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Thursday, 15 November 2018
Page: 8288


Senator McALLISTER (New South WalesDeputy Opposition Whip in the Senate) (12:52): Labor will be supporting the Treasury Laws Amendment (Black Economy Taskforce Measures No. 2) Bill 2018 and the Excise Tariff Amendment (Collecting Tobacco Duties at Manufacture) Bill 2018. These two bills implement three measures announced in the 2018-19 budget under the banner 'black economy package'. The measures add $4.2 billion to revenue over the forward estimates.

Schedule 1 to the black economy bill denies an income tax deduction for certain payments if the associated withholding obligations have not been complied with. Withholding payments such as pay-as-you-go earnings can currently be claimed as a deduction, even if the required withholding obligation hasn't been met. The government argues that this will provide a greater incentive for employers and entities engaging contractors to comply with their withholding obligations. This measure has an unquantifiable gain to revenue. This implements a recommendation of the Black Economy Taskforce's final report.

Schedule 2 to the bill requires entities providing road freight, IT or security, investigation or surveillance services that have an ABN to report to the ATO information about transactions that involve engaging other entities to undertake those services for them. This is an expansion of the taxable payment reporting system introduced by the former Labor government for the construction sector. It has already been expanded by the government to courier and cleaning services, with Labor's support. The measure increases revenue by $605.8 million over the forward estimates. The measure was a recommendation of the Black Economy Taskforce's final report.

The bills also amend the excise acts to establish a framework to make excise duty on tobacco due and payable at the time of manufacture. Presently, excise on tobacco goods is generally due and payable upon entry into Australia for consumption at the rate of excise applying at that time. The change in timing is to reduce the importation of illicit tobacco. The measure had a net gain in revenue of $3.6 billion over the forward estimates.

While we support the bill, it would be remiss of me not to note how a desperate government has thrown fiscal responsibility out the window, and at best now relies on accounting tricks to deliver its projected surplus. The sneakiest thing of all in the most recent budget is taxing tobacco 12 weeks earlier upon entry into Australia rather than, at present, when it leaves the warehouse. That will boost tax receipts once and once only in 2019-20 by $3.27 billion. As many commentators note, the Prime Minister, the former Treasurer who delivered this budget, is a former advertising executive and, like many advertisements, the projected budget surplus relied on a gimmick. Without that timing trick, the return to surplus would be pushed back a year to 2020-21. Nonetheless, I reiterate that Labor will support these bills.