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Monday, 15 November 2010
Page: 2191


Mr HOCKEY (1:10 PM) —My colleague the member for Casey has explained the key provisions of the Tax Laws Amendment (2010 Measures No. 4) Bill 2010, which we are debating today, so I will not go through the details again. Today I want to move an amendment with the insertion of a new schedule 8 providing tax receipts to individual taxpayers. The coalition went to the election with a full suite of policies to further improve our taxation system, and we intend to push for fairer, lower and simpler taxes. One element, which is key, is transparency. Australians work hard to pay their taxes. The coalition knows that every dollar collected in individual income tax is a dollar that a hardworking family cannot spend on other things, like housing, food, education and health. Tax reduces the welfare of the taxpayer when it is not put to good use. The coalition believes that it is individuals themselves who make the best decisions on the use of their money.

Having said that, Australians will willingly pay their taxes when they believe that the money will be well spent. They know that there is value to the community as a whole in having well-run public services. They know that there are needy people who deserve income support. They are willing to do their bit for the public good. But there is an implicit agreement with the government: taxpayers will say that they are willing to forgo some of their income for the public good, but they want to be assured that their money is being well spent. Taxpayers do not have a good appreciation of where the tax they pay is spent by the government. The information is publicly available in budget papers, but these are not easily accessed and not easily well understood. At budget time we see these pie charts indicating where money is spent, but they are talking in billions of dollars. Billions of dollars is a hell of a lot of money, and people really struggle to understand what it means in the total amount of tax they pay. How much of the $20,000 they may pay in annual income tax is actually going for social welfare? How much is actually going on Medicare? How much is actually going on education?

We believe that taxpayers should be better informed. We want to make it easier for people to access this sort of information. The intent of this amendment to the Income Tax Assessment Act is to explicitly require the ATO to inform individual taxpayers where their tax paid during the year has been spent and to inform individual taxpayers of the total Commonwealth net debt in aggregate and their individual share. We believe that this greater transparency will improve accountability of government spending and debt. In short, we would be saying, ‘Firstly, thank you for paying this amount of tax’—be it $20,000—‘and, secondly, this is how the government has divided up your $20,000. A certain amount has gone in welfare and so on.’ It is not hard to do at all, because it is simply based on proportions. In that regard, the Taxation Office knows exactly how much people pay in income tax in net terms, and I do not think it is a bad thing to thank them for their contribution and then properly inform them of where that money went.

The amendment, which we may get the chance to talk about at the consideration in detail stage, gives quite a bit of detail and properly informs individuals of the challenges ahead. It is part of a deal that is so necessary to improve transparency and, at the end of the day, to properly inform Australians of how their tax would be better spent. When we go into consideration in detail I will formally move the motion, but it has been distributed in my name.