Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (09:01): I move:

That this bill be now read a second time.

This bill amends taxation laws to allow small businesses to change their entity structure without incurring a capital gains tax liability at that time.

Small businesses account for 97 per cent of all Australian businesses. They employ over 4.7 million people and they produce over $340 billion of economic output per year.

To support this vital sector of the economy, the government announced a $5.5 billion Growing Jobs and Small Business package in last year's budget.

This parliament has already passed legislation for the 1.5 per cent small company tax cut; the unincorporated small business tax discount; the immediate deductibility of assets under $20,000; and the immediate deductibility of professional expenses measures.

In addition, from 1 April this year, small businesses that provide their employees with qualifying work related portable electronic devices, will be allowed a fringe benefit tax exemption. This was another measure announced in the Growing Jobs and Small Business package, and passed by this parliament.

This bill contains the final tax measure from the Growing Jobs and Small Business package.

Schedule 1 allows small businesses to change the legal structure of their business and have the capital gains tax liability disregarded and deferred until eventual disposal.

Sometimes a small business will start operating within a legal structure that is not necessarily best suited to the owner's needs. This can occur because they did not receive advice or the advice was inadequate or because the business has developed beyond the original aspirations of its owners.

For small business owners who find that they are running a business through the wrong entity structure, there can be additional administrative burdens and cash flow impediments. To remedy this situation, a small business owner could choose to restructure their business, but this restructure is currently likely to require the owner to pay capital gains tax on the assets of the business even though there is no change in its ownership.

This aspect of the tax law means that small businesses are effectively locked into the structure they choose at the inception of their business at a time when many small business owners do not have the time or money to seek professional advice on the best legal structure for their business.

To alleviate this problem, this measure will allow small businesses to roll over assets from one entity to another, provided the underlying economic ownership of the assets remains unchanged.

This bill has a cost to revenue of $40 million over the forward estimates period and, along with the other tax measures announced in last year's budget, will provide over $5 billion of support to Australia's hard-working small business owners.

The government are proud of their commitment and we have shown to small businesses through this package of measures that we are committed.

Small businesses not only provide income for their families and jobs in their communities, but have great ideas and great visions that can change our country and in some cases can conquer the world. Australia's new free trade agreements present a major opportunity for these businesses to expand into new markets.

This government has a policy focus on small business.

We want small business to be as strong as it can be and for the hard-working people in small business to succeed.

We must continue to foster an entrepreneurial culture and reduce regulatory barriers so that people can take advantage of the opportunities afforded by a growing, diversifying and adapting economy.

This means getting the balance right on tax, to make sure our tax system is not putting obstacles in the way of our ability to innovate, to adapt and to diversify.

We look forward to seeing many more businesses across the country as the benefits of this initiative are felt.

Full details of the measure are contained in the explanatory memorandum.

Debate adjourned.

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (09:06): I move:

That this bill be now read a second time.

Today, the government introduces the additional estimates appropriation bills. These bills are:

Appropriation Bill (No. 3) 2015-2016; and

Appropriation Bill (No. 4) 2015-2016.

These bills underpin the government's expenditure decisions.

Appropriation Bill (No. 3) 2015-2016 seeks approval for additional appropriations from the Consolidated Revenue Fund of just over $1.3 billion.

I now outline the significant items that are sought in this bill.

First, the bill will provide the Department of Immigration and Border Protection with just over $447 million, this reflects additional funding for enhancing the management of the onshore immigration detention network; further support for refugee resettlement arrangements; and additional support for the accommodation and processing of asylum seekers.

Second, the bill would provide the Social Services portfolio just over $277 million. The Department of Social Services would receive just over $102 million primarily to provide support services to resettle an additional 12,000 refugees who are fleeing the conflict in Syria and Iraq. The bill would also provide the National Disability Insurance Agency with just over $108 million for the transition to the full National Disability Insurance Scheme, as agreed with New South Wales, Victoria, South Australia and Tasmania. The Department of Human Services would also receive just over $11 million for Addressing Welfare Reliance in Remote Communities, which will provide increased incentives for job seekers to work and to strengthen the mutual obligation framework in Community Development Program regions.

Third, the bill would provide the Department of Defence with just over $186 million, largely reflecting supplementation for foreign exchange movements and the net effect of the reallocation of funds between operating and capital costs.

Details of the proposed expenditure are set out in the schedule to the bill and the portfolio additional estimates statements tabled in the parliament.

I commend this appropriation bill to the House.

Debate adjourned.

Mr FRYDENBERG (Kooyong—Minister for Resources, Energy and Northern Australia) (09:08): I move:

That this bill be now read a second time.

Appropriation Bill (No. 4) 2015-2016, along with Appropriation Bill (No. 3) 2015-2016,which was introduced earlier, are the additional estimates appropriation bills for this financial year.

This bill seeks approval for appropriations from the Consolidated Revenue Fund of just over $905 million for

2015-16.

I now outline the significant items provided for in this bill.

First, the bill would provide the Department of Infrastructure and Regional Development just over $385 million reflecting, primarily, additional funding for the Roads to Recovery program to help local government and councils maintain Australia's roads.

Second, the bill would provide the Department of Health with $125 million to be used as capital by the Biomedical Translation Fund following its establishment. The fund will be used to invest in promising medical discoveries and will complement the Medical Research Future Fund through the commercialisation of health and medical research.

Third, the bill would provide for the Australian Taxation Office just over $74 million largely for implementing single touch payroll reporting and for improvements to data and analytics infrastructure.

Details of the proposed expenditure are set out in the schedules to the bill and the portfolio additional estimates statements tabled in the parliament.

I commend this appropriation bill to the House.

Debate adjourned.

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (09:11): I move:

That the amendments be agreed to.

Mr STEPHEN JONES (Throsby) (09:11): The bill, when it was originally presented to this House in the last session of 2015, attracted for the most part the support of the Labor opposition. There were a set of proposals that we found problematic. They were proposals to make some significant changes to the composition of the board of Food Standards Australia New Zealand. The board's key decision-making body in FSANZ is charged with developing and implementing the food code, and Labor has consistently defended the balance of this board for over 15 years. It has a public health focus and its composition is finally balanced.

The amendments that we put at the time that the bill was originally introduced were refused in this House. Amendments in similar forms were put in the other place, and I am happy to advise the House that those amendments, identical to the ones that were refused in this place, were accepted in the Senate. We thank the crossbenchers and eventually the government for accepting those amendments, and they enjoy the support of the opposition.

Question agreed to.

Mrs GRIGGS (Solomon) (09:13): The response to the government's plan to curb excessive credit card fees has been broad, considered and overwhelmingly positive. I would like to spend some time going through some of the commentary that followed the Prime Minister's announcement last October that the government would act on disproportionate card surcharges.

Under the headline 'Plan to rein in excessive surcharges on plan payments,' John Collett in Fairfax pointed to widespread community frustration at the current free-for-all fees regime. On 25 October last year, he wrote:

It's a common trap. Consumers are seduced by the headline price of an airfare or concert ticket only to find themselves slugged with a hefty booking fee for the privilege of paying with a credit or debit card.

The price of convenience is an astonishing $1.6 billion a year. That's how much Australians pay in surcharges for card payments, according to a survey commissioned by MasterCard last year.

If you think it's too much, you are not alone. Consumer organisation Choice has been railing against excessive surcharging for years, while a Change.org petition calling on Jetstar to drop its surcharge of $17 for a return fare has collected about 110,000 signatures so far. Now we might finally see some action—

John Collett writes—

The Turnbull government, as part of a broader response to an inquiry into the financial system, announced last week it would crack down on excessive surcharges. The government announced it would legislate a ban on surcharges that exceed the "reasonable costs" faced by merchants in accepting cards. The move is likely to have bipartisan support so it's going to happen, it's a question of when, and what it will mean in practice. No one disputes that there is some cost to the merchant of accepting cards, the question is what is the "reasonable cost"? Choice has estimated that MasterCard or Visa transactions cost about 1 per cent of the transaction total to process while Amex and Diners Club are more expensive, up to 2 per cent.

He continues:

Choice has described Qantas and its low-cost offshoot, Jetstar and Cabcharge as among the worst offenders in excessive surcharging of their customers.

I will deal with the question of reasonable cost later in this debate, but Collett goes on to detail in his article some of those excessive costs:

Virgin Australia charges $7.70 a ticket whether paid by credit card, debit card or PayPal. The surcharge can amount to about 8 per cent on top of the typical cost of a Sydney to Melbourne flight. Qantas charges $2.50 for payment for domestic tickets, which includes New Zealand, paid by debit card. It charges $7 for domestic tickets paid by credit card. For international tickets, the surcharge is $30 by credit card and $10 by debit card.

Other media outlets have mirrored the positive line taken by Fairfax. On 20 October, under the headline 'Turnbull government to crack down on excessive credit card surcharges', online newspaper The Guardian wrote:

The government has agreed to take action to improve fee and surcharging arrangements for credit card transactions, which could reduce the costs faced by consumers when they buy products at shops and restaurants.

