Andrew Leigh

Tax Laws Amendment (New Tax System for Managed Investment Trusts) Bill 2015 and cognate debate

10 February 2016

Labor announced its intention for a new tax regime for managed investment trusts in 2010, and with the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Bill 2015 the Abbott-Turnbull government is proceeding with work started under Labor. Because this bill advances work that was commenced under the Labor government, we support its intent and many aspects of it. However, we are concerned about a number of specific provisions following our consultations with stakeholders since the tabling of the bill. We therefore refer the bill to the Senate Economics Legislation Committee for further scrutiny. Labor reserves our final position on this package until the Senate Economics Legislation Committee reports. We leave open the possibility of moving amendments in the Senate.

IS THE GOVERNMENT OUTSOURCING TAX COLLECTION TO SNITCHES?

In their latest attempt to look busy on multinational tax, reports today suggest the Government is considering a plan to have employees snitch on their bosses in return for a cut of the returns.     

This comes from a government that has cut 4,700 jobs from the Australian Tax Office, including around 1,000 jobs specifically from its Audit area. 

It is finally realising two years too late that sacking the staff who monitor tax compliance is no way to ensure everyone pays their fair share of tax.

Companies have innovated, now it's government's turn, Sydney Morning Herald, 9 February

It can be hard to spot trends while they’re happening. But looking back on 2015, it’s pretty clear this was the year the sharing economy really took off in Australia.

Services like Uber and Airbnb went from emerging services to major market players, while new Australian companies like Airtasker and ParkHound grew from start-ups into fully-fledged firms.

As these services have expanded, there has also been an effort by some state governments to work out new rules and regulations that address issues like safety in the sharing economy without smothering its growth. The ACT became the first Australian jurisdiction to legalise ride-sharing services such as Uber in October, followed by New South Wales in December. The Tasmanian Government has promised to introduce a similar bill in the first half of 2016. Many local governments have also begun working out new rules for sharing things like homes and carparks. 

It’s been heartening to see some of the states and territories embracing the challenge of the sharing economy. But now we need the Federal Parliament to also step up. 

Malcolm Turnbull’s Government had the opportunity today to let tax authorities see inside the bank accounts of big companies sooner. Surprise, surprise – they blocked it.

The Common Reporting Standard is a hugely important weapon in the global fight against tax dodging, and one that has been several years in the making through the OECD.

For the first time ever, tax authorities will automatically exchange information about the contents of company and individual bank accounts held overseas.

When the Government introduced its bill to give effect to this measure in Australia, it set the deadline for disclosure of company accounts way off in the distance in 2019.

Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015 

8 February 2016

Labor will seek to amend this bill to bring forward the deadline for reporting company accounts from 2019 to 2018. Australia is a laggard rather than a leader in the Common Reporting Standard. This is an issue which is critical to the fight against multinational profit shifting. It is absolutely vital in the issue of tax enforcement. The work done by Labor through the G20, winning us the presidency of the G20, and work done through the OECD, ensured that Australia was at the vanguard of making a difference on multinational tax avoidance. Yet, since the Abbott-Turnbull government was elected, we have fallen to the back of the pack.

The government proposes that we move to the timetable not of the fastest countries in the world but to that of countries such as Russia. It is deeply disappointing that the government is unwilling to see Australia move on the Common Reporting Standard.

E&EO TRANSCRIPT

ABC NEWSRADIO

PARLIAMENT HOUSE, CANBERRA

MONDAY, 8 FEBRUARY 2016

SUBJECT/S: GST, negative gearing, income inequality, land tax, capital gains tax.

MARIUS BENSON: In the past 15 minutes, Opposition Leader Bill Shorten has called on the Prime Minister to categorically rule out any increase in the Goods and Services Tax. For more on that, I’m joined by Andrew Leigh, the assistant Shadow Treasurer. Andrew Leigh, good morning.

ANDREW LEIGH: Good morning, Marius.

BENSON: We are, I suppose, waiting for the categorical, 100 per cent statement by the Prime Minister. But he has pretty much said: no GST. That's what he said yesterday on Insiders.

LEIGH: Well, at the same time we had Arthur Sinodinos out arguing that there ought to be an increase to the GST, Marius, so it is pretty unclear where the Government stands. All we know is that when they say they're in favour of agility, they've taken every possible position on the GST. Australians who don't want to see a rise in the GST have only one choice at the next election which is to vote Labor, because we have been absolutely clear that we wouldn't support a tax which would fail to add to growth but would worsen inequality.

BENSON: The Government has said it would make its position clear long before the election, so that won't be an issue if the Government now goes ahead as, universally expected, without a Goods and Services Tax increase. If that is the case, you would obviously welcome that decision.

LEIGH: Well clearly, but we'd also welcome a Government which engages in proper processes on tax reform. You well know, as a long-time watcher of politics, Marius, that process matters as well as outcomes. When they came to office, the Government announced a Tax White Paper in the first two years, and business and community groups put hundreds of thousands of dollars into preparing more than 800 submissions to that inquiry. That's now been junked in favour of a Prime Minister who seems to be spending more time listening to nervous backbenchers than going out there speaking to worried Australian families. It ought to be Australian families that are being heard in this process, and we ought to be allowing all that expertise in the community to flow into a tax reform process rather than simply floating thought bubbles so the backbenchers can shoot them down.

