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Tuesday, 19 November 2013
Page: 717


Mr BOWEN (McMahon) (19:29): We will oppose this legislation in the House and we will oppose it in the other place. We will oppose it on several grounds. We will oppose it because we do not believe the minerals resource rent tax should be repealed and we will oppose it because we believe the other measures included in this bill certainly should not be repealed.

This bill is called the Minerals Resource Rent Tax Repeal and Other Measures Bill. It could just as easily be called the 'schoolskids bonus repeal bill'. It could be called the 'low-income superannuation contribution repeal bill'. It could be called the 'small business tax increase bill'. It could be the 'abolition of accelerated depreciation for cars bill'. It could be called any number of things. Of course, the government has chosen to call it the minerals resource rent tax repeal bill. I will deal with each of these items in turn.

The minerals resource rent tax is, of course, the centrepiece of the bill. On this side of the House we believe that a profits based tax on profits from the minerals sector—minerals which belong to the Australian people—is a good reform. That is not to say that it does not have its challenges in implementation, it does not have its challenges in design. But to say, as those opposite do, that it should be abolished is something we do not agree with at all. Those opposite say, they said, it was a dagger at the heart of the prosperity of Australia. They said that it would raise so much money that it would cripple the minerals sector in Australia. Now they say it should be abolished because it hasn't raised enough. They cannot have it both ways.

Of course, reform is always difficult. Those opposite said that it would make projects unviable. I challenge any government speaker tonight in this debate—or in the vast hour or so that they have deigned to allow for debate!—to outline which projects have not proceeded because the minerals resource rent tax is in place. Name a mining project, name a venture which has not proceeded. I would be very interested to hear from honourable members opposite.

I saw the honourable member for Moncrieff a few weeks ago on telly—on The Nation on Sky—and he said, of course, that the minerals resource rent tax 'has stopped projects proceeding'. I saw David Speers, the host, say, 'Could you name one,' and there was this long, awkward pause we occasionally see on television and then the member for Moncrieff indicated that he did not have one at hand—but he was sure that there was one somewhere.

Reform is never easy. Difficult reforms are always worth fighting for. We have to draw on history. The minerals resource rent tax is not the first time a government has attempted to implement a profits based tax on resources. We saw a previous government, the Hawke Labor government, introduce the petroleum resource rent tax for exploration which occurs off our coast for exploitation of what is also Australia's natural resources by offshore petroleum enterprises. I am going to spend a little bit of time on this because it is instructive.

In this House the Hawke Labor government had to fight very hard to see the petroleum resource rent tax introduced. The Hawke Labor government said that this resource, which belongs to all Australians, should provide a revenue stream for all Australians. I went back and had a look at that debate, because it is very, very instructive. Somebody who then held the office that I now hold, shadow Treasurer, said this:

Nothing could better illustrate the counterproductive nature of the Hawke government's energy policies. The Hawke government's RRT will effectively destroy the incentive for offshore exploration.

That was the then shadow Treasurer John Howard, who argued that this resource rent tax would stop ventures proceeding and should not be proceeded with. Then we had the then member for Mayo—that economic genius Alexander Downer!—who said:

The legislation is yet another example of this government introducing new taxes on the few productive industries we have left in Australia, thereby inhibiting their development.

'The few productive industries we have left in Australia'. Now there is an optimistic view for you from the future foreign minister! If you look through the Hansard of that debate—it was a long and bitter debate—I could have not told you, Deputy Speaker Broadbent, it was from the PRRT debate and you would have thought it was from the MRRT debate. They are the sorts of things that those opposite said at the time about the PRRT that they have said since about the MRRT. Mr Everingham, who I have a vague recollection of and who sat opposite, said this:

This government's determination to find every means to extract dollars from the industry to prop up its disastrous record of economic management threatens the very livelihood of the oil exploration industry.