Also on 20 October, under the headline 'Prime Minister Malcolm Turnbull declares an end to credit card gouging', News.com wrote:

One of the most frustrating shopping experiences will soon be a thing of the past, as the Australian Government flags an end to unfair credit card surcharges. Prime Minister Malcolm Turnbull has declared that the fee charged at the cash register for using a credit card must be no more than the merchant's cost of processing the transaction—typically a mere 0.5 per cent. Many retailers charge at least double this amount, and in extreme cases the surcharge can be as much as 20 times higher, in a practice that has infuriated customers. Treasurer Scott Morrison said that credit card surcharges 'have to pass the fair dinkum test'.

The fact that the media was virtually 100 per cent behind the government's actions is a sign that something desperately needed to be done to curb credit card fee gouging.

The survey referred to earlier was initiated by Klaus Bartosch and, as of late last night, it had collected 110,855 signatures. That, and responses to David Murray's financial system inquiry report, where 5,000 of the 6,500 submissions referred to the surcharge, signal a win for people power and the collective will over dodgy business practices.

While this legislation sets out to put an end to fee gouging, the government acknowledges the need for businesses to recoup fees accrued from customer credit card payments. If, like me, you thought credit card surcharges had been around forever, then think again. As a point of history, it is interesting to note that credit card surcharges were only introduced in Australia back in 2004. An article in online news magazine The Conversation said that, in 2003, the Reserve Bank of Australia introduced a series of payment system reforms, including the elimination of the pre-existing no-surcharge rules. This meant retailers could recover the cost of accepting a credit card from a customer who chose to use the card. What the Reserve Bank failed to do was limit the size of the surcharge the retailer could set. Not surprisingly, given the success of surcharges in Australia, the RBA rules have been followed all around the world.

The Conversation makes a strong case for the retention of credit card surcharges but at a rate commensurate with the cost to the retailer of taking the credit card payment. Credit cards, it says, are relatively expensive payment tools compared to other card forms such as debit cards and, of course, cash. Under a no-surcharge rule, it follows that there would be excessive use of credit cards because of their popularity with consumers because they are very easy to use. It makes sense that customers would choose to use a credit card, because the cost would be shared at the price-point by people who pay cash or use debit cards. This excessive use would further jack-up costs for businesses, which in turn would be passed on to consumers. It is a vicious retail circle. While this shared cost would benefit the credit card user, it would be patently unfair for other, non-credit card, consumers.

Surcharging changes this by levying a fee on the credit card user rather than unfairly spreading it to all customers. But, as is now clear, it is the level of the fee that has become of such concern for potentially millions of Australians who make purchases with their credit cards. The Murray inquiry's recommendation was simple and succinct. Recommendation 17 said government should:

Improve surcharging regulation by expanding its application and ensuring customers using lower-cost payment methods cannot be over-surcharged by allowing more prescriptive limits on surcharging'.

In other words, we should protect the credit card user from businesses that take too large a cut from the credit card transaction while also protecting the consumer who does not pay by credit card.

And this is exactly the balance the government has sought in the legislation that we are debating today. The Competition and Consumer Amendment (Payment Surcharges) Bill was introduced by the Assistant Treasurer during 2015's final parliamentary sitting, with the very clear objective of limiting surcharges to no more than cost recovery or the cost to the business of the transaction fee.

Contained within the second reading speech was an extraordinary set of figures, and I would like to share them with you. Each month around $45 billion in purchases are processed in Australia through more than half a billion card transactions. It does not take much imagination to realise the possible scope of savings through shutting down what the Assistant Treasurer referred to as the 'widespread problem of excessive surcharging'. This measure, in other words, will provide considerable savings overall to Australian consumers.

The laws will be given enforcement muscle through the Australian Competition and Consumer Commission being responsible for enforcing this ban to ensure that consumers are treated fairly. The Reserve Bank of Australia will play a key role in setting the costs a merchant is permitted to recover by surcharging. A few problem industries, such as ticketing, airline and travel industries, have created most of the consumer complaints and distorted price signals in the payments system. The enforcement muscle comes in the form of heavy fines to businesses that seek to profit from consumers who pay with credit cards.

The ACCC will be able to require merchants and other payment system participants to provide documents or information to help it assess the costs incurred against any surcharges imposed by the merchant. It will be an offence to fail to provide the documents or information requested by the ACCC. If the ACCC forms the view that a merchant has engaged in excessive surcharging, it may issue an infringement notice, including a penalty for listed corporations of up to 600 penalty units, currently $108,000, for each alleged contravention.

This bill will sit alongside other existing legislation designed to protect consumers from dodgy business practices. Australian consumer law requires that pricing is communicated to consumers in a manner that is not misleading or deceptive and that allows businesses to compete on a level playing field. The ACL states that prices presented to customers must state the total price of the good or service as a single figure, with the total price to be displayed at least as prominently as any part price. This ensures that consumers can easily compare the prices of different goods and services.

'Drip pricing' occurs where a headline price is advertised at the beginning of an online purchase process and additional fees and charges, which may be unavoidable for consumers, are incrementally disclosed. On 17 November 2015, in action pursued by the ACCC, the Federal Court found that Jetstar and Virgin Australia had in some specific instances engaged in drip pricing through misleading and deceptive conduct and through making false or misleading representations about the price of particular advertised airfares. In October 2014, Ticketek and Ticketmaster adjusted their pricing practices in response to concerns raised by the ACCC regarding drip pricing. In April 2015, media reports suggested that Aldi had not adequately disclosed surcharges to customers at some stores despite adjusting their disclosure practice in August 2014 after concerns raised by ASIC in relation to their powers regarding misleading and deceptive conduct in the provision of financial services.

These are the practices the government hopes to stamp out with the passage of this bill. Addressing excessive card surcharging is a priority for the Turnbull government, and this is reflected in the speed with which these measures have come before parliament since the release of our response to the Financial System Inquiry. I commend the bill to the House.

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (09:26): I want to thank all members who have contributed to this debate in the parliament. It has been a good debate, and a constructive one. Each month, around $45 billion of purchases are processed through more than half a billion card transactions. There is no doubt that consumers and businesses are both better off because of the convenience, security and flexibility offered by cards and other alternative payment methods. This is not to say that merchants do not face additional costs in accepting certain types of payments. Recovering these costs is not unreasonable. Profiteering, however, while pretending to recover costs, is misleading and frustrating for consumers and undermines the efficient operation of the payment system as a whole.

Addressing excessive and unfair payment surcharging by merchants is an important part of the government's financial system agenda in response to the Financial System Inquiry chaired by David Murray AO. The inquiry highlighted that this is an important issue from both a consumer fairness and a system efficiency perspective. Surcharging of payments allows merchants to send a price signal about the relative costs of different payment methods. However, a surcharge is excessive when it is above the costs incurred by the merchant for accepting that payment. Excessive surcharges, sometimes up to 10 per cent or more, have generated substantial angst in the community.

This bill gives effect to the government's commitment to ban these excessive payment surcharges by merchants by amending the Competition and Consumer Act 2010. It also gives the Australian Competition and Consumer Commission the powers to enforce that ban with its usual suite of powers provided in the Competition and Consumer Act 2010. These excessive surcharges can give consumers a false impression that certain payment methods cost more than they actually do. The community raised concerns through the Financial System Inquiry that merchants are profiteering from excessive surcharges. As a result of the measures in this bill, the Australian Competition and Consumer Commission will be well placed to respond to excessive surcharges by merchants and protect the interests of customers.

As new, smart and innovative methods of payment are developed and rolled out in this digital age, the government wants to make sure that Australia has a system in place whereby it can compete on a level playing field. Innovations should not be subjected to inaccurate overstatements of their true costs to ordinary Australians through excessive surcharging. I commend this bill to the House.

The SPEAKER: The question is that the bill be now read a second time.

Question agreed to.

Bill read a second time.

Mr BANDT (Melbourne) (09:29): by leave—I move Greens amendments (1) to (17) together:

(1) Schedule 1, item 2, page 3 (after line 27), after subsection (2F), insert:

   (2G) In addition to the effect that this Act (other than Parts IIIA, VIIA and X) has as provided by another subsection of this section, this Act (other than Parts IIIA, VIIA and X) has, by force of this subsection, the effect it would have if:

   (a) each reference in Part IVD to an ATM transaction were a reference to an ATM transaction that occurs:

      (i) by means of a postal, telegraphic, telephonic, or other like service (including electronic communication); or

      (ii) by means of an automatic teller machine provided by a bank (other than a State bank), or any other institution engaged in banking, in the course of banking (within the meaning of section 51(xiii) of the Constitution); and

(b) each reference to a corporation included a reference to a person not being a corporation.

(2) Schedule 1, item 3, page 10 (after line 32), after Part IVC, insert:

Part IVD—ATM transactions

Division 1—Preliminary

55N Object of this Part

      The object of this Part is to ensure that:

   (a) account holders are not charged for ATM transactions made using automatic teller machines owned or leased by the persons with whom their accounts are held; and

   (b) amounts charged for other ATM transactions:

      (i) are not excessive; and

      (ii) reflect the reasonable costs of allowing a person to make an ATM transaction.

55P Definitions

      In this Part:

   ATM transaction means a cash deposit to, a cash withdrawal from, or an enquiry about the balance of, an account that is made by means of an automatic teller machine.

55Q Part not to apply to State banking

      This Part does not apply with respect to State banking that does not extend beyond the limits of the State concerned.

