Andrew Leigh

Taxation MPI 

11 February 2016

In 2005 Peter Costello said of the now Prime Minister:

Well, he didn't actually have a plan, he had 280.

Then he laughed and said:

So, you know, … if you didn't like one, there were 279 that you could look at.

I do not think Peter Costello was much of a Treasurer, but even a stopped Rolex is right twice a day. What Peter Costello nailed the member for Wentworth on was his inability to stick to a solid plan.

We Should All Give A Toss That There Aren't More Indigenous Faces on Our Coins - Huffington Post, 11 February 2016 

Depending on which historian you believe, the British monarchy may trace its roots back as far as the 9th century. It's an extraordinary legacy. It also means that when the monarchy first got started, Indigenous Australians had already forged at least a 38,000-year bond with the Australian continent.

The eighth anniversary of the apology to the Stolen Generations puts a national spotlight on the ongoing disadvantage of Aboriginal and Torres Strait Islander Australians. It is right that we do this, just as this week has seen the government bring down the eighth Closing the Gap Report. In 2016, persistent racial gaps in health, employment and education are a national disgrace.

We should apologise for the wrongs that were committed, and recommit to closing the gaps that exist. But we should also be proud of our Indigenous people. How cool is it, I tell my kids, that we share this continent with a people who have the longest continuing link to the land in the world? Indigenous Australians have been here for at least 40,000 years, and perhaps as long as 125,000 years.

To celebrate the traditional owners, I believe it's time that we replaced the monarch's face on our coins with faces of some of our most significant Indigenous people. When we toss a coin and call ‘heads’, I believe it should be an Indigenous Australian face we're hoping to see.

Appropriations Bills No. 3 & 4 

11 February 2016

It will please the House, I am sure, to know that the opposition does not intend to block supply. We will support the appropriation bills, which, combined, appropriate an additional $2.2 billion for the 2015-16 financial year, largely to reflect measures in the 2015-16 Mid-Year Economic and Fiscal Outlook, as well as machinery-of-government changes resulting from the leadership change last year.

The 2015-16 MYEFO was released on 15 December last year, passing largely unnoticed. But those who were following it would have noticed that the deficit was again up. The deficit blew out by $26 billion over the forward estimates—a blowout of $120 million a day between the 2015-16 budget and the 2015-16 MYEFO. Most economists would not regard the No. 1 test of economic management as being a government's ability to deliver razor-thin surpluses. That is why independent economists would not generally regard a Treasurer like Peter Costello as being Australia's best ever Treasurer. Certainly, that is reflected in the fact that poor old Peter never managed to get the Euromoney award, unlike treasurers Keating and Swan.

The Government has now spent almost $1.1 million in consultant fees alone for the Tax White Paper, despite the most senior Treasury officials being uncertain whether it will ever see the light of day.

In Estimates hearings this morning, Treasury confirmed it has spent $444,000 on contracts with KPMG and EconTech for economic modelling. This comes on top of the $650,000 in advertising, design and market research costs revealed during last year’s Estimates hearings.

When asked whether the Tax White Paper process was alive or dead, Treasury Secretary John Fraser said he was still “waiting for direction” from the Government.

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.