You see, members opposite at the time said that the PRRT would be such a disincentive for growth that it would destroy the petroleum industry in Australia and they fought it, resisted it, with all the energy they could muster. There was one little problem for those members opposite. It passed both houses at the time. It went on, of course, not to provide a disincentive for investment and has raised for the Australian people in the time since then, in 2013 dollars, $39 billion. Of course we have had the Howard government come and go and I do not recall an attempt to repeal the petroleum resource rent tax. We now see the Abbott government in office and I have not seen a bill come before the House to abolish the petroleum resource rent tax—because, of course, history tells us that the petroleum resource rent tax did not have the adverse consequences that Tories at the time said it would. It did not have the chilling effect on investment that they said it would. But it did do this: it has raised for the Australian people $39 billion in 2013 dollars since it was introduced. It was a good reform—a reform that the Hawke government had to fight for, a reform that the Hawke government had to argue for, a reform that was done in good time so that subsequent conservative governments could not repeal it. Unfortunately, we see this conservative government repealing the MRRT.

But they are also not just repealing the MRRT in this piece of legislation; they are repealing a whole range of other measures, which I will deal with sequentially. Firstly, we see this government attempting to repeal in this legislation the low income superannuation contribution. More than any other measure, the repeal of the low income superannuation contribution tells us about the priorities of this government. It tells us even more than their priorities. It tells us about their values. It tells us about the values of this government.

As you know, Mr Deputy Speaker Broadbent, most Australians get a tax concession for saving for the future—saving through superannuation—as they should. Most Australians receive it, but not all. High-income earners receive a tax concession for saving for the future, and they should, but in the previous government we thought that it was fundamentally unfair that low- and middle-income earners receive zero tax concession for saving for the future. One in three Australian workers receives not one bit of assistance to save for their future through the superannuation system, and we thought that that was unfair—and we think it is unfair now.

But we did not just think it was unfair; we did something about it. So the low income superannuation contribution effectively means that people earning under $37,000 now get a tax concession for saving through superannuation. They actually get some benefit out of the tax system for putting money aside for the future. I would again invite honourable members opposite who are going to speak in this debate to explain to the House and to the Australian people why they think it is fair that somebody who might be a cleaner or a manufacturing worker or a shop assistant gets no assistance at all to save for their retirement through the superannuation system and the tax system.

It is even worse than that because this government is taking the low income superannuation contribution away retrospectively. Australians who saved money through the superannuation system, put money aside, and got a tax concession are having it taken away by this government. Can you imagine the furore if this government attempted such a measure for high-income earners? If any government attempted a retrospective tax on the superannuation of high-income earners there would be a justified outrage but because low-income earners and middle-income earners have less of a voice in the national debate this government thinks they can get away with it. Well, we are their voice and we will oppose this measure to repeal the low income superannuation contribution.

Low- and middle-income earners have a right to be outraged that the tax concession on their superannuation savings is being ripped away by this government. I said that this tells us about the values of the government, and it does, because not in this bill, but in other measures, this government is reversing other tax changes of the previous government. They are providing a tax break for people who have more than $2 million in their superannuation accounts. Good luck to people who have more than $2 million in their superannuation accounts. Good luck! There are people in this House with more than $2 million in their superannuation accounts—good luck to them. They should receive a tax break but not the extraordinarily generous tax breaks that this government intends to give them at the same time as taking away tax breaks from people throughout Australia who are working away quietly in their shops and factories trying to save a bit for the future.

I oppose class warfare in all its forms and this is class warfare from this government, giving a tax break to people with more than $2 million in their superannuation accounts and taking it away from Australians who earn less than $37,000. I do not suggest that they raise the same amount of money because they do not. I do not suggest that if you did not do one you would not have to do the other because that does not equate. But it equates when it comes to values and priorities. It equates when it comes to what is important in this House, and it is important in this House that low- and middle-income earners receive some support for saving for the future.

This tax grab by this government on low- and middle-income earners has a particularly adverse effect on females in the workforce. It is not just because females, even still in 2013, receive a lower average pay than males. It is because females in the workforce have a more interrupted working life and more things that take them out of the workforce, most particularly having children. Even with paid parental leave, many mothers stay out of the workforce for longer than 12 months and therefore they have an extremely interrupted working life. That means they do not have a period in the workforce to build for their retirement. So the low income superannuation contribution is a chance to give them a bit of a leg-up, as they say, for their retirement so that when they hit retirement age they have something to fall back on. What is unfair about that?