Division 2—Limit on charges for ATM transactions

55R Limit on charges for ATM transactions

No charges for ATM transactions made using own ‑branded ATMs

(1) A corporation must not, in trade or commerce, charge a person an amount (however described) for making an ATM transaction if:

   (a) the corporation is an ADI (authorised deposit-taking institution) for the purposes of the Banking Act 1959; and

   (b) the transaction relates to an account held by the person with the corporation; and

(c) the automatic teller machine used to make the transaction is owned or leased by the corporation.

ATM transactions made using foreign ATMs must not be excessive

(2) A corporation must not, in trade or commerce, charge a person an amount (however described) for making an ATM transaction that is excessive (see subsection (3)) if:

   (a) the corporation is an ADI (authorised deposit-taking institution) for the purposes of the Banking Act 1959; and

   (b) the transaction relates to an account held by the person with the corporation; and

(c) the automatic teller machine used to make the transaction is not owned or leased by the corporation.

(3) For the purposes of subsection (2), an amount charged for making an ATM transaction is excessive if the amount exceeds the amount permitted by a standard determined under section 18 of the Payment Systems (Regulation) Act 1998.

(4) For the purposes of subsection (3):

   (a) the Reserve Bank of Australia must ensure that there are at all times in force standards under section 18 of the Payment Systems (Regulation) Act 1998 permitting amounts for the purposes of subsection (3); and

   (b) the making of such standards is taken to be in the public interest; and

(c) an amount permitted for an ATM transaction must reflect the reasonable costs of allowing the person to make the transaction.

55S Acquisition of property

Scope

(1) This section applies to the following provisions of this Act:

   (a) section 55R;

   (b) any other provision to the extent to which it relates to section 55R.

Effect of provision

(2) The provision has no effect to the extent (if any) to which its operation would result in the acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) otherwise than on just terms (within the meaning of that paragraph).

(3) Schedule 1, item 4, page 11 (line 2), after "55B,", insert "55R,".

(4) Schedule 1, item 5, page 11 (after line 5), after subparagraph (ia), insert:

      (ib) section 55R;

(5) Schedule 1, item 6, page 11 (line 7), after "55B,", insert "55R,".

(6) Schedule 1, item 7, page 11 (line 9), after "55B,", insert "55R,".

(7) Schedule 1, item 8, page 11 (after line 12), after subparagraph (ia), insert:

      (iib) section 55R;

(8) Schedule 1, item 9, page 11 (line 14), after "55B,", insert "55R,".

(9) Schedule 1, item 10, page 11 (line 16), after "55B,", insert "55R,".

(10) Schedule 1, item 11, page 11 (line 18), after "55B", insert "or 55R".

(11) Schedule 1, item 12, page 11 (line 20), after "55B", insert "or 55R".

(12) Schedule 1, item 13, page 11 (line 22), after "55B", insert "or 55R".

(13) Schedule 1, item 14, page 11 (line 24), after "55B", insert "or 55R".

(14) Schedule 1, item 15, page 12 (line 3), after "55B,", insert "55R,".

(15) Schedule 1, item 16, page 12 (line 5), after "55B,", insert "55R,".

(16) Schedule 1, item 17, page 12 (line 12), after "55B", insert "or 55R".

(17) Schedule 1, item 18, page 12 (line 19), after "55B", insert "or 55R".

The minister, in summing up, said—I am paraphrasing slightly—that recovering costs is not unreasonable but profiteering is. That is a very good principle and it is one that, under these amendments, we are seeking to extend not just to credit cards but to ATM transactions. At the moment in Australian society you pretty much have no choice but to use a card. You use a card either to get your cash out of the bank or to make a payment. What the bill does—and this is why we are supporting it—is say: if the way you are making your payment is through a credit card then the merchant can charge you a fee for processing but they cannot profiteer out of it. Under this legislation, when it goes through, the merchant will only be able to charge a fee that reflects the cost to them of processing transactions et cetera. That is a good move. But what the bill does not do is tackle one of the other ways in which banks make hundreds of millions of dollars from people, which is through the $2 to $3 ATM fees that you see.

Most people now go to their own bank to get money out in order to try and avoid these $2 to $3 ATM fees. That is a good thing. People should not be charged for the privilege of accessing their own money. In modern society, you cannot get by without having a bank account. Banks get huge amounts of money put into their coffers with people's salaries, welfare payments and so on. If you go to your own bank to get money out you should not be charged for it. That is what most banks are doing now. That is a good thing, and it will be enshrined in law if these amendments are passed.

We all know there are many, many times when, despite your best efforts, you find yourself without enough cash in your wallet. It might be that the place you are wanting to purchase at does not take a card., so you cannot use payWave or you cannot use a credit card; or you might have some urgent purchase to make and you have nothing in your wallet and the only ATM nearby that you can get to is one that is not of your own bank. When you go to that bank to get money out you can be charged a fee of $2, $2.50 and sometimes even as high as $3. We know it is worse in many rural and regional areas. But what we also know is that the real cost to the bank for providing that service, of letting you get your money out even though it is not your own bank, is about 77c. The rest of the money is the cream on top of that, which the bank is making. Banks who are making world-leading record profits in this country should not be allowed to profiteer from people accessing their own money. You should have a right to access your own money from an ATM. If there is a cost because you are not going to your own bank but to another bank then let us do what this bill is doing for credit cards and limit the cost of the ATM fee to a reasonable cost to the banker for providing the service.

These amendments will allow a standard to be set. The RBA, the Reserve Bank of Australia, will set that standard with regard to the cost to the bank for recovering the cost of the transaction. So banks will not be left out of pocket by this amendment, but consumers will be better off. We are saying: let us take a very, very good principle that this government is applying to credit cards and also apply it to ATM fees. It is essential, because people are sick of seeing that $2 or $3 fee come up when they are getting their own money out. People are sick of being charged for the privilege of accessing their own money, because often they have tried their best to get to their own ATM and they just cannot for whatever reason.

What we also know is that these fixed fees hurt the poor and low-income earners more than everyone else, because they are the ones who are most likely to withdraw small amounts of money. When you take $20, $40 or $50 out the ATM, whacking a $2.50 fee on top of that is a much, much bigger impost on these people than it is on someone who is in a position to take out several hundreds of dollars at one particular time. So it is an equity measure as well.

Consumer groups and the Greens have been campaigning for years to rein in excessive ATM fees that are just another way for the banks to make money. When we remember that the big four banks are the most profitable in the world and are bringing in in the order of $30 billion profit combined, this is one small way that they could give back to the community. They could say: we are no longer going to profiteer from people getting access to their own money. I commend these amendments to the House. If the minister sincerely believes, as I am sure he does, in the spirit of these amendments for credit card fees, there is no logical reason not to extend them to ATM fees as well.

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (09:35): In addressing the amendments that the member for Melbourne has put forward, I would start by saying that I do not doubt his genuine sincerity in having a discussion about ATM fees. I do not necessarily think, though, that his advice to the banking industry would be well received. If the member for Melbourne were to open a bank on the principles he has outlined here in the House today and call it the Greens Bank, for example, and he were to run it at a loss—he sort of railed against banks making a profit—and he were to charge no fees for service and provide free money, I am not certain that there would be a rush from the Australian population to put their money into the Greens Bank. I am not sure his advice to the banking industry is really that accurate or that well regarded.

In terms of the series of amendments that he has put forward, the first point to make is that the Financial System Inquiry did not make a recommendation on ATM fees. This bill is about excessive surcharging by merchants—that is, where merchants are charging a fee that is not related to the cost of providing that service—which was found by the Financial System Inquiry to be a matter of concern. It is a problem that all Australians know about. It is a problem that they reported to the Financial System Inquiry. It is a problem that David Murray highlighted from the inquiry. It is a specific recommendation. This is why the opposition and the government are united in this endeavour. We do not want to see merchants surcharging excessively the public in an unrelated way to the actual fees for providing that service.

ATMs—and there are many ATMs around the country—and ATM fees might be a legitimate issue for discussion in another forum, in another context. It would not be good law. It would not be good process to start tacking on everybody's pet issue to the back of serious bills about reducing credit card surcharging. It would not be a good process. It has not been a recommendation of the Financial System Inquiry. There are whole different issues at play about the fees for service at ATMs. Of course there are different issues at play, because providing an ATM service does have a cost structure to it and, regardless of the member for Melbourne's fictional economic understanding of these things, it does cost money to provide terminals in place and banks ought to have the right to recover cost and to charge fees for service for accessing money. Fee for service of a business is a well understood principle. The levels and the nature of those fees, when they are applied or not applied, are legitimate items for discussion in a different forum and in a different way, and the government is open to a conversation about those things in the future.

This bill is so important, because we are addressing something quite different, and I do not think it is accurate for the member for Melbourne to conflate these two issues. There are different issues at play, and here specifically David Murray, a well-respected individual, has inquired into these issues at length. He has identified this as a specific problem, and of course the government has responded very quickly and strongly with this legislation to ensure Australians can now have confidence that when they are charged for the use of a credit card it is entirely 100 per cent related to the cost of providing that service. We can now all have confidence in that.

The government will not be supporting the amendments of the Greens in relation to this, and I urge them, if they want to have a conversation about this, to take it to the appropriate forum and the proper place and we can have that conversation.

