Mr McMULLAN (5:10 PM) —These new business tax system bills come before us at a very interesting time in the public debate about tax in Australia and about business tax in Australia in particular. For most Australians who only get their views of politics from television and newspapers, something which they would see as very unusual occurred yesterday, and that is that the major parties agreed on a matter of tax. Of course, those of us who are in the parliament know that that is what usually happens, that most measures that go through this parliament, particularly tax measures, go through with bipartisan agreement. But I do not want to minimise it: this was a bigger change than most things that go through the parliament, and its agreement was therefore more significant than the norm. I am sure all of us have been disconcerted in the past by circumstances in which people say, `Why don't you ever put anything through the parliament with agreement?' when we all know that 90 per cent of what happens is dealt with in that way.

I was pleased to be part of the process that led to the agreement, not because I think this is the best business tax package we could ever have had. It is not what the Labor Party would have done. If we had been in govern ment, we would have introduced measures differently—some of them very similar, particularly where they relate to venture capital and overseas pension funds. That has been a policy that we, and I, have been advocating for a long time, and we are pleased to see it being implemented. Some of the other changes with regard to scrip for scrip, et cetera are issues that we have been advocating and that we support. Others are ones about which we have more reservations; they are not our preferred position. But, on balance, it is a package that can give some certainty to the business community that the changes to business tax will last more than two years. That should therefore enhance the investment climate. One of the prices you pay when you lose elections is that, if you want to give a bit of certainty in a circumstance, you have to be prepared to support an initiative that is not your preferred initiative but that has sufficient elements of a positive nature for you to be prepared to support it.

The package as a whole—not particularly these two bills but I hope, Mr Deputy Speaker, you will allow me to put them in the context of the whole package of which they form a part—has a very significant anti-avoidance element, which has always been very important to the Labor Party. We believe that it will work substantially to enhance the rigour of the tax system and the integrity of the tax base. That is a very important thing not only for the flow of revenue to the government but for the confidence of the PAYE taxpayers of Australia who pay their tax that other Australians are more likely to be paying their tax. There is no doubt that there is great frustration, and it reached a peak with the stories about very wealthy Australians paying no tax and stories about what is happening on the building sites and other places in Australia where people are arranging their affairs to take advantage of tax loopholes.

There are parts of these measures which we support enthusiastically because they reflect the principles which we have been advocating, and I refer again particularly to the venture capital measures. As I said in an earlier speech, I hope the Treasurer will ac knowledge some of the reservations that AVCAL have raised with regard to that measure in the detail, not the principle, and I hope that there might be the capacity for some discussion with them. But that does not affect our preparedness to support the measures. They do not go to the heart of it or to the core principles which we support.

With regard to the other measures in this package, particularly as they relate to small business, I am interested in the increased emphasis on the active assets. It is not the first time this has been in there. Some of these measures are really rephrasing of existing measures to reflect the balance of the package of measures. That is sensible and we support it, but it is important that we make that distinction. It might be an issue we have to address more often in the future.

The other aspect that I wish to refer to briefly—in conclusion, as we did agree that I would speak for five minutes only on this matter—is the significance of the changes with regard to averaging. In so far as it relates to the business tax system, there is no problem with these changes and it is part of what goes to the revenue neutrality of the measure. But beyond the direct business community, the impact of the changes to averaging on independent retirees, for example, is an issue that gives me a bit of concern. It is not going to lead me to not support these measures—I was aware of it before the proposition came forward and I said we would still support it—but it is an issue that we as a community will need to consider and contemplate a broader response to.

I was a little disconcerted that those who reviewed these measures recommended removing one of the benefits in the system by which they are not affected but by which other people are affected. They very enthusiastically recommended that averaging be taken out of the system when none of the review team could ever be affected by the averaging measures. I was disappointed by that, but I understand in the broad context of the whole package why it is there. I refer to it only because it is part of what we are putting through in this package and I want to put those reservations on the record. It is a package which we support; therefore, these are bills which I am pleased to support.