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

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

THERAPEUTIC GOODS AMENDMENT (2016 MEASURES No. 1) BILL 2016

SECOND READING SPEECH

I am pleased to introduce the Therapeutic Goods Amendment (2016 Measures No.1) Bill 2016, which amends the Therapeutic Goods Act 1989.

A number of the measures in this Bill support the recommendations made by the Expert Panel Review of Medicines and Medical Devices Regulation about improving key aspects of the regulatory scheme for therapeutic goods.

The reforms reflect extensive consultation undertaken by an Expert Panel led by Emeritus Professor Lloyd Sansom AO, a distinguished educator, researcher and policy adviser in the health and pharmaceutical sectors. Professor Sansom was assisted by Mr Will Delaat AM and Professor John Horvath AO.

The Review found that the Therapeutic Goods Administration is well respected internationally and benchmarks well against overseas regulators. However, it also identified areas for improvement, particularly in relation to providing industry with more flexible and timely pathways to market; enabling patients to access new medicines and medical devices faster; increasing collaboration with overseas counterparts to minimise regulatory burden; and enhancing post-market monitoring of the safety of products.

The purpose of this Bill is to make a number of such changes that will enable members of the public to have access to medicines and medical devices more quickly, while continuing to maintain high standards of safety and efficacy which the public expects - and decrease the regulatory burden on industry and on medical practitioners.

The Bill includes measures which support the introduction of new expedited pathways for the marketing approval of certain medicines and medical devices, by providing a regulation-making power to set out the details of the new pathways for priority review. The detail will be set out in the regulations and will include, for example, the criteria for goods to utilise these pathways, how to apply, what fees may apply etc. Such details will be the subject of extensive consultation with industry and other relevant stakeholders before any such regulations are made.

Expedited pathways for the registration of certain new medicines are intended to facilitate earlier access for patients with serious and life-threatening conditions who have unmet clinical need. Expedited review processes will also be available for certain medical devices that are identified as novel, such as a device which represents a use of a breakthrough technology and also meets the criteria of addressing an unmet clinical need. The criteria for these pathways are currently being developed in close consultation with consumers, health professionals and industry.

Recognising that some important new medicines will be available to patients at an earlier stage, the Medicines and Medical Devices Review recommended that the current post-market monitoring framework in Australia be enhanced through a more comprehensive monitoring scheme for medicines and medical devices. The Bill supports the implementation of this measure by enhancing compliance requirements for medicines sponsors.

The Bill supports another Review recommendation to allow certain kinds of variations that do not impact the quality, safety or efficacy of medicines to be made through notification. This approach is similar to practices adopted overseas. The Bill provides for regulations to identify what are likely to be low-risk, straightforward changes to product details.

The Bill also contains measures to support the Review recommendation to allow easier access to certain unapproved therapeutic goods by health practitioners through notifying the TGA rather than by requiring pre-approval.

The Bill provides for regulations to be made to allow Australian companies to undertake conformity assessments of the manufacture of medical devices in Australia, rather than the TGA or overseas-based assessment bodies being the only ones able to do such assessments. The precise nature of these details will be the subject of extensive stakeholder consultation before any regulations are made.

The Bill also provides for regulations to prescribe time periods within which decisions in relation to listed complementary medicines must be made.

These timeframes would be the subject of industry consultation before being implemented in regulations. This change removes a barrier to bringing innovative products to market – statutory timeframes provide a degree of certainty and allow sponsors to plan for the roll-out of a new listed product containing the new ingredient.

The Bill provides review and appeal rights for sponsors seeking approval for the use of a new ingredient in listed medicines.

The Bill includes measures to support the intent of other Review recommendations in relation to consolidating TGA advisory committees. A number of minor amendments in the Bill aim principally to achieve greater consistency between the regulation of different types of therapeutic goods and to reduce health risks to the public.

TREASURY LAWS AMENDMENT (ENTERPRISE TAX PLAN) BILL 2016

SECOND READING SPEECH

This Bill forms a key component of the Government's reform agenda to improve Australia's tax system for businesses.

These actions will provide the encouragement needed for Australian businesses to grow and create jobs.

The amendments contained within this Bill provide much needed support to businesses by:

These amendments will enable Australian businesses to reinvest more of their earnings in employing more Australians and growing their businesses – this will benefit all Australians.

This will drive investment, allowing us to keep our living standards high and improve wages.

Since 2001, Australia has gone from having one of the lowest corporate tax rates in the world to now offering one of the highest. There are only five advanced countries with higher corporate tax rates than Australia.