Mr BANDT (Melbourne) (09:38): Obviously, there is not going to be support for these amendments in the House, so I will not delay the matter further—and I elaborated the reasons for supporting these amendments further in my second reading speech. But I will ask the minister whether he believes that the principle of cost recovery for fees—namely, that you should only be able to charge a fee, if it reflects the real cost to the person providing that fee—should extend to ATM fees as well or whether it is limited only to credit card fees?

Secondly, the minister said that now is not the appropriate time and that there are other appropriate forums. Does the government have any plans to tackle excessive ATM fees; and should we be expecting any moves from the government on this any time soon?

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (09:39): Again, I reiterate in relation to these amendments that this bill is about excessive credit card surcharging, so this is not a debate about ATM fees. There may be a proper time and place to have that debate and that discussion. Certainly it is the government's view that banks need to make a profit. There needs to be competition in our economy and a competitive and well-regulated banking sector. That does not mean that we seek to run every single aspect of the banking sector and every single aspect of their business.

There are good arguments in relation to the cost of ATMs, and this is a great era we are in, where people can access their own capital in more ways than ever before, whether they be through payWave services, digitally online or through an ATM terminal. And of course we have to continue to innovate and exploit that era, but we are not running the banks, I have to say, to the member for Melbourne. We regulate to ensure that there are strong capital and liquidity requirements in Australia and that we have confidence in the banking sector, but we do not want to be day-to-day bankers and run every single aspect of their business. This is not a bill about the banks; this is a bill about excessive credit card surcharging, which has been identified by the Financial System Inquiry as a serious area of concern to most Australians that needs tackling. The government agrees that merchants should not be allowed to add unreasonable and excessive charges on top of credit cards for people to access credit.

This is a worthy bill so we seek your support. We seek for you to drop these amendments so we can get this through. And if you have serious concerns, have carefully analysed every aspect of ATMs and other fees and want to present a report, go ahead and do it. But I suspect you would not be able to tell us today exactly the cost structure of providing 15,000 ATMs around the country. I suspect you would not be able to tackle it today, so rather than waste this House's time with an endless debate about something which is not what this bill is about, simply support what is—I think you would agree—a very worthwhile measure and something the government is doing that you can support. You do not always have to rail against the machine, Member for Melbourne. When the government does something worthwhile you can get up and say, 'This is worthwhile.' The Labor Party is on board, and the opposition is on board. This is a worthwhile measure supported by the Financial System Inquiry, supported by the opposition and supported by the Australian public. You can get up and have a nice day with us and say, 'Thank you for what we're doing' and 'What a good bill,' and then we can have another debate, if you want to do so.

Mr BANDT (Melbourne) (09:42): This government sure is full of people whose egos exceeds their capacity. The minister may not have heard, but in my second reading speech and opening words to moving my amendment I commended the bill and said we were going to support it. It does some very good things, and that is why we are giving it our support. And what I also said was, 'Can we extend this principle to ATM fees?' Then the minister just could not help himself and decided to have a very long tail to his answer to my question and said, 'We're not able to get up and talk about the cost structure of providing ATM fees.'

The minister may not be aware but the Reserve Bank has actually looked into this and, coming out of all that, there has been a finding that the average cost of a third-party provision of ATM services—a bank providing it for another bank's customer—is around 77c. So this issue has been inquired into, and we have brought private members' bills before to this parliament to try to address the issue, underpinned by exactly that research. So the facts are out there and they have been put before this place many, many times.

I can only take from what the minister has said that he does not believe that the current levels of ATM fees being charged are excessive. He does not believe that a $3, $2.50 or $2 ATM fee is worthy of the attention of this parliament, so I will not be holding my breath for the minister to come back with any proposals. It is clear from his answer that this government does not see ATM fees as excessive, despite the significant evidence available and everybody knowing, when they see that message come up on the screen as they are getting their card out of the ATM, that they are being charged $2.50. Everyone knows it is a problem, and all we were seeking to do is extend a very good principle in a bill that we have commended on credit card fees to ATM fees.

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (09:44): I simply reiterate that this bill is a worthwhile bill in itself. It does not address the issue of ATMs—it was not a recommendation of the Financial System Inquiry—and the member for Melbourne's simplified explanation of ATM fees is not able to be discussed in this debate today in the House. Simply getting up and putting your own particular view about one particular component of one particular report is not a way to make law in this country. It is not a fair way to make law or have a debate in this country. Mr Bandt's amendment tacked onto a bill about something else is not a way to run an economy, not a way to run a government, not a way to provide certainty and confidence for consumers or businesses. It is not really right for him to come in here and raise one aspect of one pet thing that might be of concern to him and suggest that we just tack it onto the back of a bill about something else. That is what the government's principal objection is here. We make no claims about the other matters that he raises, because this is not the forum to discuss them. It is very simple. It is not appropriate to come in here and just add something that is very complex, something that does bear discussion and consideration by government, something that does concern Australians, something worth considering in other forums in other ways, onto the back of something else and pretend we have had a reasonable discussion about it. There are many complex issues related to those matters.

I say to the House again that the government and the opposition have carefully looked at these matters in the Financial System Inquiry and the reason we have come to the same view is that that is the strong recommendation of Mr David Murray. I say to the member for Melbourne: you have many forums, you have many opportunities, you have many ways of raising those matters but it is not a good process, it is not good law, it is not good for the economy or consumers or businesses to be attaching minor pet issues onto the back of every single piece of legislation about other matters when people are unable to have the proper debates or the proper considerations about the issues that you want us to legislate on.

The DEPUTY SPEAKER ( Mr Mitchell ): The question is that the amendments be agreed to.

A division having been called and the bells having been rung—

The DEPUTY SPEAKER: As there are fewer than five members on the side for the ayes in this division, I declare the question negatived in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question negatived, Mr Bandt and Mr Wilkie voting yes.

Bill agreed to.

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (09:51): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr COULTON (Parkes—The Nationals Chief Whip) (09:53): I present the report from the Publications Committee sitting in conference with the Publications Committee of the Senate. Copies of the report are being placed on the table.

Report—by leave—agreed to.

The DEPUTY SPEAKER ( Mr Mitchell ) (09:54): If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.

Mr MATHESON (Macarthur) (09:54): The building and construction industry employs more than a million people, representing approximately nine per cent of the Australian workforce. It is a critical part of the fabric that makes this country productive, prosperous and internationally competitive. The people of Macarthur understand the importance of the building and construction sector to the economy. They know that cost blowouts and project delays as a result of industrial bullying cost time and money, which ultimately costs us all.

I stand here today, proud to be part of a coalition government which recognises the importance of an industry that is vital to job creation and essential to Australia's economy. I believe the Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] is a positive step forward. It encourages productivity and high levels of employment in the building and construction industry. It will ensure that the government's policy to deliver the infrastructure of the 21st century is delivered. In my electorate alone, this bill will protect jobs and investment by ensuring thousands of employers and workers in the industry can get on with the job without fear of intimidation.

One of the most crucial parts of this bill is the regulation to uphold and promote respect for the law to ensure respect for the rights of everyone in the building industry. It contains provisions to ensure that unlawful actions, including unlawful industrial actions, are dealt with appropriately. It also ensures the ability for the courts to impose significant penalties for individuals and organisations that participate in this unlawful action.

The Australian Building and Construction Commission was a strong and productive watchdog. It was established by the coalition in 2005 following the 2002 Royal Commission into the Building and Construction Industry. The royal commission found that the building and construction industry was characterised by widespread disregard for the law. It catalogued over 100 types of unlawful and inappropriate conduct. This included illegal strikes, pattern bargaining, right of entry infringements and the coercion of non-unionised subcontractors. The royal commission also found that existing regulatory bodies had insufficient powers and resources to enforce the law. This is why one of its recommendations was to establish a specialist and permanent regulatory body to look into this conduct.

It was the Howard government that established the ABCC in 2005 and the commission was instrumental in curbing illegal industrial action and lawlessness in the construction industry. It took a strong stand against union thuggery in the industry by keeping disputes to a minimum. The ABCC helped to increase productivity and lower construction costs around Australia. While the ABCC existed between 2005 and 2012, the performance of the construction sector improved. These benefits flowed through to our economy and on to all Australians. During its previous period of operation, the ABCC contributed positively to economic benefits for consumers, increased levels of productivity, fewer days lost to industrial action and an increased respect for the rule of law across the industry. This created flow-on effects to all law-abiding workers, employers and unions. Since its inception in 2005 the ABCC helped the industry to increase productivity by 10 per cent. It provided an annual economic welfare gain of $5.5 billion per year, reduced inflation by 1.2 per cent and increased GDP by 1.5 per cent. Put simply, the commission was doing its job. The number of working days lost annually per 1,000 employees in the construction industry fell from 224 in 2004 down to 24 in 2006. At the same time, building costs fell by 20 to 25 per cent and long project delays were dramatically reduced.

