BILLS: Tax and Superannuation Laws Amendment (2016 Measures No. 1) Bill 2016

Mr HUSIC (Chifley) (10:59): When you think about the level of seriousness that has been attached to the Tax and Superannuation Laws Amendment (2016 Measures No. 1) Bill 2016, it is really a sad joke. This is a bill that has sought, in many respects, to be a fig leaf. In the whole debate about multinational tax reform, people were asking the coalition: 'What are you going to do about the way in which multinationals game different tax systems all over the globe? What's your response?' The coalition's response is, effectively, to target the 15-year-old who downloads a video or some other person who is getting some other digital product and to apply the GST to it—as if targeting a music download or a video download and applying the GST to it is the big answer and will fix multinational tax issues that are confronting the nation. It is simply a joke that that is the big answer in all of this. Yes, it will raise some money, no doubt. Yes, it is important that we find different ways to improve revenue. But, if reliance on this is evidence of a government's commitment to tackle the big, pressing problem of the complete erosion of revenue as a result of multinationals gaming taxation systems in the world, it is just a joke. It is symptomatic of a government that is not really committed to this issue.

Labor has put forward a series of policies designed to address this. In fact, we believe that our policies would raise more than $7 billion through the measures that we put forward, not the least of which would increase resources to the ATO to enable better compliance. Targeting the 15-year-old who finds something cheaper on the internet and downloads it and hitting them with a GST—and this is apparently massive GST reform—is, as I said before, laughable.

What is also laughable is the speed at which the government took up this option. There have been concerns for quite some time about the way in which many of these large companies have gamed taxation systems, engaged in profit shifting and used transfer pricing to help themselves. Not only that but those acts—the use of transfer pricing and, in effect, profit shifting—have themselves impacted on Australian general consumers and small businesses. For years, we have been raising the issue of the way in which these companies set their pricing and overcharged Australian consumers and small businesses in the process. In fact, a report went to the then Minister for Communications, now the Prime Minister, indicating that Australians were being ripped off and that we were paying, in some cases, 50 per cent or, in some cases, 200 per cent more. These prices reflect the way in which major companies charge their subsidiaries for product knowing that, if they charge in a particular way and the local entity does not make a profit, they will not be required to pay tax at a particular level. They will be able to sidestep the obligations expected of them by the way that they structure themselves.

The government have moved super-fast to charge some 15-year-old for downloading music and not having a GST applied to it—they have said, 'Well, we fixed that'—but what about the pricing overall? They have not dealt at all with those pricing issues that inject a level of inflation into the broader system. Their only answer has been: 'We're going to get those big multinationals. We're going to charge them GST.' That is not even half the job done properly.

It is all cosmetics. As is often the case with the government, it is all about the style; it is never about the substance. I think of the government and the way in which the Prime Minister has used his massive popularity. He has used the popularity of the government to, effectively, transform the government into a petting zoo. That is the equivalent of what they have done. This is a much cuter version of a government compared to the last lot. The last lot were the equivalent of a snake farm, and no-one really wanted to hang around them. Now they have brought in the petting zoo, with all these new, cute faces that they think will be there to answer for them. But, in most instances, when you turn to a petting zoo for a decision, they just blink back—they have no answer—and that is what we have got from the government. Every time there is a hard decision to be made, they do not want to sacrifice their popularity. They do not want to sacrifice feeling good about the way they are.

Mr Hunt interjecting

Mr HUSIC: I will take the interjection from the bestest minister in the world and thank him for it. Congratulations—

Mr Hunt: I think you are the best shadow parliamentary secretary in the world. We're batting for you.

The DEPUTY SPEAKER ( Mr Goodenough ): Order!

Mr HUSIC: That is equally high praise, Minister, as that praise of your good self. I thank you very much for it, world's bestest minister. Thank you very much.

Ms O'Dwyer interjecting

Mr HUSIC: And, Assistant Treasurer, you have been notable in your performance in the last two weeks as well.