This Bill therefore is an important step for Australia – it will allow Australian businesses to once again be globally competitive. It will assist our businesses to succeed both at home and internationally. And it will encourage businesses to remain in, or relocate to, Australia.

We are improving the tax system for business and better aligning it with a culture of business investment and development to foster jobs and growth.

As productivity rises, more than half the economic benefits of a lower company tax rate will go to workers in the form of higher real wages.

Complementary Government initiatives will ensure businesses are not able to avoid paying tax and are required to pay their fair share. Whilst the Government is keen to support businesses with lower taxes, those businesses which seek to pay no tax will be caught and punished. Initiatives include tougher rules for multinationals that shift profits offshore, enhancing the ATO's enforcement capabilities, and changes to improve corporate transparency.

We are also making sure that small businesses, that is 96 per cent of all businesses in Australia, improve their cash flow and reinvest in their business, should they choose to do so.

Small and medium businesses are the prime drivers of jobs and growth in our economy. They are also overwhelmingly Australian owned and more likely to reinvest their earnings in future growth as they seek to build their businesses.

A tax on their business is a tax on their enterprise which ends up being a tax on the jobs that they create. A national economic plan for jobs and growth must back these businesses. When they invest and grow, we all win.

These are some of the businesses I have been visiting since I have become Treasurer, which will benefit from the changes put forward by this Bill:

They are all small, family businesses. They are all growing and looking to employ more Australians.

Our economic plan, which this Bill is part of, does not punish these businesses for growing.

We do not believe that they become multinationals when their turnover increases to more than $2 million and neither do they. The prize for their growth should not be a higher tax rate.

That is why this Government supports the introduction of this Bill to bring down taxes for Australian businesses.

I will now turn to the specifics of the Bill.

Schedule 1 to this Bill amends the Tax Rates Act 1986 to reduce the company tax rate.

In the 2016-17 income year, businesses with turnover below $10 million will face a tax rate of 27.5 per cent. The turnover threshold to qualify for the lower tax rate will be raised to $25 million in 2017-18, $50 million in 2018-19, $100 million in 2019-20, $250 million in 2020-21, $500 million in 2021-22, $1 billion in 2022-23 and removed entirely in 2023-24.

The corporate tax rate for all companies will then be progressively cut to 27 per cent in 2024-25 and by one percentage point in each subsequent year until the corporate tax rate reaches 25 per cent in 2026-27.

Schedule 4 to this Bill amends the Income Tax Assessment Act 1997 to align the maximum rate for the distribution of franking credits to be consistent with the rate of tax faced by the company making the distribution.

Schedule 5 to this Bill makes consequential amendments to the Income Tax Assessment Act 1936 and the Income Tax Assessment Act1997 to reflect the reduction in the corporate tax rate.

Schedule 2 to this Bill increases the small business unincorporated income tax discount to 16 per cent from the 2026-27 income year. In the 2025-26 income year and earlier income years, a lower rate will apply.

For the 2016-17 to 2023-24 income years, the unincorporated tax discount will be 8 per cent.

For the 2024-25 income year, the discount will be 10 per cent. For the 2025-26 income year, the discount will be 13 per cent.

The tax discount will continue to be capped at $1,000 per year.

Providing unincorporated small businesses with a reduced rate of tax improves their cash flow and enables them to retain more earnings, which can be reinvested into their business. It also ensures that small businesses benefit from a reduced rate of tax regardless of whether they are operated as companies, sole traders, partnerships or trusts.

Schedule 3 to this Bill amends the Income Tax Assessment Act1997 to increase the aggregated turnover threshold for access to many small business tax concessions to $10 million.

The aggregated turnover threshold for access to the unincorporated small business income tax discount will be increased to $5 million, and the current aggregated turnover threshold of $2 million will be retained for the small business capital gains tax concessions.

More than 90,000 additional small businesses will be able to access a range of small business concessions. These include simplified trading stock rules, a simplified method of calculating Pay-As-You-Go instalments by the Australian Taxation Office and the option to account for GST on a cash basis and pay GST instalments as calculated by the Tax Office.

On average, smaller businesses face higher costs of complying with their regulatory obligations as a proportion of their turnover and income, compared to larger businesses.

Eligible businesses can use the small business concessions to reduce their tax liability and compliance costs and improve their cash flow.

Full details of the measure are contained in the explanatory memorandum.

Debate adjourned.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.