Before the abolishment of the commission in 2012, a submission made by the Housing Industry Association stated that the commission has been doing 'a sound and effective job of law enforcement, clamping down on unions and others for illegal industrial behaviour and right of entry breaches'. This was keeping the unions in check. It went on to say: 'However its work is far from finished. Aggressive and unlawful industrial action persists as an area of concern for the industry.' It is clear that work still needed to be done and, before it was abolished, the ABCC was doing the work independently and effectively. Unfortunately, the type of conduct that the royal commission identified back in 2002 cannot be easily reversed. It is the type of conduct that needs targeted resources to effect lasting cultural change. Whilst the ABCC succeeded in improving conduct, the culture of lawlessness identified by the royal commission had only been suppressed. Sadly, it still exists.

In its submission, HIA told us that it did not believe that Labor's legislation to abolish the ABCC would continue to deliver the strong, independent and robust enforcement body that the building industry required. It also said that 'a watering down' of the existing powers would result in a return to the industrial lawlessness identified by the royal commission. The writing was on the wall. While the ABCC existed, the economic and industrial performance of the building and construction industry significantly improved. A 2013 Independent Economics report on the state of the sector during this period found that building and construction industry productivity grew by more than nine per cent, consumers were better off by around $7.5 billion annually and fewer working days were lost through industrial action.

So why was a commission that was 'doing a sound and effective job' abolished? It was because the former Labor government came under sustained pressure from building and construction unions to abolish the Australian Building and Construction Commission and the Building Code that supported its work. And, once they were abolished, all hell broke loose. Just weeks after the ABCC was abolished, we saw violence on the streets of Melbourne, with militant union protestors intimidating the community and their supporters and attacking police horses. Workers on the site purchased an advertisement in the Herald Sun with an open letter to their own union bosses asking for the blockades to stop. Images of these protests were seen on television screens around the world. What message does this send to national and international companies about investing in building and construction projects in Melbourne or Australia?

And it does not stop there. We also saw the CFMEU grossly bullying nonmembers by creating posters labelling them 'scabs' and advocating that they be run out of the industry, in open defiance of the Fair Work Act and Supreme Court orders to end the protests.

On 19 June 2015, the Federal Court fined the CFMEU and five of its officials $545,000 for unlawful conduct at the $40 million Australian-government-funded Common Ground housing project for the long-term homeless. In its penalty judgment, the Federal Court said the conduct 'was a deliberate stratagem on the part of the CFMEU'. The court went on to say that 'an industrial organisation, be it an employer organisation or an employee organisation, which persistently abuses the privilege by engaging in unlawful conduct cannot expect to remain registered.'

Since the abolition of the ABCC, we have also seen a violent dispute at a brewery site in Geelong where union picketers were accused in court documents of making throat-cutting gestures and threats to stomp heads in, of shoving and kicking and of punching motor vehicles. We saw union protestors threatening people with 'Columbian neckties' at City West Water in Werribee, where the dispute was so heated that workers had to be flown in by helicopter. This behaviour is disgraceful and it should not be tolerated.

But what baffles me most is that the previous Labor government was well aware of this type of behaviour in the industry. That is why they were understandably reluctant to abolish the Australian Building and Construction Commission, despite strong union pressure. They contracted Justice Murray Wilcox to review the industry to buy some time. Justice Wilcox recognised the benefit provided by the Australian Building and Construction Commission, stating in his report that 'the ABCC's work is not yet done' and that 'it would be unfortunate' if the ABCC's replacement body 'led to a reversal of the progress that has been made'.

We know this behaviour is still taking place across Australia today. The recent Royal Commission into Trade Union Governance and Corruption report, prepared by Commissioner Dyson Heydon in December 2015, referred to 'widespread and deep-seated' misconduct by union officials. The commission publicly investigated 75 case studies and conducted 189 days of hearings in Sydney, Brisbane, Canberra, Perth and Melbourne, of which 155 were public hearings. More than 500 witnesses gave evidence in public hearings.

As a result of this report more than 40 individuals and organisations have been referred to authorities including police, directors of public prosecutions, the Australian Securities and Investments Commission and the Fair Work Commission. There was also a recommendation for an independent body with greater powers to investigate union records and finances. The report flags numerous examples of misconduct, including blackmail, bribery, death threats and misappropriation of funds. More than 79 recommendations were made, including tougher penalties for union officials, and special rules to 'combat the culture of disregard for the law' were recommended for the CFMEU, which included giving parliament the power to disqualify union officials they consider unfit.

Commissioner Heydon said the findings uncovered in the report were just the beginning. He wrote:

These aberrations cannot be regarded as isolated. They are not the work of a few rogue unions, or a few rogue officials. The misconduct exhibits great variety. It is widespread. It is deep-seated.

He went on to say:

It would be utterly naive to think that what has been uncovered is anything other than the small tip of an enormous iceberg.

We know that the building and construction industry has not been exempt from such behaviour. That is why the ABCC is crucial.

Unlike some opposite, the government knows how important this industry is to the future of the country. That is why we are committed to ensuring that the rule of law is maintained and that workers in the building and construction sector can go to work free of intimidation and harassment.

This bill provides effective means for investigating and enforcing the law. The Australian Building and Construction Commissioner will be able to exercise their power to obtain information quickly and effectively without being hindered by unnecessary bureaucratic red tape around the issue of examination notices. However, to ensure accountability and transparency, the use of these powers will continue to be reviewed and reported on by the Commonwealth Ombudsman. The commissioner will monitor, promote and enforce appropriate standards of conduct by building industry participants and refer matters to other relevant agencies and bodies as required. They will also be responsible for investigating suspected violations of the law by building industry participants. They will also intervene in proceedings in accordance with these laws and provide assistance and advice to building industry participants on their rights and obligations under designated building laws.

The commissioner will be supported by deputy commissioners, and will be the head of a statutory agency. The agency will be properly funded to ensure it can do its work. The funding taken away by the Labor government will be restored.

The bill also requires the Commonwealth Ombudsman to prepare and present to the parliament a report about witness examinations undertaken by the commissioner during the year. This will ensure public transparency and accountability and give the community confidence in the work of the ABCC.

The bill also aims to improve the bargaining framework to encourage genuine bargaining at the workplace level. Enterprise bargaining negotiations must be harmonious, sensible and productive and should be tailored to the particular workplace.

As part of this government's policy to improve the Fair Work laws, we are committed to re-establishing the Australian Building and Construction Commission to ensure the rule of law and productivity on commercial building sites and construction projects. We took this commitment to the 2010 and 2013 federal elections as a key policy and committed to re-establishing the Australian Building and Construction Commission within 100 days of the parliament first sitting. We were given a clear mandate by the Australian people to make this change, and that is why I stand here today.

We also promised that a re-established Australian Building and Construction Commission will administer a code that will govern industrial relations arrangements for government-funded projects. This step will ensure that taxpayers' dollars are used efficiently.

By abolishing the Australian Building and Construction Commission, Labor undermined confidence in the building and construction industry in this country. As a result, we have seen a return to lawlessness and an increase in the number of days where work is simply not being done in the industry. Workers in this industry deserve to be able to go to work each day without the fear of being harassed, intimidated or subjected to violence.

The people of Macarthur are depending on this industry and those who work in it. My electorate is experiencing an extreme amount of growth right now, which will continue over the next three decades. The building and construction industry employs thousands of residents in my electorate and south-west Sydney. It is imperative that the industry is stable and productive as we move forward into 2016 and beyond. (Time expired)

Mr PYNE (Sturt—Leader of the House, Minister for Industry and Innovation and Science) (10:06): I move:

That the question be now put.

The DEPUTY SPEAKER ( Mr Mitchell ) (10:17): The question now is that the amendments moved by the honourable member for Melbourne be agreed to.

A division having been called and the bells having been rung—

The DEPUTY SPEAKER: As there are fewer than five members on the side for the ayes, I declare the question resolved in the negative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question negatived, Mr Bandt and Mr Wilkie voting aye.

The DEPUTY SPEAKER: The question now is that the bill be read a second time.

Message from the Governor-General recommending appropriation announced.

Mr PYNE (Sturt—Leader of the House, Minister for Industry and Innovation and Science) (10:24): I seek leave of the House to move the third reading immediately.

Leave not granted.

Mr PYNE: I move:

That so much of the standing and sessional orders be suspended as would prevent the remaining stages being passed without delay.

The DEPUTY SPEAKER: The Manager of Opposition Business in relation to the motion.

Mr BURKE (Watson—Manager of Opposition Business) (10:24): There are only four speakers left on the list for parliament to be able to have a sensible debate on this issue. At the beginning of this week, when the Leader of the House introduced this bill, he made it clear that he was surprised that we gave leave. We decided to be cooperative so that we could have a substantive debate on the issue, but, like everything that is characterised by this legislation, what they are about is silencing dissent. What they are about is making sure that the additional speakers do not even get heard.

Next week, the Senate is not even on. The chance of this making a difference in the timing for the bill going through is nil. The only thing that the Leader of the House is doing is attempting to make sure that Labor members of parliament are not heard in the debate. That is what this is about. I have a full speaking time of 10 minutes there; my suggestion is that I sit down now—but, Leader of the House, do not silence the third reading. Let the Labor members in the third reading speak for as long as they need to make their case on this substantive issue. It is a reasonable position from us. All we ask is that we have a government that has the courage to not see debate as something purely to be shut down.

The DEPUTY SPEAKER ( Mr Mitchell ) (10:26): The question is that the motion be agreed to.

