Repeal Day Bill 2014


Senator Seselja: (Australian Capital Territory) (18:34): I am very pleased today to be speaking in support of the Treasury Legislation Amendment (Repeal Day) Bill 2014. As I made clear yesterday in a number of contributions, there are a number of important achievements of this government in the last 16 months. The repeal day and the repeal of unnecessary regulations are a part of that. I will go through some of those achievements before I go into the detail of the bill and the reasons why we in the coalition actually believe in getting rid of unnecessary regulations.

I know that there are some other parties in this place who believe that. I think it is fair to say that Senator Leyonhjelm and the Liberal Democrats support getting rid of unnecessary regulations. I think it is fair to say that Bob Day and Family First support that. I think it is fair to say that Palmer United Party senators support less regulation in some areas. We certainly would look forward to working with a number of them. If you were to quiz Nick Xenophon on his stated support for small business, you would expect that he would want to see us get rid of unnecessary red tape, along with Senator Madigan and others. I do not know what Senator Muir's stance is. I expect that he would have an open mind on it. But we do not see any evidence of support generally for the principle of reducing unnecessary, burdensome regulation, certainly from the Labor Party and the Greens. We simply do not see it. When we saw the Labor Party and the Greens in coalition government together, what did they do? They just added regulations. In fact, they did not just add regulations; they actually prided themselves on the amount of legislation that passed, which often imposed new burdens on Australian business.

Going to some of the coalition's achievements, we have repealed the carbon tax, which Labor wants to bring back. Repealing the carbon tax lowers people's costs. It lowers household costs and business costs. We have repealed the mining tax, which made very little money. Of course, a lot of spending went with that. We have stopped the boats and the deaths at sea. We have signed free trade agreements with some of our major trading partners. It is all about growing jobs, growing the economy and supporting Australian business. And we are, of course, getting on with the job of fixing the debt and deficit legacy that was left to us by the former Labor government.

One of the most important and successful ways we are doing this and looking to grow jobs is through reducing the burden of unnecessary red tape on business—red tape that hurts productivity, halts investment and innovation, and stifles job creation. Since the 2013 election, the coalition government have more than doubled our election target of red-tape reduction, announcing over 400 measures across the whole of government and a net reduction of over $2.1 billion in compliance costs. As part of the 2014 spring repeal day on 29 October, the government continued this work by removing nearly 1,000 pieces of red tape and over 7,200 pages of legislation and regulation. This continued the work of the first repeal day, in March, when the government removed over 10,000 pieces of red tape, 50,000 pages of legislation and regulation and over $700 million in compliance costs.

In stark contrast, as I alluded to earlier, Labor introduced more than 21,000 additional regulations. It was something they seemed to take glee in. They seemed to pride themselves on the amount of legislation they passed. We happen to believe that not all legislation is good legislation—that simply passing legislation through the parliament does not make for a successful government and does not make for a stronger economy if that legislation adds burdens rather than takes burdens away. That is the stark difference between the way we do things and the way the former, Labor government did things. Of course, those 21,000 additional regulations were despite Kevin Rudd's promise of a 'one regulation in, one regulation out' policy, and the then small business minister, Craig Emerson, saying that Labor would 'take a giant pair of scissors to the red tape that is strangling small business'. They never did that, unfortunately. They in fact just added to that burden, and we are seeking to lift that burden from Australian small businesses and Australian business generally.

It is important to remember that some regulation is important. We are not against regulation that is about a safer Australia and about protecting our community. But we know—we hear it from business consistently—that there is in many cases just far too much of it and much of it is unnecessary, much of it is over the top and much of it is burdensome. And we know that, when there is too much unnecessary regulation and red tape, that hurts the ability of business to employ people. It also hurts the ability of small business people and family business owners to spend more time with their families, because they are constantly engaged in the paperwork of dealing with that red tape.

