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Thursday, 30 May 2013
Page: 4688


Mr OAKESHOTT (Lyne) (13:40): Mr Deputy Speaker, just on an administrative matter, I gather there is five more minutes before you will have to call stumps.

The DEPUTY SPEAKER ( Mr McClelland ): That is right.

Mr OAKESHOTT: Despite the advice that I just gave to the clerk, when we come back at 3.30 I will continue my remarks on the full budget reply for around 17 minutes on matters that my community and my country feel are important.

I have listened closely to the member for Kooyong, and I have listened closely to the debate that rages in Australia about our economy and about where we are going as a nation. There is no question that there is plenty more work to do. There is tax and spend reform that is desperately needed in our country. While there is an increasing focus on the spending side, I would hope that we do not give up on the work done by a very good former Taree local who made it to be Treasury secretary, Ken Henry, and the work done by his expert panel around 2009 on a blueprint for sensible tax reform. Much more work can be done in nation building to deliver on that.

On the spending side, I think the Parliamentary Budget Office—the very good, new Parliamentary Budget Office—released a paper last month which identified that the difference between tax and spend. It is not that great when, on the spending side, one of our main structural problems is this wont to give tax cuts whenever elections come around. If everyone could relive the last decade, which I consider for Australia were very fat and unsustainable times, the idea of delivering up to eight tax cuts—I think five were actually delivered—would be viewed differently. It has now placed us in a position which we do not want to be in. So, yes, at the time, they were tax cuts; but, really, it was unsustainable spending from a government point of view and, on reflection, it would now be viewed, I hope, differently.

Also when we look back on that period, our tax to GDP ratio was peaking. Again, if we are serious about the future, a 24 per cent tax to GDP ratio is the window which I hope all in this place would want to work under, regardless of our politics. The room to move in tax negotiation is around that 24 per cent tax to GDP. I hope in an arrangement that can be made some time soon amongst adults, the Commonwealth and the states—and I would also include local government—can sit around the table and, in the many ways that I tried to do through the tax summit where we got a bit but we did not get as much as we were chasing, negotiate a modern tax system. We need a tax system that works the efficient taxes a bit harder—those four or five that are doing 90 per cent of the heavy lifting—and that provides a bounty in trade-offs in compliance, productivity, red tape by getting rid of the more than 820 inefficient taxes in this country. What a bounty that would be under a broad umbrella of the 24 per cent tax to GDP.

That sensible conversation is still waiting to happen on a number of fronts. I pick the mining resource rent tax as one example of the failure to have that conversation between the Commonwealth and the states. The opportunity for the future is to get the resource rent tax working harder and to lessen the impact of inefficient royalties in the market. That is the point of the exercise. That was the point of the recommendation from Henry, and that is the unfinished business for whoever has government into the future. It is just one of numerous examples of the need for sustainability in the budget on both the taxing and the spending sides, and there needs to be a more mature conversation about that than the one we seem to have had to date.

Sitting suspended from 13:45 to 15:30

The DEPUTY SPEAKER ( Ms Saffin ): Firstly, I would like to apologise. If I had known I was on duty, I would have been here. I have been on duty in the other chamber. So sorry you have all been waiting. I call the member for Lyne in continuation.

Mr OAKESHOTT: I will just recap. I was talking about the opportunities in compliance productivity and red tape that still exist for government some time soon under roughly a 23 or 24 per cent tax-to-GDP umbrella of a grown-up conversation across Commonwealth, state and local governments on tax reform. It goes back to the Henry report. There are over 125 taxes in Australia and four or five of them are doing 90 per cent of the work. If we could get everyone together to talk sensibly and put in place a strategy for a modern economy, oh what a bounty on productivity compliance and red tape that would be. The concept of efficient taxes versus inefficient taxes is still not in my view well understood in Australia. You can get a better rate of return on some taxes coming in as compared to others. We should chase the efficient ones and minimise or remove the inefficient ones. That is an exercise that is still waiting to happen.

As far as the budget and the budget-in-reply speeches go, I think there were two great initiatives locked and loaded over the last fortnight. The first is the National Disability Insurance Scheme and the 10-year funding strategy behind it. Both sides of parliament now endorse that process. That is a major reform for Australia. For many families who have people with disability in their household, for carers and for workers in the field the National Disability Insurance Scheme will make an enormous difference. I thank the major parties for their bipartisanship on that initiative.