Mr PYNE (Sturt—Leader of the House, Minister for Industry and Innovation and Science) (10:35): I move:

That the bill be now read a third time.

Ms O'NEIL (Hotham) (10:35): Could I just start by expressing my absolute disgust at those on the other side trying to gag my contribution to this bill. Deputy Speaker, I represent 100,000 people in this chamber.

Mr PYNE (Sturt—Leader of the House, Minister for Industry and Innovation and Science) (10:35): I move:

That the question be put.

The DEPUTY SPEAKER ( Mr Mitchell ) (10:39): The question now is that the bill be read a third time.

Mr PYNE (Sturt—Leader of the House, Minister for Industry and Innovation and Science) (10:43): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Dr LEIGH (Fraser) (10:43): Labor's position is to support this bill, which enacts two tax changes announced by the former Labor government. Schedule 1 amends the treatment of earn-out rights associated with the sale of a business to allow the holder to defer their capital gains tax liability until the accurate financial value of those rights is known. This measure was first announced in the 2010-11 budget.

Schedule 2 introduces a new withholding tax requirement for those purchasing Australian property from foreign residents. Purchasers would be required to withhold 10 per cent of the purchase price and pay this to the Commissioner of Taxation to assist in meeting the foreign residents' capital gains tax obligation. While the first schedule was announced by the former Labor government, the second schedule was first announced in the 2013-14 budget.

Labor will always support sensible revenue measures which improve the budget bottom line without harming vulnerable Australians. The Labor Party has a strong and ongoing commitment to bringing the budget back into balance by sensible measures, including sound revenue measures such as these. 'Treasurer 2.0', Scott Morrison, is on record saying Australia has a spending problem, not a revenue problem. Yet he is now canvassing a 50 per cent hike in the GST rate. Claiming spending is the problem and then proposing GST tax changes that hit hardworking families is dangerously out of touch with economic reality.

A suggestion to the Treasurer from this side of the House could be that he might get around to releasing the tax white paper promised to the Australian people within the first two years of the government. Instead the government launched its 'Re:think' discussion paper, and then after business and community groups had spent thousands of hours and millions of dollars putting together their submissions to the 'Re:think' discussion paper the entire process has been junked. Now who knows when we are going to get the tax white paper. Indeed a timetable for the green paper, which would normally precede a white paper, is still up in the air. The government is at sea on tax reform. Good tax reform is hard. It requires more than smoke signals and thought bubbles about jacking up the GST. The impact on business and consumers needs to be fully fleshed out.

Returning to the specifics of the bill, former Assistant Treasurer Nick Sherry said when proposing the changes in schedule 1 that the measure will make it easier to buy and sell businesses. Capital gains taxation on earn-out requirements should not add inefficiency to the marketing of business assets. Earn-out requirements are an efficient and regularly used way of structuring business or business asset sales. Such requirements are commonly entered into when the buyer and seller are not able to agree on a fixed price for the transaction because of uncertainty as to the value of assets such as goodwill. Say, for example, that I were to purchase a small business from the honourable member for Cook for $1 million. He has a cost base of $600,000 and thus makes a capital gain of $400,000. However, as goodwill is an intangible asset—and he would know that more than most—I agree to give him an extra $100,000 a year if sales exceed an agreed upon threshold. The total capital gain would then be calculated using this earn-out pay-out, backdated to the point of the original sale. A reverse earn-out agreement follows a similar logic. The honourable member for Cook would repay amounts to me if an agreed performance threshold is not met within an agreed time frame—an arrangement which the Australian people might well be interested in engaging in with the member for Cook if his performance targets continue to be as they have been over the last few months!

The compliance measure in schedule 2 of this bill would impose capital gains tax withholding obligations on the purchasers of certain Australian assets. Although foreign residents have been subject to taxation on capital gains made when disposing of a taxable Australian property, voluntary requirements meant compliance was low. Given the non-resident status of the sellers, this made compliance a particularly difficult task for the Australian Taxation Office.

Talking about the resources available to the tax office, I should note that Labor favours a stronger compliance regime, better transparency and an appropriately staffed tax office. We welcome the changes in schedule 2 but they are overshadowed by the slashing of 4,700 jobs in the tax office. It beggars belief that the government can usher in compliance changes announced by the former Labor government yet completely undermine the ability of the tax office to make sure this regime is monitored effectively.

As housing prices continue to rise in Australia's largest cities, so too will the number of eligible properties. This measure applies to properties worth more than $2 million, and there will be an increasing number of properties in that range on the market. When buying from a foreign resident, the purchaser will be required to pay the Commissioner of Taxation 10 per cent of the purchase price to meet a portion of the foreign resident's capital gains tax obligation. The purchaser may then withhold an equivalent amount from the seller. The withholding can be claimed as a deduction by the seller when completing the required income tax return. If they fail to do so, Australians have the comfort of knowing that at least a portion of the capital gains tax obligation has been paid.

When we were in office, Labor pursued significant responsible changes to Australia's tax regime, recognising that, in a complex and fast-moving business environment, government needs to adapt what we do to make sure the revenue base is sustained. In 2013 the then Treasurer Wayne Swan and Assistant Treasurer David Bradbury announced a $4.3 billion multinational tax package. Labor's package changed the allowable debt-to-equity ratio for companies claiming a deduction. It tackled offshore marketing hubs and closed other loopholes that let companies shift their profits offshore.

One of the coalition's very first acts on coming to office was to trash $1.1 billion of those tax changes, effectively giving a $1.1 billion tax break back to some of the world's biggest firms. Like a fish out of water, the Abbott-Turnbull government has flip-flopped on small business measures. Labor introduced an instant asset write-off scheme, allowing small business to immediately deduct the cost of new assets and equipment. Treasurer Hockey scrapped it and then brought back a larger but temporary measure that is due to expire next year. I suspect many of those firms that supply assets to small businesses are wondering what is going to happen to the pipeline of demand for their capital goods when the instant asset write-off suddenly ends at midnight on 30 June 2017. That is what happens when you structure policies based on the political cycle rather than focusing on the economics first.

From opposition, the Labor Party has announced a range of measures that improve the budget bottom line, without a regressive GST hike. Indeed our policy changes, amounting to some $70 billion over the course of the next decade, constitute the most significant package of economic measures to be proposed and costed from opposition in over 20 years. Starting with superannuation, Labor's superannuation changes will yield $14.3 billion in the first decade of operation. Superannuation tax concessions overwhelmingly go to those Australians who are in the highest income brackets, and it is those concessions that we are seeking to scale back for a fairer retirement system.

The government's own Financial System Inquiry found that 10 per cent of Australians receive 38 per cent of our super tax concessions, with a majority of concessions accruing to the top 20 per cent of income earners. Indeed, the top one per cent get a larger share of superannuation tax concessions than the bottom 40 per cent. We have superannuation tax concessions, because two positive externalities result from people who put money in superannuation. One is that they are less likely to draw on the age pension. The other is that there is a public benefit from a pool of national savings. But that second public benefit is considerably smaller than the first, and we should be careful about providing overgenerous tax breaks to people whose superannuation balances clearly indicate that they will never be in the range of applying for even a part pension.

Labor has proposed two significant ways of reining in superannuation tax concessions. The first is to reduce tax-free concessions for people with annual superannuation earnings of more than $75,000 during retirement. Earnings above the $75,000 threshold will attract the same concessional rate of 15 per cent that applies to earnings in the accumulation phase. So, it is still a good deal to have your money in super. Earnings above $75,000 in the retirement phase are simply treated the way all earnings are treated in the accumulation phase.

Our estimate is that about 60,000 superannuation accounts with balances of over $1.5 million will be affected. Capital gains will be grandfathered, and the policy will have no impact on the basic income test to the age pension. We will also remove the 10 per cent tax offset for the defined benefit superannuation scheme incomes above $75,000.

Secondly, we will reduce the higher income superannuation charge threshold. When in government, Labor introduced the higher income superannuation charge, which lowered the tax concession available to incomes above $300,000. Lowering the concessional rate to higher income earners better aligns concessions with those available to lower and middle incomes. We propose to lower the threshold from $300,000 to $250,000.

I note in passing that it is a key priority of Labor to see greater gender equity in the superannuation system. We noted with great disappointment an early decision of the coalition government to scrap the low-income super contribution, a measure that affects around three million Australians on low wages, two-thirds of whom are women. Anyone who is serious about gender equity in superannuation should have shaken their heads at this government's ill-conceived decision to scrap the low-income super contribution.

In the area of multinational tax avoidance, Labor has a fully costed $7.2 billion multinational tax package that contains a range of measures that are carefully calibrated to raise revenue without hurting growth. We propose to amend the current debt deduction rules. We will scrap the two rules that lack strong economic intuition and will keep the one that does. Under Labor's proposal, the worldwide gearing ratio should be the sole debt deduction test. That essentially says to companies, 'Look, if you owe a lot of money to the banks then you should be able to deduct a significant amount of money from your Australian operations, but if you don't owe a cent to the banks then don't think you can profit shift through internal debt.' Internal debt has a place, but invariably one notices, looking at the borrowing patterns of multinationals, that they tend to follow a pattern whereby the borrowings are made in the higher-tax jurisdiction and from the lower-tax jurisdiction. Better aligning our debt deduction rules is in line with work that has been done by the OECD and represents a measure that still provides business with certainty. The measure that Labor proposes to allow companies to deduct debt under already exists in our tax laws; we simply propose to get rid of two out of three of the debt deduction rules.

