Claire Chandler (Tasmania, Liberal Party, Shadow Assistant Minister for Foreign Affairs) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. How should Australian companies pay franked dividends during periods when they are raising capital under the government's franking reforms?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

This is another one that the opposition are opposed to. We inherited a budget with a $50 billion structural deficit, with pressures coming to us—a trillion dollars of Liberal Party debt, debt that had doubled before the pandemic hit. This is the budget we inherited. All of the very modest changes that we're making, including closing some tax loopholes and protecting the integrity of the tax system through the changes we're making to franked dividends, the opposition is opposed to. It is something that raises a very modest $200 million when implemented. Again, they're the 'no-alition' with their head in the sand. They don't want to pay for anything. They don't want budget repair. They don't want to fix the energy crisis. They don't want to support energy power bill relief. They don't want to support housing for women. They don't want to support Aussie jobs.

Sue Lines (President) Share this | Link to this | Hansard source

Minister, please resume your seat. Senator Chandler?

Claire Chandler (Tasmania, Liberal Party, Shadow Assistant Minister for Foreign Affairs) Share this | Link to this | Hansard source

President, the point of order is relevance. It was a very specific question. The minister has been responding for a minute and two seconds, and I would like her to be relevant to the question that I asked.

Sue Lines (President) Share this | Link to this | Hansard source

Thank you. The minister is being relevant. I'll listen to make sure the rest of the question is answered.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

The changes to franking credits, through the off-market share buybacks arrangement, and the capital-raising measure, which those opposite announced and never implemented—another one: raise it, put it in there, never do it—are to ensure the integrity of the tax system and to close off loopholes. It's a reasonable, rational, measured response, very small, that assists with budget repair, and they are opposed to it. We will continue without them. It raises $200 million—

Sue Lines (President) Share this | Link to this | Hansard source

Minister, please resume your seat. Senator Birmingham?

Simon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | Link to this | Hansard source

President, this was quite a precise question, with a direct point made by Senator Chandler, asking about how Australian companies pay franking dividends during periods when they are raising capital. I would ask you to invite the minister, in the interests of direct relevance, to turn to the issue of companies raising capital under these reforms and how they are impacted.

Sue Lines (President) Share this | Link to this | Hansard source

Thank you, Senator Birmingham. Senator Wong?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

The minister is discussing the very policy reform that Senator Chandler asked about. I'd submit to you that is clearly directly relevant.

Sue Lines (President) Share this | Link to this | Hansard source

Thank you, Senator Wong.

Opposition senators interjecting—

The:

Order! I do believe that the minister is being relevant, so I invite her to continue.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Well, I've answered the question.

An opposition senator: No, you haven't.

I have! If the off-market share buyback arrangement—

Sue Lines (President) Share this | Link to this | Hansard source

Minister, please resume your seat.

Honourable senators interjecting—

I'm asking for order, particularly on my left. Minister, please continue.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Thank you. The measure will align off-market share buybacks with on-market share buybacks, which I think is a sensible, rational tax integrity measure that raises a very modest amount of revenue and assists with budget repair. (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator Chandler, a first supplementary question?

Claire Chandler (Tasmania, Liberal Party, Shadow Assistant Minister for Foreign Affairs) Share this | Link to this | Hansard source

How does the minister explain the wording in the explanatory memorandum attached to the franking credit reforms that 'if an entity has never previously made a distribution then the entity will not have a practice of making distributions'?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I haven't got the explanatory memorandum before me, and I would want to see the context in which that was said. I mean, you're opposed to the reform. You're trying to blow it into something that it isn't. I'll have a look at the explanatory memorandum and see the context. I'm happy to look at the explanatory memorandum. I don't have it before me right now. But I do support closing off a tax loophole and ensuring the integrity of our taxation system—something that senators in this place used to have an interest in, but we don't expect any of that from the no-alition that are going to say no to absolutely everything, including sensible budget repair measures. You were budget vandals when you were in government and you're going to continue on with the vandalism from opposition.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Chandler—

Senator Hume, I have a senator on her feet, and you are calling out.

I am not inviting you to answer and argue back. I'm simply calling you to order. Senator Chandler, a second supplementary question?

Claire Chandler (Tasmania, Liberal Party, Shadow Assistant Minister for Foreign Affairs) Share this | Link to this | Hansard source

Just like with superannuation, Labor repeatedly promised not to make any changes to franking credits if they won government. The Prime Minister stated, 'Labor has heard the message clearly and we will not be taking any changes to franking credits to the next election.' Given that Mr Albanese promised no changes to franking credits prior to the election and is now doing the opposite in government, why should any Australian trust Labor not to make further tax grabs on their savings or investments?

Sue Lines (President) Share this | Link to this | Hansard source

Order!

Senator Hughes, I've called you to order.

And Senator McGrath. Minister, please answer the question.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Well, Senator Chandler's question is wrong. This change does not involve any change to franking credits or dividend imputations—and you know it, but it doesn't suit your narrative. So, now we know that you're opposed to everything. You're also opposed to tax integrity. You're opposed to closing off tax loopholes. We can add that to the list of things you don't agree with. So, no to housing for women and children escaping domestic violence, no to jobs in the manufacturing sector, no to power-bill belief, and now no to tax integrity and no to closing off tax loopholes. What do you stand for? Absolutely nothing.