Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Birmingham, I note that you are only the minister acting in this portfolio at the moment, so there will be elements of this which I understand you may have to check in and get back to us on, and I note that we have only 10 minutes left until the adjournment debate. Perhaps we will not get the opportunity to get to the end of a lot of these matters, and I suspect that Senator Cormann will be dealing with this for a little while longer.

One of the criticisms that has been made is that the Abbott-Turnbull governments committed us to a timetable which sees Australia lag behind most of the OECD and other advanced economies. More than 40 countries will begin exchanging information on individuals in 2017. Is my understanding correct that this legislation does not bring this system into effect until after those countries have already begun reporting?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I can advise Senator Dastyari that I understand his understanding is correct and that the reason relates to the differences in financial year timings between Australia and other jurisdictions—ours, of course, being a July-to-June financial year time frame and other jurisdictions having calendar year time frames.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Our time frame starts in 2018. My understanding is that the financial institutions will be required to report on the high-value accounts held by individuals to the ATO by the middle of 2018 and report high-value accounts held by corporate entities by 2019. There has been no rationale given for delaying the reporting on corporate entity accounts by 12 months. The real question is: why is there one deadline, in the middle of 2018, for individuals and another for high-value accounts held by corporate entities in 2019? I want to flag that this may perhaps form the basis of an amendment—which, being conscious of time, I suspect will not be moved this evening.

The world is moving in a particular direction on this front. We have a situation where 40 like-minded OECD nations will already have begun the process of sharing this type of information, and what worries me is that Australia is going to fall behind. While there have been many disagreements in this chamber about the nature of the bill and amendments to different parts of the bill, I think former Treasurer Joe Hockey and the tax commissioner have done an incredible job on the international stage and played a very important role in making Australia world leaders in some of these areas. Again, that does not mean I think all the legislation has been perfect. The criticism that people like me have made is not that the laws that this government has tried to pass have necessarily been bad or ineffective laws; the criticism has largely been that the laws they passed have not gone far enough—and that really has been where the debate here has gone. The question is: why do you have two separate dates for reporting, one for individuals by the middle of 2018 and another for corporate entities by 2019? Why doesn't this bill bring those two dates together?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

The short answer for Senator Dastyari in terms of the proposal as I understand—

Senator Dastyari interjecting—

I am giving the short answer first! It is a multipronged approach that I am taking and I will do my utmost to assist you in the undertaking that you have here, Senator Dastyari, to move us forward in a constructive manner, but one that takes us, appropriately, to 7.20 pm! The short answer is that the different time frames, I am advised, relate to the OECD agreement that was struck and that the legislation introduced, which provides for the different time frames, is consistent with the terms of those OECD discussions and arose out of that agreement.

Obviously, the government has seen the amendment that you propose to move in that regard during the committee stage of this debate. I am advised that that amendment is similar in form to one that was tabled by the shadow Assistant Treasurer, Dr Leigh, during the debate in the House of Representatives. The government has sought some clarification of the purpose of that amendment, as it was not clear from Dr Leigh's speech in the second reading debate exactly what the intention of that was. However, having had the chance to reflect upon that and understand the intent behind it—and the substitution of '2019' with '2018' that is proposed—it is the government's intention to agree to the Labor Party's amendment to bring forward the deadline from 31 July 2019 to the new date of 31 July 2018 for the reviewing of entity accounts to be finalised. That will of course, as you outlined in your question, bring this into line with the time frame in the bill for high-value individual accounts.

It may also be of use to the chamber at this time if I give a quick understanding of the government amendments for which I tabled the explanatory memorandum previously. We are introducing those amendments to ensure that the provisions operate as intended upon the introduction of this bill. In particular, the amendments will correct a technical anomaly in the original bill so that statements relating to pre-existing individual accounts that are high-value accounts as of 30 June 2017 must be reported to the tax commissioner by 31 July 2018. These amendments help to ensure that this deadline is met, regardless of whether the reporting financial institution conducts its due diligence procedures on these accounts between 1 July 2017 and 31 December 2017 or between 1 January 2018 and 31 July 2018.

While I am by no means pretending to be an expert on these processes, I assume that that distinction between those two six-monthly periods has some relationship to the question you asked previously, Senator Dastyari, about some of the approaches to time frames under the legislation and that it will hopefully provide additional clarity in that regard.

It is important to appreciate that the timing provisions in the bill have been carefully crafted to ensure that they are aligned with OECD guidance on collection, review and exchange of information. The government are certainly eager to see this legislation successfully passed, which is why we have brought to the chamber some of these amendments that will aid in its operation and why, perhaps more importantly, we are cooperating with the opposition in relation to some of their amendments, which we have now had time to properly consider and reflect upon and which, overall, we believe will help to achieve and enhance the implementation of the common reporting standard for the automatic exchange of financial account information.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you for that, Minister Birmingham. It is very positive to hear that the opposition amendments that have been foreshadowed but not yet moved have a decent chance of government support. Again, I think it is quite effective when there is a bipartisan approach to and bipartisan support for these matters.

I want to note the work of the Senate Economics References Committee, which I chaired and which Senator Ketter now chairs, in this space. I think it has been really important to have that public debate raising a lot of this information. There is a lot more transparency and people understand what really goes on with multinational tax minimisation, or avoidance, or whatever you want to call it. The reality is that every dollar 'minimised' is a dollar that is not going to a hospital, to a school or to a service that is required. That is why it is so important that we get the legislative framework right: so that we can tackle this increasing issue.

Progress reported.