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Wednesday, 10 February 2010
Page: 1046

Mr NEUMANN (6:07 PM) —I speak in support of the International Tax Agreements Amendment Bill (No. 2) 2009. Trade, commerce and investment between countries is good—I do not accept the xenophobia which sometimes permeates our community and sometimes permeates utterances in this place that it is not. Generally treaties between countries relating to trade, commerce and investment are beneficial. They improve understanding, amity and the operation and effectiveness of economies. They improve the livelihood of individuals and communities. They allow us to effectively run our tax system in a way that prevents tax evasion. We have in this place dedicated, through appropriations bills and through the operation of the Australian Taxation Office, many dollars to clamping down on tax evasion—for example, in Operation Wickenby. There have been numerous high-profile individuals involved and well-publicised cases of clamping down on tax evasion which involved individuals conducting international operations. These types of treaties and protocols entered into with other countries can only benefit the consolidated revenue of our country and make sure that people pay their fair share of tax. They overcome the difficulties where people are on short-term secondments, and that is one of the benefits of the treaty between Australia and New Zealand.

Australia and New Zealand are great partners when it comes to economic arrangements. As a practising lawyer before coming to this place I had many cases in New Zealand and travelled there on numerous occasions. I had clients from New Zealand. We got rid of the ‘dingo fence’ in so many areas in the legal profession—areas of law such as family law, corporate law and defamation law—and we have taken a more national approach to the running of the national economy. But we need to make sure that we take an international approach with respect to taxation, trade and investment. Treaties with New Zealand are invariably beneficial to us. Greater and closer economic cooperation between Australia and New Zealand is of benefit to both countries. We have had trade treaties with New Zealand before. As the shadow minister mentioned, this is a new tax treaty signed in Paris on 26 June 2009. It does strengthen and augment our relationship with New Zealand. The shadow minister correctly and aptly outlined the benefits in terms of the key features of the treaty, but there are three that I think are of benefit which I wish to comment upon—that is, those which relate to making sure that, where there are profits from the provision of services in a country, taxation is performed in that country so that there is no duplication or doubling up of taxation.

The treaty also makes clear that income from property—including natural resource royalties and profits from agriculture, fisheries and forestry—may be taxed in full by the country in which the property is situated. That is another sensible amendment. The profits derived from the operation of ships and aircraft in international traffic are generally taxed only in the country of residence of the operator. Nothing infuriates business more, apart from bureaucratic regulation and difficult public service activity, than a business operating in a way that inadvertently incurs double taxation. No-one likes to be taxed. We do need to pay our fair share of tax, but you should not have to pay it twice—once in New Zealand and once in Australia. So the treaty which we are incorporating here by law is of benefit to all Australians in making sure not only that our tax revenue and its integrity is maintained but also that those Australians who trade with, work in or have dealings with New Zealand do not suffer from the stupidity of being taxed twice.

The other aspects of this legislation deal with the Australia-Jersey agreement on the allocation of taxing rights over certain income by amending the International Tax Agreements Act of 1953. The final aspect deals with the Australia-Belgium tax treaty. In both cases they are about making sure that we exchange information, preventing double taxation with respect to Jersey—because there is regularly cross-border income derived by individuals who are residents of Australia or Jersey. It is about ensuring that there is an administrative mechanism to solve transfer pricing disputes. The exchange of information can only benefit the taxation system here in Australia. The 2009 second protocol with Belgium, again, upgrades the exchange of information provisions in the treaty between Australia and Belgium and enhances the ability of both our tax authorities and those in Belgium to exchange information to prevent people, companies and trust arrangements evading tax in Europe as well as in Australia.

This legislation is of benefit to all Australians. It is not objectionable. It is important legislation. It helps the taxpayers of this country. It will allow our taxation office to deal with authorities overseas and improve the capacity of the tax office to get information to prosecute individuals who unlawfully evade tax. It will improve the public’s view of the integrity, authority and authenticity of our tax system. In those circumstances, I commend the legislation to be House.