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Wednesday, 11 May 2011
Page: 3761


Mr NEUMANN (Blair) (18:49): I speak in support of the International Tax Agreements Amendment Bill (No. 1) 2011. I expected my speech to be short, somewhat lukewarm and even turgid and it probably will be, but I cannot resist responding to the member for Tangney. They are a broad church, those Western Australian Liberals, aren't they? The member for Tangney talked about a false choice; the only false choice we have are those opposite who claim that they are supporters of the market, free enterprise and small government. But John Howard never found a rort for the middle class that he did not want to fund. He funded them in every chance he got.

They were the architects of big government. In the mid-2000s the proportion of tax to GDP under the Howard coalition government was way above this government. In fact, one of the first things we did was reduce the size of government compared to tax revenue and GDP. It is extraordinary that the member for Tangney could come in here and say that. I thought he might be starting to go on as an apostle of Reaganomics, but he is even quoting Ron Paul. Not even mainstream Republicans would quote Ron Paul as someone in the mainstream of conservative thought.

The member for Tangney would have us believe that we should get rid of taxation. The income taxation system, as cumbersome and as difficult as it is—and I studied the Income Tax Assessment Act when I was at law school all those years ago; you had to virtually weigh it because it was so heavy, you could not read it—it is the method by which we civilise this country. It is the way in which we provide for education, health, roads, infrastructure and community grants. It is the way we support the poor, the weak, the oppressed, the disadvantaged and the disabled. We do it through the Income Tax Assessment Act and the taxation system. In the dog-eat-dog world of the member for Tangney and those opposite they would not even provide for these people. They do not want the government to civilise.

I actually do believe the member for Tangney, having listened to his speech on this bill, is a devotee of Margaret Thatcher. He said there was no such thing as society, only families and individuals. There is a community, there is a society and the Income Tax Assessment Act helps us to provide for health and hospital funding in our electorates and schools, roads and the kinds of things that our communities expect and, I think, our nation expects as well. What we do with the Income Tax Assessment Act and taxation income helps fund our prosperity and economic development because the market cannot provide for everything. Those caucus colleagues of yours in the National Party, those Queensland Nationals, will tell you how important it is to fund those areas that the market cannot provide for. I reckon if he goes into the National Party caucus room any time when parliament sits in May with that sort of speech they would probably chuck him out. Having heard his speech, there is probably not a party in parliament that the member for Tangney feels comfortable in. We know that those opposite tried to get rid of him a couple of times, but they just could not do it.

I speak in support of this legislation and I will be turgid and brief now. It will come as no surprise to anyone that, like the Income Tax Assessment Act, the International Tax Agreements Act 1953 is a pretty cumbersome piece of legislation. The bill before the chamber fulfils two important agendas. I think it modifies and streamlines the structure of the act and it provides a legal basis to combat tax avoidance and evasion in a number of different jurisdictions: Aruba, Chile, the Cook Islands, Malaysia, Guernsey and Samoa. The bill will simplify the presentation of the operative provisions of the act and incorporate the treaties that we have undertaken with these foreign entities by reference to accessible online resources. Schedule 2—and this bill, like a lot of bills, provides for schedules by which we pass the legislation—gives the force of law in Australia to new bilateral taxation agreements with Aruba, Chile, the Cook Islands, Guernsey, Malaysia, Samoa and Turkey. The Chilean and Turkish treaties reduce taxation barriers to bilateral trade and investment and that is a very good thing. These treaties will improve the integrity of the taxation system by providing a framework through which the Commissioner of Taxation can have cooperative bilateral arrangements with his counterparts to prevent taxation evasion in other jurisdictions. That is also a good thing, because the Department of Homeland Security in the US has said that the flow of offshore money between countries in a way that prevents proper taxation is a $16.2 trillion industry; they hide it in tax havens all over the place. This accountability, this idea of the commissioners speaking to one another, is a very important thing.

The agreement with Malaysia will amend the current Australia-Malaysia tax treaty to update the exchange-of-information article in that treaty to the current international standards endorsed by the OECD, the G20 and the United Nations. Malaysia is a neighbour. It is growing in importance to Australia. Certainly on our side of politics we think that, when it comes to border protection, asylum seekers and refugees, Malaysia is not just an economic partner but a cooperative regional partner in the regional framework we have for dealing with these issues.

The other agreements with Aruba, the Cook Islands, Guernsey and Samoa seek to eliminate double taxation on certain income derived by individuals such as government workers, students, business apprentices, pensioners and retirees. These four agreements also provide a mutually agreed procedure for the resolution of taxation disputes involving transfer pricing adjustments.

This is another example of the federal Labor government's commitment to improving and streamlining the taxation system. It is not something you might take to the gym every morning but it is something that might assist the Australian public. With this bill it becomes even harder for those who seek to deny our nations a share of the prosperity of their companies and to avoid paying tax. We do not mind if people make the arrangements lawfully and legitimately but we do not want them engaged in tax evasion. That is a problem across not just our country but our region and the world. Taxation, as I said, contributes to the health, education, wellbeing and prosperity of the whole country, including the people in the electorate of Blair, in Ipswich and the Somerset region. This legislation is an example of our commitment to ensuring accountability in the national interest, and I commend the bill to the House.