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Tuesday, 30 October 2012
Page: 12516

Mr HUNT (Flinders) (12:40): Oh, dear! Oh, dear! This Tax Laws Amendment (Clean Building Managed Investment Trust) Bill 2012 is a shabby outcome. It is a partial concession from a government which has broken two promises. In 2008, as the member for Casey said, the government made a major point about the fact that it was sending a signal to the world that by reducing the withholding tax rate to 7½ per cent Australia was an investment destination. And now this bill comes against the background that it is doubling the withholding tax rate and, of course, it sends two messages to the world: firstly, that we are not to be trusted as a country under this ALP government and, secondly, that your investment, which was wanted in Australia, is not going to be so profitable. Therefore, desperately needed funds in the Australian building and construction sector, in particular, will be deterred from arriving in Australia.

In short, the broader context is that the government has led us to a situation where investment in Australia's building and construction sector and Australia's office sector is now less desirable than it was and its own logic of a reduction in the withholding tax rate is sending a reversed signal. That increase, that doubling, in the withholding tax rate is not only a broken promise and therefore a sovereign risk issue; it is also a very powerful signal about investment and whether or not Australia is a desirable destination.

This bill also comes against another broken promise. It is a very clear, unequivocal broken promise. The government went to the last election—and it had it on its books for some time—with the pledge of a $1 billion clean building green tax break fund. That is gone. That went in this year's May budget. The $1 billion green buildings tax break fund is gone, evaporated, eviscerated. It has disappeared. That was an express, clear and absolute promise. The Green Building Council, ASBEC—whose chair, a former state ALP minister Tom Roper was savagely critical of the government not just for the policy breach but also for the breach of faith with a pre-election promise—and the Property Council are all groups that relied upon the government in good faith and have been disappointed.

Against that background, instead of seeing an increase in the tax rate from 7½ to 15 per cent for qualifying clean buildings, this bill only sees an effective increase from 7½ to 10 per cent. Notionally, the government is saying this is a tax deduction from 15 to 10 per cent. In theory that it right, but only because it just doubled the withholding tax from 7½ to 15 per cent a few months ago. So it doubled the tax and then reduced some of it. It is still higher than it was five months ago. In summary: (a) there is confusion; (b) there was a breach of faith; and (c) the tax rate is still going to be higher than it was five months ago. The grand selling point is that it is not going to be as high as it might have been. It is not a government that is serious about foreign investment, it is not a government that is serious about supporting clean buildings and it is not a government that is serious about its promises.

This is slightly better than would otherwise have been the case, but it is no substitute for the government's own broken promise, and I would ask the minister in his summing up to address the broken promise. We will not oppose the government's reduction in the level of effective tax paid on clean buildings but we will certainly point out that the net tax paid and payable is going up as a consequence of a series of decisions over the last few months.