Labor proposes to better align Australia's rules on hybrid entities and instruments with tax laws in other countries. Currently some companies can effectively 'double dip' by claiming tax exemptions in one country and tax deductions in another, because some countries treat hybrid instruments as equity and others treat them as debt. Companies are looking around the world to see how different tax authorities behave, and it makes perfect sense that the Australian tax office itself should be allowed to look at how its counterpart organisations in other countries treat a hybrid instrument. The ATO should not be blind to the tax treatment of hybrid instruments in other countries.

Australia also needs a better resourced tax office. Stronger compliance measures proposed in Labor's package will ensure that we add significantly to the bottom line. By contrast to this government, which has cut 4,700 jobs from the tax office, severely hampering compliance efforts, Labor will make sure that the tax office has the resources it needs in order to crack down on multinational tax avoidance.

Disappointingly, the government has been dragging its feet on tax compliance initiatives. We welcome the government's introduction of the Common Reporting Standard for sharing tax information with other countries, but Australia is starting much later than the rest of the world. In the past two years Labor has repeatedly called on the Abbott-Turnbull government to join around 40 other advanced countries that will start exchanging information next year. By contrast, Australia, under the Abbott-Turnbull government, proposes not to begin exchanging information until late 2018 for the accounts of individuals and until 2019 for accounts of corporate entities, effectively putting off the exchange of information until the election after next. Labor believes that the exchange of information ought to happen as soon as possible—that Australia should be moving with the rest of the advanced world, not sitting up the back and dragging its feet. It is extraordinary to see the gulf between the government's rhetoric about tax reform and the reality of having produced only a tax discussion paper which now has been junked by the incoming Prime Minister and Treasurer.

Compare and contrast that to what Labor did in government. Labor gave every Australian a tax cut by raising the tax-free threshold from $6,000 to $18,200. It was a Labor policy that not only cut taxes but also reduced paperwork burden for around a million Australians. The government likes to talk about cutting red tape but what better red-tape reduction could there have been than tripling the tax free threshold and saying to a million Australians: you do not have to file a tax return. For a typical Australian it takes around eight hours to prepare their tax return. So, effectively, Labor's measure gave a million Australians an extra public holiday every year. Labor also delivered three rounds of income tax cuts to low- and middle-income Australians.

By supporting this bill, Labor are demonstrating that we are always willing to have a serious and constructive conversation about tax reform. The government are welcome to join us, but so far we have seen them failing to adopt Labor's proposals regarding multinational tax avoidance or rein in unfair and unsustainable superannuation tax concessions. We know that a majority of Australians oppose an increase to the GST. The majority of Australians recognise that a 50 per cent hike to the GST is not tax reform, that it is lazy—as a former Treasurer once said—'bang you over the head' tax reform. It is an attack on the household budget of low- and middle-income Australians and a measure which will not only worsen inequality but also hurt growth.

Australians will remember that when the GST was introduced in the year 2000 the economy almost slipped into recession. That is because household spending makes up about three-fifths of the Australian economy. Add to this the fact that we have got slipping consumer sentiment. We have had a 3½ per cent fall in the Westpac-Melbourne Institute Index of Consumer Sentiment. We have got jitters on global stock markets, with some losing around a tenth of their value this year. Australians will recall Japan's experience in 2014 of raising their consumption tax from five per cent to eight per cent and sending a fragile economy back into recession, as a result of a two per cent drop in consumption.

What is extraordinary about Treasurer Morrison is that he says that he wants to 'protect consumption'. Raising the tax on consumption is a funny way of doing it. You would have to think that, if you are going to raise the tax on consumption, you are going to get less consumption. That was the experience of Australia when we introduced the GST. It was the experience of Japan when they hiked the GST. The government like to say that they believe in boosting growth. We heard the member for Wannon on radio this morning saying that the key to tax reform is boosting growth. He is a GST spruiker, who is arguing that if we were to raise the GST and cut income taxes that would deliver a growth dividend. I would urge the member for Wannon to have a look at his government's own Re:think discussion paper. It is a discussion paper which looks at the growth drag of the GST and income tax and which finds that the growth drag, which economists call the deadweight cost of both those taxes, is about one dollar in five. The best estimate from Treasury is that, if you raise $5 of revenue from the GST, the cost to economic activity is about $1. If you raise $5 of revenue from income tax, the cost to economic activity is about $1. So I would like to know how the member for Wannon thinks there is going to be a growth dividend from hiking the GST and cutting income taxes. In fact, their own modelling suggests that that would have no benefit to growth whatsoever, but it would certainly worsen inequality. We know the proportional impact of the GST is nearly twice as high for the poorest fifth as for the richest fifth, and that is because the poorest fifth are not saving. In fact, they are often net borrowers, whereas the richest fifth are saving about a quarter of their incomes. So the GST is a regressive tax that does not boost growth.

We also have the small matter of compensation. We have the Treasurer claiming that the government's plan is not to increase the tax share. Taken literally, it means that not a dollar of increased GST revenue could be returned in pension increases or family benefit increases. If you take just one dollar of additional GST revenue and put it back through higher household payments, you have raised the tax share. So, if Treasurer Morrison is to be believed, the impact of a GST hike would be devastating for Australian pensioners, who would see the cost of many of the things they buy go up by five per cent but who would get not a dollar of household compensation. If that is wrong, if in fact Treasurer Morrison does not know what he is talking about and there are plans to compensate people on fixed incomes, then in that case do not go around the country telling us you are not planning to raise the tax share, because you clearly would. Either this government's GST rise will not compensate people on fixed incomes or it will increase the tax share. You cannot have both.

Jacking up the GST is not real tax reform. Hitting household budgets while refusing to make big companies pay their fair share is not real tax reform. It is simply going soft on the strong so you can go hard on the weak. The measures in this bill are measures that Labor can support, because in at least one case they are measures that originated under Labor. If only we had a government that was willing to apply this approach more broadly, engage with Labor over our fair and sustainable revenue and tax measures and recognise that we can make sensible and targeted cuts to the slush fund for polluters through not instituting the baby bonus, through cigarette excise, through multinational taxation and through changes to our unfair and unsustainable superannuation tax concession system. If we do that, we would be able to reduce inequality and raise growth—unlike increasing the GST, which would hit growth and worsen inequality.

In closing, I move the second reading amendment that has been circulated in my name:

That all the words after "That" be omitted with a view to substituting the following words:

" while not declining to give the bill a second reading, the House condemns this Government ' s failure to pursue real tax reform and instead hit families with a higher GST. "

The DEPUTY SPEAKER ( Ms Henderson ) (11:07): Is the amendment seconded?

Mr Gray: I second the amendment.

The DEPUTY SPEAKER: The original question was that this bill be now read a second time. To this the honourable member for Fraser has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.

Mr VAN MANEN (Forde) (11:07): It is always a pleasure to follow the member for Fraser and to listen to him wax lyrical about Labor's record in government and their plans for this utopian future in which increasing taxes across the board will solve all of the ills in our economy. What we did not hear the member for Fraser say in his contribution is that they are actually going to reduce the tax burden on the Australian economy. All he talked about was increasing taxes. It would be worthwhile for the member for Fraser to remember—he was in this House when this occurred as he came in in 2010 when I did—that the increase in the tax-free threshold to $18,200, just to refresh your memory, Member for Fraser, was because of the introduction of the carbon tax. So it was no magnanimous gesture on the part of Labor when they were in government that they would increase the tax-free threshold to $18,200; it was because of the compensation for the carbon tax. It was this government—

Dr Leigh: It was textbook tax reform.

Mr VAN MANEN: It was not tax reform. When we came into government, we abolished the carbon tax and left the tax-free threshold at $18,200. That is genuine tax reform and compensation for the Australian people. The other interesting comment the member for Fraser made was when he touched on the fact that the top 10 per cent of income earners receive approximately 38 per cent of superannuation concessions. What he failed to mention in that contribution, which is much more relevant because it is a much higher figure, is that the top 10 per cent of income earners in this country pay approximately 50 per cent of all income tax. So the notion of equity that he talks about when he only focuses on part of the equation is disingenuous in the extreme.

I will now return to the substance of the Tax and Superannuation Laws Amendment (2015 Measures No. 6) Bill 2015. I rise to speak in support of bill, because it introduces amendments to our taxation laws to improve the operation of our capital gains tax regime. One of the focuses of this government has been looking for opportunities that simplify our tax system and make it easier for compliance to be achieved.

I readily acknowledge that the measures in this bill were two unenacted measures left by the previous government. If they were such good measures, as the member for Fraser has told us in his contribution today, the question becomes, 'Why didn't the previous government enact them?' But, just like many things of the previous government, they were left half done or not done at all.

If there is one thing Australian small businesses deserve, it is certainty and clarity. In my electorate of Forde, where we have more than 11,000 small businesses, it is important we provide legislation that helps our businesses invest, grow and create more jobs. We can best achieve this by reducing red tape and compliance costs that our small business sector frequently struggles with. We want small business to be able to be confident in making their investment decisions.