I invite, again, honourable members opposite to explain to us why they think that somebody with under $37,000 of income deserves zero support through the tax system to save for their retirement. Zero support—the government are not just reducing the support through the tax system, they are not just taking a bit away, they are abolishing the only tax concession that goes to low- and middle-income workers earning under $37,000. It is not in the national interest when you combine the abolition of the low income superannuation contribution with another measure in this bill, which is to delay the increase in superannuation from nine per cent to 12 per cent. That will reduce our national savings by $53 billion by 2021-22.

We all know that this Prime Minister does not really understand superannuation and does not really support it. He stood in this House, somewhere over here in opposition, after the increase in superannuation was introduced—he did it in the adjournment debate, as I recall—and called Australia's superannuation system the biggest con job in Australian history. He does not support superannuation. The Prime Minister does not understand that superannuation is the way to remove people from welfare, through their retirement, and give them a chance to save for their future. The Prime Minister fundamentally does not understand that. He said here in this House that he does not really support moving from nine to 12. I hope that this delay does not become a cancellation when the government says: 'It's all too much harder than we thought. We're going to have to cancel this increase from nine per cent to 12 per cent.' They have done it before. They promised the Australian people in 1996 that they would move the superannuation guarantee from nine per cent to 12 per cent and they reneged on that promise.

Mr Nikolic: That's wrong.

Mr BOWEN: They reneged on that promise in 1996. It pays to listen to the debate before interjecting. In 1996, they promised the Australian people they would not interfere with the increase to 12 per cent and they reneged on that promise.

Another measure in this bill will remove the instant asset write-off for small business. It sounds like some sort of arcane tax measure and maybe it is. Actually, it is a small business tax cut, which the previous government introduced. It was a measure to reduce the red tape compliance burden on small business. When Labor came to office in 2007, small businesses could write-off any investment under $1,000 without all the red tape burden which normally goes with that. The previous government increased that threshold to $6,500 so that there was much more that small business could just write-off without the red tape burden. At the last election, we had a commitment to increase it further to 10 per cent.

This bill takes it back to 2007 levels, back to $1,000. We hear a lot from this government about small business. They say that they are the party of small business. We hear a lot about red tape. They are strong on rhetoric, short on action—not only that, they are strong on counterproductive action. In one of the first pieces of legislation they are bringing before the House, this government want to increase taxes on small business and increase the red tape burden—increasing taxes on small business by a billion dollars and increasing the red tape burden on any small business that chooses to make an investment between $1,000 and $6,500. Now there is not only the cash flow impact but also the red tape impact.

I wonder if the member for Kooyong is going to speak in this debate, the member who has been tasked by the Prime Minister to cut red tape. Is he going to support this measure which will increase the red tape burden on Australia's small businesses? We will oppose this measure because we do not actually believe in just the rhetoric about small business; we believe in action to support it. We are proud of our pro small business reforms. We saw this red tape burden and we lifted it from small business, and this government are going to reimpose it. It is not just us who say this; the Australian Industry Group said of the increase in the threshold of the small business asset write-off that it 'will add complexity and compliance costs for eligible small businesses.' This change in the law will increase red tape and affect cash flow at a time when the government needs to be looking to boost non-mining investment as investment in the mining sector winds down. It will be a stymie to investment from the small business sector.

This is a very significant measure that this government are seeking to abolish. It will increase taxes in up to 2.7 million small businesses. It is not just that. This bill also abolishes the loss carry back. Again, it might sound like an arcane tax measure. Loss carry back is a measure not just for small businesses; it encourages innovation and a bit of risk-taking. It says that if you make a loss in one particular year, you can take that into account in future years. I would have thought that it was something that this government would embrace with all their rhetoric about entrepreneurialism, innovation, risk-taking and private enterprise. I would have thought they would embrace this measure, and would have congratulated the previous government for introducing it. But, no, we see them abolishing it in the first sitting fortnight. This will be a hit to businesses of almost $1 billion over the next four years.

