Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Hansard source

I will, Mr Deputy Speaker Adams, and I, too, respect your contribution to this place over an extended period of time. I would just make the point that one of the reasons there is an enormous backlog in taxation bills before this place—in fact the bills are not even getting to this place—is that there has been enormous turnover in the number of assistant treasurers in the government. There could be no other explanation. How could we have assistant treasurers making announcements about tax changes, creating uncertainty in the business community and yet not being able to deliver the legislation in this place? How does that happen? How could a government be so incompetent?

At any rate, because we are endeavouring, from opposition, to try to repair just a touch of the damage that the government has inflicted in relation to taxation policy, we are going to support the schedule proposed to delay the streaming rules for MITs.

Schedule 5 seeks to apply an income test to the rebate for medical expenses from 1 July 2012. This measure was announced in last year's budget by a government running out of money. The rebate for medical expenses provides taxpayers with a non-refundable tax offset for out-of-pocket medical expenses—which are eligible medical expenses incurred during the year, less available reimbursements from government or private health insurance—above the claim threshold.

The current claim threshold is $2,120 per year for all taxpayers, which is indexed by CPI, with net expenses exceeding this threshold giving rise to a tax offset or rebate worth 20 per cent of the excess above the claim threshold. The parameters of the new income test will generally align with those for the Medicare levy surcharge. For singles with an adjusted taxable income above $84,000, or, for married couples, above $168,000, the claim threshold will instead be $5,000 and the tax offset or rebate will be worth only 10 per cent of the excess above the threshold. The income threshold increases by $1,500 for each dependent child after the first.

This is another tax grab from an imprudent government that cannot seem to deal with its addiction to spending. This means that the Labor Party, since coming to government, has introduced or increased 27 taxes in just five years. Here is another one.

Schedule 6 of the bill makes changes to the 1997 income tax act following the High Court decision in Commissioner of Taxation v BHP Billiton Limited. Contrary to the original intent of the tax law, this decision distinguished between explicit and implicit contractual arrangements in relation to limited recourse debt and the deductibility of capital allowances. To give effect to the original policy intent, this schedule clarifies the definition of 'limited recourse debt'. So we support this initiative.

The changes within schedule 7 of this bill seek to amend the Fringe Benefits Tax Assessment Act in order to remove the concessional fringe benefits tax treatment for in-house fringe benefits accessed through salary packaging. In-house fringe benefits arise when employees receive goods or services from their employer that are identical or similar to those provided to customers by the employer in the ordinary course of business. Quite clearly, the government continues to reduce and eliminate concessions in the FBT system, and it continues to look, rather desperately, for more revenue. This is just another tax grab from a government running out of money. Schedule 8 of the bill makes miscellaneous amendments to tax laws and regulations affecting superannuation and tax legislation generally, and we do not have any issue with those particular points.

So, as I have mentioned, the coalition will be moving an amendment to excise schedule 1 and schedule 3 from the bill. And, as the member for Lyons would know, it is important to give certainty and stability to Australian taxpayers; I think he would know that. He would also know that only the coalition could do that, and only the coalition is prepared to be consistent and predictable when it comes to taxation policy. So we are moving to excise schedule 1 on the basis that we fear unintended consequences will arise from making tax-exempt the payment of large native title benefits to individuals. In the long term—and we do focus on the long term—we believe this will be contrary to the development goals for Indigenous policy. The changes within schedule 1 also violate the key tax principle, as I said, of horizontal equity. The measures contained in schedule 3 are linked to the government's failed mining tax, and we will move to excise this schedule from the bill.

If coalition amendments to remove schedules l and 3 from the bill are not successful, then the coalition will not oppose the bill's passage through the parliament because, ultimately, we aim to be constructive and we want to try to help the government fix its massive self-imposed budget mess. We are feeling incredibly magnanimous when it comes to this, because they have got themselves into a hole. We understand that the easy politics would be to oppose everything, but we are not going to do that, and we do not do that.

Over 86 per cent of the legislation that has passed through this place has been supported by the coalition, and as you, Mr Deputy Speaker Adams—or more particularly, you, as the member for Lyons—would know, the inflated rhetoric from the Labor Party about negativity is just a little unfair given that we have supported 86 per cent of the legislation that has passed through this place. Here is another classic example: we are trying to improve the legislation, we are trying to improve the government's bottom line, but, despite our best attempts, I fear that we will fail at that. Ultimately, the only way we are going to improve the state of the nation's economy and the government's budget is with a change of government, and I am sure the member for Lyons would agree with that.

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