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Thursday, 25 August 2011
Page: 5566

Taxation

Senator PAYNE (New South Wales) (14:24): My question is to the Minister representing the Treasurer, Senator Wong. Can the minister explain why at a time of increasing economic uncertainty as a result of the carbon tax and a chronic housing shortage the government is now imposing additional tax reporting obligations on the thousands of self-employed tradespeople who make up a crucial part of the housing and construction sector?

Senator WONG (South Australia—Minister for Finance and Deregulation) (14:24): First, there are a number of aspects to the first part of that question which obviously we do not agree with in terms of the effect of a carbon price. I think we have had a previous discussion in this place, including with the senator, on the likely impact of a carbon price, which is not what she has previously asserted both publicly and in this place. I would also point out the unprecedented investment this government has put into both social housing and housing more broadly. I think the senator is referring to an initiative announced in the budget that the Assistant Treasurer has carriage of in terms of reporting arrangements, so I do not have information before me to assist her in more detail, but if she asks a further question I will see if I can provide anything; otherwise I will take the question on notice.

Senator PAYNE (New South Wales) (14:25): Mr President, I ask a supplementary question. Can the minister advise why the government is not prepared to let independent contractors get on with the business of building houses instead of tying them up in red tape and viewing them only as possible employees and, I assume, potential future union members?

Senator WONG (South Australia—Minister for Finance and Deregulation) (14:26): It is amazing how much they return to the desire to trash the trade union move­ment. My recollection, and I will correct this or add to this if I am wrong, is that the initiative which was announced in the budget was in relation to reporting arrangements—

Senator Payne: It is a massive compliance issue.

Senator WONG: It is interesting that the senator is so concerned about small business when her party is opposing a tax cut for small business. Let us be clear. Every time the Liberal Party come in here and argue about small business and pretend that they care about small business, they should be upfront with the Australian people that they must be the first coalition in decades who are actually arguing for higher taxation rates for Australian small business. So if she is worried about red tape and compliance I suggest that the senator might look at the economic lunacy of their position, which is about imposing higher taxes on this sector. But in relation to the initiative, I understand it is a payment reporting system designed to improve the tax compliance of businesses in this sector. (Time expired)

Senator PAYNE (New South Wales) (14:28): I ask a further supplementary question, Mr President. Will the minister indicate whether the government will actu­ally compensate these self-employed trades­people for the extra time and money they will have to devote to complying with this new reporting burden, especially when they are also going to be suffering from the higher costs of the carbon tax?

Senator WONG (South Australia—Minister for Finance and Deregulation) (14:28): You would have to say that one of the largest compliance burdens imposed on small business by a government was in fact the Howard government with the GST. Don't we all remember that. It is interesting that Senator Payne wants to come in here and talk about compliance burdens.

Senator Conroy: That is a Liberal Party tax, so it is okay.

Senator WONG: Senator Conroy reminds me that taxes imposed by Liberal governments, including state governments in the mining sector, are okay. As I recall from the budget announcements, the reason this was introduced was that the ATO had found a high level of noncompliance in relation to tax obligations by contractors in this indust­ry. The senator may not believe that tax compliance is an important principle, but a party with sensible economic policies would recognise that it is.