Then we get to the accelerated depreciation of motor vehicles for small business. Again, we have heard a lot from this government about the importance of the car industry and the importance of tax treatment for the car industry. This would allow a small business an immediate $5,000 deduction for a vehicle costing $6,500 or more. So do not lecture us about the car industry, when this accelerated depreciation is being taken away by this government, an impost on small business and an impost on the car industry. Let us see this impost play through the car industry. We will be having a bit to say about that and holding the government to account for its impacts. We will not be lectured by this government about fringe benefits tax or any other measure when this new government are actually abolishing the accelerated depreciation of motor vehicles for small business.

The final matter I am going to speak about is one that I know is very close to the heart of the member for Jagajaga, who has joined us in the chamber—that is, the schoolkids bonus. We hear a lot about cost of living, as we should. We heard about cost of living before the election and we hear a lot about cost of living after the election. We get lectured in this chamber about what we should do about cost of living. Well, let us have a talk about cost of living and about government measures to support families dealing with the cost of living.

Something that helps families deal with the cost of living is $410 a year for primary school students and $820 a year for high school students. If a family has two children, that amounts to $15,000 over the course of their schooling life. I think that might help them with the cost of living just a little. I think that might actually help families deal with the cost of sending their children to school. I think that taking $4½ billion from Australian families might be something we might want to talk about in the cost-of-living debate. We might not want to be lectured by this mob about the cost of living when they are putting legislation into this House to take away $15,000 out of the pockets of Australian families.

We hear from the government, 'The minerals resource rent tax has not made as much as we thought or you thought, or was predicted; therefore, we have to abolish this measure.' There is one little problem with the government's equation. The minerals resource rent tax was never designed to pay for the schoolkids bonus. If you look at the announcements at the time, the minerals resource rent tax was never introduced to pay for the schoolkids bonus. They were completely separate policies. If this government want to abolish the schoolkids bonus, it should have the guts to put it in separate legislation, bring it into the House, bring it into the other place and see how you go. Try your luck, because it was not paid for by the minerals resource rent tax. It never was. So how dare this government incorporate it in the same legislation? Do not talk to us about cost of living when you are taking money away from Australia's families with school children and putting it in the same legislation as the mineral resource rent tax. It was never paid for by the minerals resource rent tax.

The school kids bonus was designed to replace the education tax rebate introduced by this government. That is where it came from. I looked through the legislation and I thought, 'Well, maybe if they are abolishing the schoolkids bonus then maybe they are at least reintroducing the education tax rebate.' No, they are not. While I am at it, the accelerated depreciation of motor vehicles, which I talked about before, was replacing the entrepreneurs tax offset, not reintroduced by this legislation either. It is the same problem.

This government has some consistency issues to deal with. I really look forward to hearing from honourable members opposite because they have some explaining to do. They have got to explain to Australian families how taking money away from the schoolkids bonus is going to help the cost of living. They have got to explain to Australia's low- and middle-income earners why every single one of them over there thinks it is fair that they should get zero tax concession for saving for their retirement. And they need to explain why they think somebody with $2 million in their superannuation account deserves quite a good tax concession, thank you very much, but somebody on $37,000 or less deserves not a bit less but zero tax concession to save for their retirement.

We think it is unfair and we will vote accordingly because this is a debate about values, not just priorities but values. Our values tell us that the schoolkids bonus is important. Our values tell us that the low-income superannuation contribution is important. Our values tell us that the small business tax concessions are important because we do not just talk about small business; we do not have empty rhetoric about how they are the backbone of the nation; we actually do things that help small business; and this government is taking them away.

My challenge to the government is this: tell us why it is fair. Tell us why it is better for small business that they do not have the increased thresholds for the instant asset write-off. Tell Australia's families why it is fair that they lose the schoolkids bonus. Tell Australia's hard-working low- and middle-income earners why they should receive zero tax concessions for their superannuation. When they tell the Australian people that, I think the Australian people will have a fair bit to say about it. We will certainly be having plenty to say about it in this debate in the weeks, months and years to follow.