Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

The Senate is considering amendments (1) and (2) on sheet 7618 moved by Senator Wang and amendment (1) on sheet 7650 moved by Senator Carr to Senator Wang's amendment (2).

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

Before question time I was asking the minister what impact the retrospective nature of this bill would have on companies and, in particular, about the issue of companies that seek pre-approvals of their work, which of course is standard practice. I was making the point that in the cases of companies like CSL strategic investment decisions have already been taken based on the advice received. So I would ask the minister: how many firms have received advanced approval for R&D spends in 2015-16 from AusIndustry?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Actually, it is not technically an approval, because you only qualify for relevant incentives once relevant expenditure has occurred, consistent with the requirements in the legislation. What relevant businesses are required to do is preregister the activity that they might want to make a claim in relation to. That is all.

I note that Senator Carr does not accept responsibility at all, even though he was a minister in the Gillard and Rudd governments, which put this measure on the table and which had it as part of their pre-election costings in the lead-up to the last election. He does not accept any responsibility for the fact that this is a measure which was announced in 2013-14 in Labor's last budget, with a starting date of 1 July 2013. We have delayed the starting date by one year, to 1 July 2014, in recognition of the fact that delays caused by Labor against the implementation of their own budget measure have made that necessary. The practical effect is that this will only impact on companies lodging tax returns after 1 July 2015. It is a measure which was announced in 2013. It will not impact on businesses until after 1 July 2015, which is very much prospective. There cannot be any doubt that relevant businesses in the marketplace had very good notice of the government's intentions in relation to this particular change.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

The fact is that businesses cannot have good notice of the government's intention, because this is an entirely separate matter. Senator Wang, despite the fact that you have written these amendments and despite the fact that they are, in effect, your amendments, they have never, ever been announced as government policy. So how can you possibly say that companies had notice of these proposals? These are entirely separate matters from those that were considered before the Senate committee. These are new measures. You have effectively sought to fundamentally change the nature of this bill and this proposal. You make broad assumptions and broad assertions as to the equivalence of these measures. The evidence has not been produced that that is the case. Not one scrap of evidence has been put forward as to the nature of these changes in terms of their similarity to previous government announcements. This is despite the fact that, for all intents and purposes, these are now government amendments.

The government has effectively written these amendments. We have not heard from the proponents—in name—of these. We have not heard a word about it. What we do know is that they were prepared in Treasury for a senator in this place, which you have all confirmed in these matters before a briefing and before the committee, and you have confirmed those propositions in this chamber. I would ask you, Minister: where is the officer from AusIndustry to advise you on this question? Which of these officers here is from AusIndustry?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Let's be very clear. The government's preference is to implement and to legislate the measure as introduced, which is Labor's measure. And if Senator Carr prefers Labor's measure, which is to remove the additional tax incentives for R&D for businesses generating more than $20 billion in assessable income per year—if that is his preference—tell us now, and the government will be joining with Labor to pass Labor's budget measure. Now, if Labor is not prepared to do this, then, quite frankly, the shadow minister should get out of the Senate's way and let the Senate deal with this legislation the way the Senate wants to deal with it.

The government accepts that we do not have the numbers in this chamber, and the government accepts that we are not able to get our preferred methodology through the Senate. What we have done is accept a request that was made by the crossbench for some adjustments, and I have explained on the record, ad nauseam now, how those changes will impact. And it is absolutely right to say that the fiscal impact, the beneficial impact on the budget bottom line, will be broadly similar. The number of companies impacted will be broadly similar. There will be some differences, because there is an additional fairness protection putting businesses generating most of their profits in Australia on an equal footing with businesses generating some of their profits in Australia but more profits overseas—put them on an equal footing. We think that is fair. We have accepted it. It is not our amendment; it is the Palmer United Party amendment. But the government is prepared to accept it. But if the Labor Party is telling us that they prefer their original budget saving, we are all ears. We are quite happy to deal with it very quickly. If Senator Carr is telling us now that he likes the budget saving that former Prime Minister Gillard and former Treasurer Swan put forward, as part of a government that he was a minister in, then let's do it.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

I will ask again—and I take it, given that you have not been able to tell me that there is an AusIndustry officer here: how many firms received advance approval for R&D spends in 2015-16 from AusIndustry, who will now be adversely affected by these measures?

The minister shakes his head. You refuse to answer? Or you do not know? Are you confessing to your profound ignorance yet again? Once again, your demonstrate your contempt for this chamber. You simply do not know the answer. That is the truth of the matter. You have not had the relevant officers here to be able to advise you. I can understand that a minister does not necessarily follow every element of the administration of this issue. But you should at least have the relevant officers here to tell you how many occasions a company has been given pre-approval, which is now being effectively rescinded by your unilateral actions to introduce measures that are effectively government sponsored measures, without notice. This is an application of retrospectivity to the taxation law which on any standard would not be acceptable in any normal circumstances.