The problem with the government is that it is all about style. It is never about the hard decisions, and, when it is about the hard decisions, it is about the hard decision to take a scare campaign to the next level. That is why we get this type of flimsy proposed legislation put before us. We are not going to oppose it—of course not; it is about additional revenue—but, if they were fair dinkum about tackling this problem, they would look to the pricing that has been foisted upon Australian consumers and small businesses and the way in which they have been hit by the pricing approach that has been used. We do not get that; it is wrong.

I note in the chamber the presence of the member for Hughes, who, while we have differences of opinion, I know is a very strong advocate for small business with his previous advocacy background and the representational positions that he held. I am surprised that, on their side, they have not taken this issue up with gusto. I do have to say, though, that the member for Ryan, when she was a member of the Standing Committee on Infrastructure and Communications earlier in this parliament, also expressed concerns about the way in which pricing was handled by those big tech giants that operate in this country—but, again, nothing was done. Like I said, Malcolm Turnbull, the Prime Minister, the member for Wentworth, sat on that report when he was the communications minister. He did not respond to a parliamentary committee inquiry that detailed evidence of these higher costs. He has not taken any action to reduce those costs and see those costs flow through the broader economy, but the government moved super-fast to demonstrate, in some weak, limp effort, that they are tackling multinationals. Their big response is: 'We're going to impose the GST'. They hit young people who are accessing the internet to have digital downloads of the types of products and services that they want. As I said, it is simply farcical.

We will see if evidence demonstrates that their moves, for instance, to lower the threshold at which the GST is paid bring in more revenue than the cost of actually enforcing the system. Let us see if that works. A 2009 Productivity Commission report suggested you would not be able to achieve that. Let us see if they actually come through with the goods and are able to make more money out of lowering the threshold than the costs attributed to being able to follow this up. I remain a sceptic as to whether or not that will occur. Bear in mind that when they drop that threshold they are doing it to tax people more—this is from a government that said they were about lower taxes, not higher taxes. They will prevent people from being able to search out savings online for products and services they want, because they have now extended the breadth of the GST to that activity. So they are making people pay more and breaking a promise about lower taxes in the meantime.

Retailers will, obviously, cheer it. I have had a difference of opinion with retailers about this for some time. The internet has been able to completely smash the way in which production and distribution occur and has been able to deliver lower prices. That is the impact of disruption: changing the way that businesses work and delivering services at cheaper cost. From a government that is supposed to be pro-innovation and, particularly, from a Prime Minister that is supposed to be a champion of innovation, we often see decisions being taken that fly in the face of innovation. We have said that we will not stand in the way of this bill. We will support it, but I wish there was as much vigour to stand up for people.

This is quite unfair for young Australians who do not get a vote. They expect us to take decisions and actions that will help them at a time when they do not have the vote, because they cannot change a government on the basis of inaction, or action in particular ways that hurt them. Young Australians would expect that we would be able to deliver for them. Given the constraints on their disposable income, they use the internet to access products and services and digital downloads at a price that is cheaper for them. It would be nice to see a government actually stand up for those people who do not have a vote; not just chase votes but do the right thing for all Australians, regardless of their ability to cast a vote. I certainly would expect that the government do that and stand up for them, but, as evidence has shown, as history has shown, as their track record has shown, the government do not do it. The government figure young people do not have a vote, so they do not have to work hard for them at all. That is unacceptable. I have continually raised this issue on their behalf because I want to give them a voice in this place when they have had those concerns. I also want to give a voice to small businesses. When they look overseas and see the types of products that can be accessed online and at a price way cheaper than they have been charged here in Australia, I would imagine small businesses deserve a fairer go as well.

I will leave my comments at that. But, again, I call on the government to respond to the Productivity Commission report. It has been out for years, and those opposite have done absolutely nothing on it.

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Ed Husic MP
Federal Labor Member for Chifley


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