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Tuesday, 19 June 2012
Page: 7060


Mr HOCKEY (North Sydney) (20:11): by leave—I move amendments (1) to (3) together:

(1) Schedule 1, page 13 (line 15), omit the heading.

(2) Schedule 1, item 12, page 13 (line 16) to page 14 (line 29), omit the item.

(3) Schedule 1, item 14, page 15 (lines 6 to 8), omit the item, substitute:

14 Application

The amendments made by this Schedule apply to income years starting on or after the day this Act commences.

As I have previously outlined, the coalition are opposed to the retrospective application of this bill and we do not believe that the government has a strong enough justification for its implementation.

The coalition are opposed to retrospective tax changes as a matter of principle. I would have thought that members such as the member for Kennedy and the member for New England would have been opposed to retrospective tax going back seven years. That sort of uncertainty just adds to the sovereign risk the nation is facing under a Treasurer that is addicted to sovereign risk.

The coalition understand that it can change the substance of bargains struck between taxpayers who have made every effort to comply with the prevailing law as at the time the agreement was entered into. Retrospectivity can expose taxpayers to penalties in circumstances where taxpayers could not possibly have taken steps at the earlier time to mitigate the potential for penalties to be imposed. It may change a taxpayer's profile, which in turn can materially impact the financial viability of investment decisions and the pricing of those decisions. Most importantly, the retrospective application of the change will heighten Australia's level of perceived sovereign risk. Therefore, the coalition will not support any attempt by the government to create further sovereign risk in this environment. We do not support going back seven years to obtain tax in agreements that people entered into in good faith at the time that they were entered into.

Our amendments give the bill prospective effect from the date the act commences. The Commissioner for Taxation and the government have refused to identify how much revenue is going to be claimed by this bill. I would like to know from the Assistant Treasurer how much revenue is at stake. The Commissioner for Taxation did not have the number before him and he said it was insignificant, but you tell us: how much revenue is at stake that would justify breaking a core element of policy principle, that is, that the law should be prospective, not retrospective?