Likewise what was a welcome surprise in the budget-in-reply was the locking down now of the lift in the tax-free threshold from $6,000 to $18,200. That goes back to a Ken Henry tax reform recommendation, which was through to $25,000 as a tax-free threshold, but the leap when we introduced carbon pricing from $6,000 to $18,200 was a significant tax reform for Australia on its own. It will do a lot for tax administration in this country. In the electorate of Lyne it will remove about 4,000 people from the tax system altogether; it will end the silly game of putting in tax forms to get a nil receipt return and all the burden and compliance that goes with that. Roughly around 4,000 people in my electorate alone, and I imagine other electorates would be similar, are now completely removed from the tax system and everyone earning under $80,000 will also receive a tax benefit of sorts. This is a progressive model where those who are earning the least obviously at the same time are gaining the most benefits from this sensible reform. That this was locked in as well, in that process of the budget and budget-in-reply speeches, I think is a very welcome reform. It moves it up the ranks of reform in this 43rd parliament to one of the standout items for the future.

A couple of things remain challenged and in dispute. These are two very important ones for the electorate of Lyne, and I imagine they are for other electorates, in particular regional electorates. I went around eight community forums last week and very strong messages came back on the principle of equity in two key policy areas. One is the National Broadband Network, the other is the school-based education funding changes. Those two areas combined for regional areas deliver equity at a level that is wanted and needed. I can report, certainly from my community, there is frustration that there seems to be political divide over both of these topics. I would hope, through whatever means available—whether it is letters of exchange to head offices, as we have seen exposed today, or through any other means—that there can be some sort of coming together on the policy framework around the National Broadband Network, particularly for regional communities, and all the benefits that go with that. I would also hope that there can be a coming together, just as there has been between the Commonwealth and New South Wales, over the importance of school-based funding reform.

I used to work with Adrian Piccoli, who is now the New South Wales education minister, and I can vouch that he is a good man.

Honourable members interjecting

Mr OAKESHOTT: He is a good man—not only because of the politics of the moment, he also has a fantastic salami day in Griffith. He makes salami with all of his friends. He has delivered a good sausage for education in recognising that regional loadings, loadings for Aboriginality, loadings for poorer families and trying to get a new funding model and breaking what is currently an intolerable link between education outcomes and performance and the funding model itself—he is trying to break that link and make it a tolerable rather than an intolerable one, which I think is a noble effort. It should be protected as an arrangement between the Commonwealth and the states. If we are serious about the language that was in the budget-in-reply about state sovereignty, then that agreement should be protected and respected. I would encourage other states to get on board with that principle of equity as well.

I did want to pick up on the topic of the day around political donations, as was predicted in jest before I resumed speaking. I think we have just today found a $60 million saving at least in the federal budget. Anyone in the room: we can reach our own agreement with an exchange of letters, maybe, but there is an opportunity there. It would be interesting to hear in reply tonight from the parliamentary secretary or the Treasurer what will happen now—in light of what was obviously a cosy arrangement for the outsourcing of political donation reform between two head offices—from a budget point of view, to what is potentially a saving of between $50 million and $100 million. Clarity around the budget implications of the politics of today is important. Alongside that, there is the question about genuine, real, substantial political donation reform in the interests of every single member in this place: is there is any desire to actually pursue what was agreed to be pursued three years ago? That includes things like $1,000 thresholds and a whole range of other issues contained in the agreement reached on political donation reform.

Today sent me back to look at election disclosures, and it really is treated as a joke by many candidates. I know there is a lot of debate around about the size of donations and whether or not they are true. I just hope the focus in this place does not drift onto political donation scandals, because I went and looked at a whole lot of election disclosures, including that of the candidate for the Nats whom I am up against and whom I ran against last time, and there was just 'nil, nil, nil' all away down the page. It is a farce. He is not alone; he is just the example I am using of the disclosure form itself being abused. Every voter in my electorate has no idea of what money came in, what money went out and where it went, despite the fact that everybody knows—they got plenty of newsletters in their mailboxes and they were bombarded on their TVs. There is no accountability trail at all for any voter who wants to see in detail what came in and what went out.

There are ghost employees on the books of private companies in local hospitals who are big donors to the Libs but really working as officials in campaign offices. Is that a donation or not? Should it be declared or not? In my view, it should be. It has implications for the private company and the local area. Land dealings between private donors and candidates: should they be declared? Yes, there is lots of money involved, and there are potential conflicts of interest, whether real or perceived, involved. But, at the moment, voters are not invited to any consideration of that whatsoever, and it is in all our interests to find a way to start to remove the question marks and have everything on the table in a transparent way. If there is $60 million in the budget that is looking for a home, it may find one in substantial and real political donation reform—as I said, in the interests of all. (Time expired)