HOUSE OF REPRESENTATIVES
18 OCTOBER 2017
I wish to begin my contribution on the Treasury Laws Amendment (2017 Measures No. 6) Bill 2017 in a somewhat unusual way for a tax debate by noting that this is the day on which girls take over parliament.
The Girls Take Over Parliament movement is grounded in the fact that in 2017 we are still in a situation where women hold less than a third of the seats in the federal parliament. With the House and the Senate combined, the share of women is just 32 per cent. There are, of course, differences across parties. That share is 44 per cent for the Labor Party, House and Senate combined; 21 per cent for the Liberal Party; 14 per cent for the National Party; and 50 per cent for the Australian Greens. But, as in Australian business, women are underrepresented in the parliament.
Equally troubling, we have statistics showing that girls as young as 10 often feel as though they don't have the same chances in life. A survey by Plan International Australia and Our Watch found five out of six girls believe they're not given the same chances in life to get ahead as boys. One hundred and fourteen years after women were able to vote and stand in federal elections in Australia, we still have this entrenched gender inequity. So the Girls Take Over Parliament movement is the principle that women should have a greater say in Australian politics, that we need to ensure that the women leaders of the future have an opportunity to engage in this parliament. It's a movement which is taking place across the world, from Peru to Japan and Canada to Australia, in which young women and girls are stepping into the shoes of parliamentarians for a day.
I accept that working with me may not be quite as sought after as the job of the young woman stepping into Justin Trudeau's shoes as part of this movement! Nonetheless, I'm grateful to have Yasmin Hassen, a PhD student at the Australian National University's Crawford School of Public Policy, working in my office. When I was speaking with Yasmin about this particular bill, she emphasised the importance of making sure that cryptocurrencies, like bitcoin, have an important role in the future. She is passionate about start-ups and sees a vital role for Australia in the entrepreneurship economy of the future. Her views have informed my speech today and the comments I will make on this bill.
The Treasury Laws Amendment (2017 Measures No. 6) Bill ensures that the GST treatment of bitcoin is the same as for other supplies of money. This means that entities that are paying consideration in money are not liable for GST on the supply of money. This entrenches the notion that money is a medium of exchange, not consumed, and therefore not subject to GST. This accords with the principle that GST effectively applies tax to final private consumption. The treatment of bitcoin under this bill would bring Australia into line with the way the United States and the United Kingdom approach digital currencies. Neither of those jurisdictions apply value-added taxes to digital currencies, and the European Union has ruled that bitcoin is exempt from value-added tax.
The measure has the support of legal and tax professionals and the fin-tech sector. States and territories have of course been consulted on the reform, given that it affects the GST, and they have agreed to it. The Senate Economics References Committee and the Productivity Commission, in separate inquiries two years ago, both recommended this measure. And concerns about the use of digital currencies for criminal activity and money laundering are addressed in the anti-money-laundering and counterterrorism financing reforms, according to the advice we've received from Treasury. As Yasmin Hassen put it when I was speaking with her about this bill, it is important that we tackle the questions of money laundering, but it ought not be beyond our wit to do so while allowing the opportunity for digital currencies, such as bitcoin, to grow.
The second schedule of the bill amends the tax act to provide deductible gift recipient status for the Centre for Entrepreneurial Research and Innovation. The Centre for Entrepreneurial Research and Innovation is located near the University of Western Australia, in Nedlands, and was established in 2015. The centre is currently headed by Dr Carolyn Williams, a distinguished researcher in this field. Again, as we speak about girls taking over parliament, it's important to note that in the business sector we have not seen the same number of women becoming CEOs as men, so it is pleasing in the context of this bill to see the DGR status being provided to a centre that is headed by a prominent Australian woman researcher.
