Mr HUNT (11:29 AM) —I rise to speak briefly on the New International Tax Arrangements Bill 2003. I note the conclusions of the member for Rankin and the fact that he referred to the essence of this bill as being that it reduces compliance costs and encourages investment. I welcome the bipartisanship on this bill. The bill falls within the context of a certain set of economic outcomes which have real impact and meaning for Australian workers, Australian families and the Australian economy as a whole. We heard only yesterday that in 2003 Australia achieved an economic growth rate of 4 per cent, which placed it at the head of the OECD. In 2003, Australia was the best performing economy in the entire developed world.

In addition to that growth outcome, we also have less than six per cent unemployment. This is about real jobs for Australian workers whether in Hastings, Rosebud, Somerville, Cowes, Lang Lang, Koo Wee Rup, Dromana or Mount Martha. What is fascinating is the increase in the number of full-time jobs relative to part-time jobs—a very important outcome. We also have lower interest rates, at around the six per cent level, and low inflation. So we have the combination of the highest growth in the Western world, some of the lowest unemployment we have had in the last 30 years, some of the lowest interest rates we have had in the last 30 years—which for homeowners in towns such as Somerville, Mount Martha and Dromana is a real practical outcome—and low inflation.

These are the outcomes against which this bill is presented. But these outcomes only come from certain actions; they are not outcomes that are common throughout the Western world. They are the product of actions and reforms that have been taken by the government—for the most part with opposition from the Labor Party. That is a very interesting thing. There are three core elements of those actions into which this bill fits. Firstly, you must have microeconomic reform to ensure that the productivity of individual firms and sectors is affected. We have been through a process of difficult micreconomic reform. As a result, on our waterfront and in our transport sector—the arteries of the nation's productive enterprises—there has been a dramatic increase in productivity. We were told that it was impossible; yet, strangely, once these reforms were introduced, productivity increased dramatically. Whether in terms of crane lift rates or other indicators, there are real changes. But all these reforms were opposed.

We also had macroeconomic reform, which affected the taxation system as a whole and the budgetary position. As a result, there has been a dramatic and substantial increase in funds available, because of the decrease in debt. As you retire $60 billion in debt it has an enormous impact, in perpetuity, on the funds that are available each year to the Australian budget and the Australian people. That has an impact on interest rates and, through taxation reforms, on the balance between consumption and investment. All those things have been critical and yet they were all opposed.

Along with microeconomic reform and macroeconomic reform, the other great change has been in the investment climate. This bill addresses exactly that element. The New International Tax Arrangements Bill 2003 ultimately contains the first instalment of changes to Australia's international tax regime. These changes relate to four areas: the foreign investment fund rules exemption, interest withholding tax exemptions for certain unit trusts, attributable income of controlled foreign companies and double taxation of royalties. This is ultimately about ensuring that compliance for Australian companies is easier and that there is a regime that encourages international investment in Australia. Why does that matter? It matters because it brings jobs into the Australian economy and it ties Australian firms and workers into the global market.

Sometimes we forget about the notion of the global market; it does not have any meaning in ordinary discussion. But we came together as a federation because it was ridiculous that Victorian companies be confined to trading in Victoria or that New South Wales companies be confined to trading in New South Wales. At times we get the argument that Australia should not participate in the global economy—that to participate in a free trade agreement with the United States is to expose Australia to all sorts of heavy pressure from outside. That is a fundamentally flawed proposition, because you cannot hide from the world—and nor do we want to. By opening up Australia to participation in the international economy, we are opening up opportunities for Australian firms to compete and participate in markets that are many times larger than Australia's. This creates jobs and makes us an open and forward looking country and economy rather than a backward and inward looking country and economy; that is the difference, and it is critically important.

In that context, what this bill does is very simple. It has two core purposes: firstly, to modernise the current international tax law regime and, by doing so, encourage investment; and, secondly, to reduce compliance and information costs for taxpayers. This reduction in compliance costs does three things: firstly, it makes Australia a more attractive place for investment; secondly, it encourages the establishment in Australia of regional headquarters for foreign groups; and, thirdly, it helps Australian companies to be more competitive in the global market by allowing them to raise funds. That is extremely important. If companies can raise funds globally, the pool and their own capacity to draw from that pool are massively increased.

In a previous life, when I was an engagement manager with McKinsey and Co., one of the things I did was to look at what may be called `regionalisation'. Regionalisation means that large global companies are focusing not just on countries but also on time zones and regions. Within that movement, Australia is competing to be a regional headquarters for different companies. We compete with Singapore and Hong Kong in the Asian region to become a regional headquarters. This bill, through its treatment of overseas entities, makes Australia a more attractive destination. With that, it brings specific jobs, investment and capital. For Australian families that means the combination of jobs, investment and profitability. All those things ultimately flow through to the fact that we have a four per cent rate of growth, and that flows through to the amount of money that families have to spend on their homes, children's education, health care and all the basics of life. That is the connection between the New International Tax Arrangements Bill 2003 and life in Somerville, in terms of interest rates, jobs and money in the pocket for families. These are big reforms which have an impact, and it is very important to understand those things.

I am delighted to speak in support of the New International Tax Arrangements Bill 2003. I do so knowing that this bill comes in the context of a set of outcomes which have a real impact on people's lives: four per cent growth; less than six per cent unemployment; interest rates of around six per cent, which for home owners has a dramatic effect; and low inflation. They are the outcomes of microeconomic reform, which increases the capacity to be productive in our day-to-day working life; and of macro economic reform, which reduces the burden of debt on future generations and the interest rate burden on current generations and increases the capacity to attract investment to Australia. That is why this is a good bill. I am delighted to support the New International Tax Arrangements Bill 2003 and I commend it to the House.