The CHAIRMAN: The question is that opposition amendment (1) on sheet 7650 be agreed to.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

The question now is that Palmer United Party amendments (1) and (2) on sheet 7618 revised be agreed to.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am glad that Senator Wang is here, because it would be good for him to answer some questions about his own amendment, which he has not spoken on at all. He has moved it but has not been here for the debate at all. I have put some questions to the minister that he has refused to answer, so I now put those questions to Senator Wang since it is his amendment. Number 1: the University of New South Wales has indicated in its submission that it will see a substantial reduction in its research effort if this legislation is to pass and that in fact 30 per cent of its research effort currently relies on what the university gets in relation to this particular provision on research and development. I would like to ask Senator Wang: what consultation have you had with universities around the country as to the impact of this legislation on their research effort? I can ask through you, Mr Chairman—

The CHAIRMAN: Senator Milne, could you resume your seat.

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

Mr Chairman, I rise on a point of order. I seek clarification from the chair on this issue. The time of the Senate is valuable, and I know of no capacity or precedent for one senator to seek a question of another senator in the chamber.

The CHAIRMAN: It is quite in order, Senator O'Sullivan. There is no point of order.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

It is quite normal practice in the committee state of a bill, if someone raises an amendment and puts it to the Senate, for them to speak to their own amendments, so I am putting this question very clearly.

Universities around the country, in conjunction with institutions like the CSIRO and with small businesses, benefit enormously from large corporations spending money in the research and development area. So I am asking: what consultation has been done with universities around the country, for a start, as to what impact this will have, firstly, on their research effort and, secondly, on CSIRO?

I think this is critical. We are seeing $1.1 billion taken out of research and development, and I think that the person who is moving for this particular change to the way that this would be determined should answer some questions about the consultation on the impact on the universities, since the government will not. We know that the government wrote the amendment for Senator Wang, but nevertheless it is his amendment, and I would like an answer to the question from either the minister or Senator Wang.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Senator Milne, who is clearly trying to keep the filibuster going for a bit longer, is misleading the Senate, because I did answer that question. What I said very clearly is that this measure, which was initiated and banked in Labor's last budget by the previous Gillard Labor government, has been subject to consultation with the most important people of all—that is, the Australian people at the last election. I know that the Greens do not like the result at the last election. I know that the Greens do not like democracy, but that is the system of government that we are operating under here in Australia.

So what has happened here is that the government sought to implement Labor's budget measure, which has broadly the same fiscal impact. Actually, our saving now is slightly less than what the saving would have been if Labor's measure had been implemented. So, to the extent that there is an impact, it is going to be a lesser impact than it would have been under Labor's original proposal. But what we have agreed with Senator Wang and the Palmer United Party, after very constructive engagement, is to make this change in a better way—in a way that is fairer for businesses generating most of their profits in Australia, vis-a-vis those businesses operating in Australia who generate a significant part of their profits in other parts of the world.

The Palmer United Party—Senator Wang in particular—in relation to this legislation has taken a very constructive approach. The Labor Party and the Greens have taken a very destructive approach. I do not understand why the Greens all of a sudden now are shedding crocodile tears when they did not shed crocodile tears when the Labor Party was pursuing this. The impact of this measure now is a lesser impact than it would have been under the Gillard Labor government proposal—the Gillard Labor government, of course, having been a government that enjoyed the confidence and the support of the Australian Greens party.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

We need to correct the record yet again. This is an entirely different proposal, Minister, for which notice has not been given.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The Senate is amending it.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

You have written this amendment. It is your amendment, in effect. But it is an entirely different proposal, and you cannot possibly seek to misrepresent the position in this chamber.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

It is an entirely different proposal. But, regardless, the Greens did not support taking $1.1 billion out of the research and development budget under the last government, and we do not support it under this government. In particular, what we have had from the minister is complete contempt for the Senate. He has been asked a direct question about what consultation he had with the universities. The fact is that there has been none, because all he can come up with is the same rhetoric from the bad government that has been in for so long. The good government that is supposed to have taken its place has not made its way to the Senate, because we are getting the same rubbish: that the Australian people are the people he consulted, not the universities.

You never do that when it comes to any other bit of legislation. You talk about your stakeholders. You go and ask the people who are going to be impacted. The universities are going to be impacted. CSIRO is going to be impacted. Every research institution in the country is going to be impacted by this. You are going to see a lot of research dollars go off overseas. More particularly, the decision to slash the universities and CSIRO, and now to take $1.1 billion out of the research funding, means that you are going to have a lot of small, innovative companies in Australia not having access to research dollars, and universities are going to be undermined in their research efforts, and it is going to be down to you, the Palmer United Party and other people on the crossbench who vote for it.

Mark my words: when AusBiotech and the universities find out what you have done, they are going to be horrified. But I am not surprised, because, as I said earlier, the Vandals have come over the wall. They are going back to the Dark Ages. It is anti-science, anti-research and anti-rationalism. We are going back to intuition, as Senator Cormann said last night in response to why he would not accept my amendment on quarterly payments: it was intuitive. So now we are into intuition and fairytales, because there is no consultation about what is going on in terms of the impact on the universities. I feel really sad, because we will see PhD students and innovative companies done out of research dollars by people who do not know what they are doing, do not know what they have put to the Senate and cannot stand up and actually argue their case.

The CHAIRMAN: The question is that Palmer United Party amendments (1) and (2) on sheet 7618, revised, be agreed to.

The committee divided. [18:09]

(The Chairman—Senator Marshall)

Question agreed to.

Bill, as amended, agreed to.

Bill reported with amendment; report adopted.