As we look at the question of tax adequacy, however, it is important to recognise the tax reforms that are being left undone under this government. This is a government that has failed to tighten debt deduction loopholes used by multinational companies and a government that has failed to provide the level of transparency that Australians demand. Australians want to see more tax transparency, not less. Yet the threshold for disclosure of tax data by private companies has been raised from $100 million to $200 million, effectively taking two out of three private companies out of the tax transparency net. The government has patted itself on the back for the Chevron judgement that secured an additional $340 million for the budget bottom line. But, extraordinarily, these are laws that the coalition voted against in 2012. Minister O'Dwyer has attempted to claim credit for Labor laws that she and her colleagues opposed. The chutzpah is extraordinary.
The coalition, if they'd had their way in 2012, would by now have left the budget $340 million worse off, and net debt would be rising even faster than it is already. Rather than dismissing Labor's policies to close tax loopholes, Minister O'Dwyer should accept that she was wrong in 2012 to vote against these laws. She's now praising their application in the Chevron decision, so she should issue the Australian people a mea culpa and say that she was wrong to vote against these laws and will now adopt Labor's sensible proposals to tighten debt deduction loopholes by moving to a worldwide gearing ratio rather than an arbitrary thin cap threshold. This would be an important way to boost the budget bottom line, crack down on multinational tax dodging, stem the growth of debt and ensure that we're able to fund the important investments in schools and hospitals that Australians demand.
An article written by TheGuardian correspondent Greg Jericho refers to a new study by the IMF examining the impact of the sorts of tax cuts which benefit the very top. It makes clear that the strategy, being pursued by the Liberal Party of Australia, of cutting taxes on the top two per cent of Australians while raising taxes on Middle Australia won't boost growth. The increase in taxes on Middle Australia that the government brought down in its budget is going to hurt growth, but the tax cut to the very top will do little to help, given that those at the very top have such high saving rates. No less an authority than the IMF has pointed out the error of the government's ways in attempting to cut taxes on those who have done the very best out of the Australian economy over the last generation. The last generation has seen the top one per cent's share almost double, yet that's a group that gets nine-tenths of the benefit from the government's decision to reduce the top tax rate by two percentage points. Nine-tenths of it goes to the top one per cent, a group which has done extraordinarily well over the past generation. By contrast, the government's budget increases taxes on Middle Australia and everybody earning over about $20,000. This retrogressive measure will see taxes on Middle Australia rise while taxes on the very top fall.
There are many sensible tax reforms that could be put in place. Labor has pointed out the way in which negative gearing disproportionately benefits those at the very top of the distribution. We've pointed out that without reforms to trusts Australia is seeing revenue flow away to the most affluent. Labor have had our policies carefully costed by the Parliamentary Budget Office. They have been carefully modelled. We know the benefits to the Australian economy of closing these tax loopholes. In the area of multinational tax, Labor is committed to providing protection for whistleblowers, reporting on entities evading tax and allowing whistleblowers, where their information results in more tax being paid, to collect a share of the tax penalty up to $250,000. It's an approach that has been used effectively in the United States and could bolster our coffers here in Australia. We've committed to mandatory shareholder reporting of tax haven exposure—that is, companies must disclose to shareholders as a material tax risk whether the company is doing business in a tax haven. We've committed to introducing public reporting of Australian Transaction Reports and Analysis Centre data and requiring the annual public release of international cash-flow data. We've committed to requiring government tenderers to disclose their country of tax domicile for contracts worth more than $200,000. If you want a government contract, Labor believes that you should have to state your country of tax domicile so that the Australian public clearly know where government tenderers are located.
Labor are committed to developing guidelines for tax haven investment by superannuation funds. We'll work with the Australian Tax Office, in collaboration with the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority, to develop guidelines for responsible investment by superannuation funds. We'll introduce a publicly accessible registry of the beneficial ownership of Australian listed companies, allowing everyone to find out who really owns our firms and preventing shareholders from using complex structures and sham ownership to avoid complying with corporate transparency rules. Finally, Labor would require the Australian Taxation Office's annual report to provide information on the number and size of tax settlements.
Labor will support the modest measures contained in this bill, but we do believe there is a deep and important tax reform agenda which must be pursued. We call on the coalition to move beyond these worthy but modest measures to much more significant reforms to our tax system to reduce inequality and build a more egalitarian Australia.