E&OE TRANSCRIPT

TELEVISION INTERVIEW

SKY AM AGENDA

MONDAY, 8 FEBRUARY 2016

TOPICS: GST; superannuation tax concessions; negative gearing.

KIERAN GILBERT: With me now is the Shadow Assistant Treasurer, Andrew Leigh. You've heard a bit of the debate thus far: the Prime Minister not yet convinced on the GST. Is this what a healthy, mature debate on public policy looks like?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: I think we're learning, Kieran, what being innovative and agile involves. It involves taking every position on tax reform and then not listening to Australian families, as Labor has been, but just listening to your backbenchers. This Prime Minister has lost more ministers than he's had positive clear tax proposals. I think increasingly Australians are wondering: what does this bloke stand for? He says he's serious about climate change but he's got Tony Abbott's climate policies; he says he wants to do marriage equality but he's kicking it off to a $160 million plebiscite; and he says he wants economic leaderships but on the core issue of tax reform can't articulate a clear plan for –

GILBERT: But isn't he saying – I put it you again – isn't this a mature way to go about a discussion on tax issues? You look at all the evidence, you don't rule things out before you've even begun, and then you get on with it – unlike Labor which did not allow the Henry Tax review to even look at the GST.

LEIGH: Well Kieran, a mature approach would have been to follow through the Tax White Paper which the Government announced in 2013. It took in 800 submissions; had a $600,000 advertising campaign; millions of dollars were spent by communities and business groups putting in submissions. Now it’s been completely junked in favour of the thought bubbles that are being floated. Two completely different thought bubbles yesterday: one from the Prime Minister saying maybe not, one from Arthur Sinodinos saying maybe. It's absolutely clear that if you don't want a GST the only way to make sure it doesn’t happen is to vote Labor at the next election.

E&OE TRANSCRIPT

DOORSTOP INTERVIEW

PARLIAMENT HOUSE, CANBERRA

MONDAY, 8 FEBRUARY 2016

SUBJECT/S: GST; Labor’s fair plans for tax reform; asylum seekers. 

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning everyone. Ever since the notion of raising the GST has been put on the table, Labor has been saying it is a bad idea. We have made absolutely clear this isn't going to be good for growth. We’ve pointed out that the Australian economy fell backwards when we first introduced the GST, and that the Japanese economy went into recession after they raised theirs. We've also said it's bad for inequality.

It's a sad day when Malcolm Turnbull is more inclined to listen to his own backbenchers that to Australian families. There are now signs that Malcolm Turnbull might be walking away from GST; though who knows given that Arthur Sinodinos seems to be walking in the other direction. The fact is that when he talks about being agile and innovative, the Prime Minister seems to be at his most agile and innovative when he is ducking and weaving around the tax debate.

This is a Government that has lost more ministers that it has had concrete tax ideas. Increasingly, Australians are wondering: what does this Prime Minister really stand for? He says he is serious about climate change but has taken on Tony Abbott's climate policies. He said that he believed in a free vote for marriage equality, and now he’s taken on Tony Abbott's idea of a plebiscite. He said that he was keen for economic leadership, but we haven't seen economic leadership. Instead what we've seen is the junking of a white paper process which began in 2013 and has cost the Australian taxpayers $600,000 in advertising alone; cost community and business groups probably millions of dollars in putting together the 800 submissions for the Tax White Paper. That methodical process of a white paper has been completely junked in favour of focus groups and discussions with worried backbenchers.

CSIRO Cutbacks and Changing Climates 

8 February 2016

Last week the CSIRO's chief executive, Larry Marshall, announced that the organisation would shed 110 positions from the ocean and atmosphere staff and a similar number from its land and water division. In the early days of the Abbott-Turnbull government I visited the CSIRO along with my colleagues, Mark Dreyfus and Kim Carr, to participate in an unusual activity for their very busy and focused research staff—a political protest. The staff and their research capacity was being literally decimated—one in 10 faced the chop—and an indignant activist reflex was triggered. Some of those out on the day in white lab coats said that it was their first political protest. One forestry researcher who was facing the chop asked me the question: if Australia does not do eucalyptus research, who in the world will? Now the cuts are more targeted and they are more extreme. This latest directive will see the ocean and atmosphere section lose nearly eight out of 10 staff members.

We need to improve productivity, but not by cutting penalty rates, The Guardian, 6 February

Ever since Thomas Mortimer worried that the advent of the sawmill ‘would exclude the labour of thousands of useful workmen’, progressives have had an uneasy relationship with productivity. Everyone is pleased to see technology and process improvements that make jobs safer, cleaner and less stressful. But many worry that such improvements will also shrink the number of jobs going around and make life much worse for workers who end up displaced by machines. 

At its best, this anxiety manifests in close attention to who the winners and losers are in today’s changing workforce. At worst, it results in a rose-tinted yearning for the kind of back-breaking jobs few workers ever enjoyed at the time.