We saw that our multifactor productivity fell in 2013, after essentially flatlining for a decade. In 2014, Australia ranked 124 out of 148 countries for burden-of-government regulation in the World Economic Forum's Global Competitiveness Index. We have a long way to go before we are where we want to be on that Global Competitiveness Index. We want to be in a place where we attract business to this country and where, when businesses invest their money or when businesses start and they look to employ people, we find ways of supporting those decisions and making them easier—making that decision to take on an extra staff member that much easier. That is absolutely critical to the economic task that faces our nation. If we want business to employ people, to continue to employ more people, to continue to grow, to become profitable so they can invest those profits so they can employ more Australians, then we need to work with them. That is what the coalition are seeking to do through things like reducing red tape and cutting unnecessary taxes such as the carbon tax and the mining tax.

The Productivity Commission has estimated that regulation compliance costs could amount to as much as four per cent of Australia's GDP. So it is absolutely critical that we address these issues—and that we do not just do it once and we do not just do it twice. We have committed to doing at least two repeal days every year where we will see unnecessary burdens being lifted from business in this country.

This bill forms part of our whole-of-government commitment to repeal counterproductive, unnecessary and redundant legislation and regulations. The measures contained in this bill improve and simplify the operation of laws relating to taxation, superannuation and shareholdings in certain financial sector companies. The bill contains a number of important measures: it repeals the pay-slip reporting provisions in the superannuation law that would have increased the regulatory burden on employers beyond that currently imposed under the Fair Work legislation; it simplifies taxation laws by removing inoperative provisions, consolidating duplicated provisions and moving longstanding regulations into the primary law; it reduces the regulatory burden on the associates of individuals seeking to obtain a shareholding of more than 15 per cent in certain financial sector companies; and it rewrites the definition of 'Australia' into a single location in the tax law for use across all the tax laws in a simple and coherent form.

The first element of this bill is the employer reporting of superannuation contributions on pay slips. This provision will provide certainty to employers that they do not need to prepare for significant changes to their pay-slip software in respect of superannuation reporting. There are duplicative provisions from the superannuation law that allow for regulations to be created prescribing additional information that can be included on employee pay slips on superannuation contributions. These will be repealed. Labor had intended these regulations to specify that employers had to report on pay slips the amount of superannuation contributions and the date on which the employer expects to pay them. Labor, however, never made the regulations.

This measure will not affect the information employees currently receive on superannuation contributions on their pay slips. Under the Fair Work Act, employers are already required to at least report, on an employee's pay-slip, details of employee superannuation entitlements that accrued during the pay period

If employers were required to report actual contributions and payment dates, they would need to invest in major upgrades in their software. The benefit for employees would be marginal. Most employers pay their superannuation as they should, and, even if reporting actual superannuation contributions on payslips was mandated, it defies reason that an employer not complying would decide to voluntarily report that they were not complying. Also, employees may not take regular notice of what is reported on their payslips. I also note that 70 per cent of employees who do not receive their superannuation entitlements from their employer wait until they have left that job to make a complaint to the Australian Tax Office. This may be because they do not want to jeopardise their jobs, and changing the information on superannuation contributions required to be reported on payslips is unlikely to change that.

The ATO investigates every complaint received about unpaid super. Their risk analysis work allows the ATO to target actions against high-risk industries and employers. Employees can now also typically check online via their superannuation fund whether their employer is making regular superannuation contributions without having to wait for an annual statement. It is exactly this sort of regulation that this government is committed to providing so businesses do not need to deal with duplication and can get on with growing the economy.

We also have the consolidation and repeal of tax provisions. This measure simplifies the taxation laws by consolidating duplicated taxation administration provisions contained in various taxation acts into a single location in a single act. It also repeals spent or redundant taxation laws, such as the older harsh penalty regimes, and moves longstanding regulations into the primary law. One item in this bill has to do with the power of the Commissioner of Taxation to obtain information. Currently, there are over 10 different acts relevant to what information the commissioner can obtain, and, if a taxpayer wants to know what information that might be, they need to refer to all of those acts to get to the bottom of it. As a result of these amendments, a taxpayer will now only have to refer to schedule 1 to the Taxation Administration Act 1953.

The current tax law is complex, difficult to understand and frequently costly to comply with. For example, the current provisions dealing with tax file number and investment income reports that investment bodies provide to the Commissioner of Taxation are overly prescriptive and difficult to comply with. They lack the flexibility to allow the commissioner to continue to pursue further ways of reducing compliance costs. Rewriting the tax file number and investment income reporting will help give the Commissioner of Taxation flexibility to facilitate modern reporting methods, which should reduce compliance costs for investment bodies.

