common currency—and southern Europe goes to sleep after lunch and northern Europe goes back to work—and they think the currency should be commonly denominated. These things need to be thought through.

I am concerned about the legal point-scoring that is occurring in Australia with things like whether we should have a $7 Medicare co-payment or not. All of these things are well and good to be debated politically but, if we do not solve the issue of having the revenue to pay for the expectations of the electorate, we are wasting our time.

Madam Acting Deputy President, I seek leave to table a document, which I have notified the government and the opposition about.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Leave granted.

Bill Heffernan (NSW, Liberal Party) Share this | Link to this | Hansard source

Thank you. This document is an article from 21 November 2014 in the Australian Doctor. Lots of people would find it difficult to come to terms with a $7 co-payment; obviously lots of people could pay it. A packet of cigarettes is more, but not everyone smokes and not everyone buys a coffee every day. But there are places we can save money. Besides capturing our revenue base—and this is a serious problem which is going to redefine sovereignty if we do not fix it. There was $3 trillion in tax avoidance globally last year. This article points to where we could save some money:

The Professional Services Review said it was concerned about high-end claimers, including one GP working in a large suburban practice who drew up more than 400 management plans, 400 team care arrangements and then billed for 1,300 reviews in the space of 12 months.

This is where the doctor gets $250 to fill out a little form and send you down the road to have a care plan done for you.

On review of a sample of this practitioners plans, we noted little evidence of input from anyone other than the practice nurse.

I will go further into the article.

In another case investigated by the PSR, a GP generated $600,000 in Medicare billings during his first seven months practising in Australia.

That is $30,000 a week just billing Medicare—I do not how you would see the patients and think you were taking care of them.

We should put the politics aside. If we want to keep Australia the best place in the world to raise a family, to breathe fresh air and to drink clean water, for God's sake, let's get the politics out of the road. Let us not worry about what tomorrow's headline says or what the next election is going to be about. Let's look at what where we are going to be in 15 or 20 years' time as a nation. I do not want to be blamed for living through a period when our sovereignty was redefined because we did not allow the law to catch up with technology. When the present Foreign Acquisitions and Takeovers Act was written in 1975, we were just barely past the telegram era—and a lot of our laws were written when it took six weeks for the Australian cricket team to go to England by ship. We really need to understand that we need to redefine where we are in the world if we are to maintain our sovereignty.

Last year, the World Bank said there was about $1 trillion involved in bribes. You can get a signature on anything you like in Asia, as long as you find the right person to pay the bribe to. And the cost of those bribes—that is, the corruption that followed —was five per cent of global GDP. These are serious issues. It is a given these days that, to compete in the market, the big companies take as a given that they will pay little or no tax.

The average punter and certainly people listening to this—if there is anyone—would not know the derivative swap market. The derivative swap market is a serious deal as is the challenge of coming to terms with the bitcoin market, which will aid and abet tax avoidance, transfer, profits, drug laundering et cetera. So the great challenge for Australia—it does not matter who is in government—is to capture our revenue base. Let's first find out what is going wrong with what we are doing.