Overall, the changes will result in a material reduction in the size of the taxation laws—with one or two sections replacing in excess of 50 existing provisions. Removing inoperative provisions, consolidating duplicated provisions and moving longstanding regulations into the primary law does not alter any of the current tax policies. However, it does make the tax law easier to use and easier to comply with. Tidying up our tax laws in line with good legislative practices is an important part of the care and maintenance of our tax system. Once again, this reduces the burden on businesses who do the right thing and get caught up in unnecessary regulations.

We also have measures in relation to shareholding approvals in certain financial sector companies. These measures take away an unnecessary burden on the associates of a person—for example, a person's partner, relatives or related companies—who is seeking approval for a shareholding of greater than 15 per cent in certain financial sector companies such as banks and insurance companies. At present, when a person is seeking a shareholding of more than 15 per cent of a financial sector company, they must seek approval from the Treasurer for the shareholding. The associates of the person must also seek approval from the Treasurer for the shareholding as the Financial Sector (Shareholdings) Act 1998 deems the shareholding of the associate to be the same as that of the person seeking the more than 15 per cent shareholding. This approval requirement applies to an associate even where the associate has no actual shareholding in the company. The measure removes this technical legislative trap that imposes an unnecessary regulatory burden.

The changes in this bill do not compromise the examination of a shareholder's controlling interest. Associates with a shareholding are still required to be considered as part of the main applicant's shareholding to determine if they need to seek approval from the Treasurer for the shareholding. In addition, the Treasurer retains authority to block shareholdings where practical control can be asserted by an associate and the Treasurer is satisfied that it is in the national interest that the shareholding be divested.

Finally, this measure rewrites the definition of 'Australia' into a single location in the tax law for use across all the tax laws in a simple and coherent form. This measures addresses the problem that the current definition of Australia for taxation purposes is complex, overly detailed and expressed differently in different parts of the taxation laws, despite the fact that the laws are intended to achieve a simple and largely equivalent result. Currently, if an individual working on an oil platform near Australia wanted to determine whether or not they had to pay Australian income tax, they would be required to navigate through myriad provisions in up to 13 different Commonwealth acts. To deal with this unnecessary complication, the amendments consolidate and standardise in one place the definition of Australia for most tax purposes.

Rewriting the tax laws, on average, has reduced the size of the provisions being rewritten by two-thirds. This assists taxpayers to better understand and comply with the laws, reducing compliance costs. This takes another step towards achieving a single income tax assessment act for Australia.

It is clear to me and it is certainly clear to members of the coalition that encouraging Australian businesses to thrive and encouraging Australian businesses to employ more people—surely all of us would share that goal—is very, very important. If we want to see more Australians in work, more Australians with the opportunity to work and more innovation in our businesses for the betterment of Australians and, in fact, the wider world, then we cannot tie the hands of businesses behind their backs. When I speak to businesses, big and small, in this country, one of the first things that they raise is the fact that there is too much unnecessary, burdensome regulation, which in many cases is simply as a result of poor legislation. Sometimes it is poorly drafted legislation; sometimes parliaments have been too overeager to regulate things which do not need to be regulated in the way that they are. So I am very pleased that the coalition has taken a different approach to this, that instead of talking about a one-in one-out regulation as we saw from those opposite when they were in government—and of course they laid on thousands of pieces of legislation and thousands of extra regulations during their time in office—we have committed to regular repeals where we put on the agenda the needs of Australian business and, in particular, the needs of Australian small business. If we want them to continue to employ people, we should not add burdensome regulation and red tape.

Achievements such as getting rid of the carbon tax, getting rid of the mining tax, signing free trade agreements and getting rid of unnecessary and burdensome regulations are all directed broadly at the same end. They are broadly about growing our economy, making it easier to do business in this country, ensuring that more Australians have the opportunity to work and ensuring that Australians who are underemployed get the opportunity to have more hours. These are the goals of these policies. We have seen significant successes in areas such as the repeal of the carbon tax and the repeal of the mining tax. We have already seen much of the burdensome red tape coming off. But, of course, there is much, much more to do. This legislation is a part of the package, and I commend it to the Senate.