Schedule 1 of this bill clarifies the treatment of earn-out arrangements by making any financial benefits payable under such rights part of the original value of the business or business asset for capital gains tax purposes. This makes enormous sense, because you never know at the original settlement time of the sale of the business, if there are earn-out rights attached, what the ultimate value of those earn-out rights are going to be.

Earn-out rights involve the sale and purchase of a business or business assets where the value of the underlying asset is uncertain. Earn-out rights can create flexibility and address uncertainty for purchasers and sellers of business assets and are a legitimate and efficient way of structuring the sale of a business to deal with the uncertainty about its value.

A draft ruling by the ATO specified that an earn-out right is a separate and distinct asset from the underlying business and must have its market value estimated for capital gains tax purposes. However, as I have touched on just before, the market value of an earn-out right is very difficult to quantify as there is no liquid market available to price the right, and it is dependent on the unknown future performance of the underlying business. In addition, a seller may not be able to assess certain capital gains tax concessions that are relevant.

Treating the earn-out right as a separate and distinct asset from the business itself resulted in significant complexity and additional compliance costs for businesses that use earn-outs. The complexity of the current operation affects the ability of businesses to efficiently price their business assets and, following concerns expressed by stakeholders with this treatment of earn-out arrangements, the previous government, to their credit, announced capital gains tax look-through treatment for these earn-out arrangements.

Providing capital gains tax look-through treatment for earn-out arrangements will allow taxpayers to disregard the earn-out right itself, while making any earn-out payments part of the original value of the business or business asset for capital gains tax purposes. This will result in payments made under the earn-out right being added to the capital proceeds or the cost base of the original sale through amendments to the taxpayer's tax return for that period. By providing the look-through treatment to earn-out arrangements, the government will help provide certainty and clarity for businesses entering into earn-out arrangements as well as protect any entitlements they have to small business capital gains tax concessions.

Australian businesses are expected to have a net reduction in compliance costs from the measures in this schedule as it simplifies the system and the market value of the earn-out right no longer needs to be estimated at the time of sale. This is another example of our government's commitment to improving legislation for business, reducing the costs of compliance and uncomplicating tax measures. The amendments made by this schedule will apply to all earn-out arrangements entered into after 23 April 2015. Importantly, to protect taxpayers who have in good faith anticipated changes to the tax law in this area as a result of the announcement by the previous government in 2010, the measure also includes protections to preserve their current tax outcome.

Schedule 2 to this bill introduces a new collection mechanism to support the operation of Australia's foreign resident capital gains tax regime. Foreign residents who dispose of certain Australian assets—broadly, direct and indirect interests in real property—are liable to pay tax on capital gains. The Australian Taxation Office has indicated that foreign residents' voluntary compliance with our capital gains tax regime is poor. In addition, there are difficulties in the ATO undertaking effective compliance after a transaction takes place, given the funds would likely be offshore and the foreign resident may otherwise have little connection to Australia.

Australian property investors are required to pay capital gains tax on the profits from an investment property sale. Many of these investors are mums and dads on median incomes who are putting these investments towards their retirement. They are required to pay capital gains tax, and do so when completing a tax return. It is unfair that they should be held to account on paying this tax when foreign residents avoid their responsibility of complying with our capital gains tax regime.

The schedule seeks to address these difficulties associated with collecting tax from foreign resident taxpayers. Originally announced in the 2013-14 budget by the previous Labor government, the government announced it would go ahead with the measure on 6 November 2013. Our government is committed to ensuring that foreign residents investing in Australian real property comply with their Australian legal obligations, and this measure is consistent with that effort. It is also consistent with efforts by this government to ensure that multinational companies comply with their tax obligations. It is interesting to note that the member for Fraser in his contribution waxed lyrical about Labor's plan for multinational taxation, yet in the whole six years of government they did nothing and when we introduced our multinational tax package towards the end of last year they voted against it. They can wax lyrical about multinational tax and foreign tax but this was a policy of theirs yet they never did anything. They also talked about multinational tax but, as usual, did not do anything. It is this government that is putting the time and effort into making the changes to protect and increase the integrity of our taxation system.

The schedule in this bill also complements recent changes to Australia's foreign investment framework to increase scrutiny and transparency with respect to foreign investment in residential real estate. Under this measure, where the seller of certain Australian assets is a foreign resident the buyer will be required to withhold and pay to the ATO 10 per cent of the purchase price. Withholding regimes are a common part of Australia's and other countries' taxation systems. Countries such as the United States and Canada have similar withholding tax regimes in place to support their foreign resident capital gains tax requirements.

Broadly, this measure applies to transactions where a foreign resident disposes of direct or substantial indirect interests in Australian real property. Australian residents and foreign residents should be on a level playing field when it comes to meeting their tax obligations. The measure does not apply to direct real property transactions below $2 million, in order to appropriately target those areas where revenue is at greatest risk and minimise the impact on other property transactions.

Foreign resident sellers will no longer have the full amount paid to them until they lodge their tax return under this new measure. It requires the buyer of such property to withhold and remit to the ATO the 10 per cent withholding amount. The government, through the Australian Taxation Office, will continue to work with industry to assist them in preparing for the commencement of this measure. Once effective, it will prevent foreign residents from avoiding paying their fair share of capital gains tax when selling real property in Australia. They will be on a level playing field with Australian residents, and the measure will ensure that our capital gains tax regime is fair and sellers from overseas meet their obligations. This is another bill in a long list of bills that demonstrate the government is ensuring the integrity of our taxation system for all concerned.

Mr ZAPPIA (Makin) (11:20): I support the second reading amendment moved by Labor's shadow Assistant Treasurer, the member for Fraser, who spoke just a few minutes ago on the Tax and Superannuation Laws Amendment (2015 Measures No. 6) Bill. This legislation enacts two changes that were previously announced by the Labor government. The member for Forde asks why we did not enact these changes when we were in government. The Labor government enacted over 500 pieces of legislation, I believe nearly 600, in its term in office. It was almost a record amount of legislation. The parliament has only a certain capacity to deal with matters and there are always priorities. Nevertheless, these were matters raised by the previous Labor government.

There are two schedules to this bill. One effectively deals with capital gains tax liability and the other deals with capital gains tax obligations on foreign residents, where 10 per cent of the sale of a property will be withheld until the capital gains tax issues have been finalised. In my view, both of these measures are sensible. The first will cost the government and the budget bottom line some money but the second will save some money for the taxpayers of this country. I think that is fair and reasonable, given that it is obvious that there are foreign investors who are gaming the capital gains tax system in Australia at the moment.

The legislation is before us because the government has a budget problem: it simply cannot balance its books. The deficit is projected to blow out to $38 billion by the end of this financial year, and that is after the government has made substantial cuts to just about every policy area and every department of government: $80 billion of health and education cuts; $11 billion cut from the foreign aid budget; $1 billion or thereabouts from the research sector; industry assistance has been decimated—about $1 billion has also been cut from that; we saw over $1 billion cut from local government assistance grants; and then we had another $1.3 billion cut from pensioner concession payments made to the states. In addition to that, there have been cuts to the ABC of about half a billion dollars; social welfare pension disability reforms which effectively reduce the amount of money that is going into social payments around the country; and then, only in December, when we had the MYEFO statement handed down, we saw another $650 million of health cuts to pathology and diagnostic imaging services—cuts that will hit the lower income people of this country the hardest and will hit people who are already not only on low incomes but perhaps facing serious health problems. They are cruel cuts that any decent government would never implement.

It is no good—as the Prime Minister continues to do and as we saw him do in question time only this week—to continue to mask the government's incompetence by blaming the previous Labor government for the financial position we are in. This government has been in office now for 2½ years. In fact, this is an election year and we are almost at the end of this government's term in office. It is time that they took responsibility for their own actions, for their own policies and for their own mismanagement of the economy, rather than continuously try to blame it on the previous Labor government. It is not washing anymore with the Australian voters. It is wearing thin with them because they know that there comes a time when governments need to take responsibility for their own incompetence and their own actions.

The truth is that it is this government's own foolish policies that have contributed to and largely caused the financial mess it is in. Turning its back on industry, attacking Public Service jobs and other government institutions, creating job insecurity and taking away workers rights do nothing to raise confidence or strengthen the Australian economy. So the government then looks to more cuts.

Rather than cuts, the government should look to a more equitable tax system, a tax system that ensures that all taxpayers pay their fair share of tax—something that the Turnbull government dances around but does little about. Indeed, it is clear that it seeks to protect large corporate entities and other high-income earners from being scrutinised. Only last month we had a tax commissioner's report released. From that report we learn that, out of 1,539 of Australia's largest corporate entities, 38 per cent did not pay any tax in 2013-14. Of those 1,539 entities 985 are foreign owned, and those 1,539 entities had a combined turnover of $1.6 trillion—that is, $1,600 billion. They also made a significant profit—$169.9 billion—and they paid a combined amount of tax of just $39.9 billion. That is a tax rate of less than 25 per cent. Notably, the 579 local and foreign based companies that paid no tax had a combined turnover of $405.9 billion and a taxable income of $4 billion. That is, 579 companies pay no tax, yet they have a taxable income of $4 billion. It is no wonder that ordinary taxpayers and people around Australia are angry about the tax system which allows people earning that kind of money to not pay tax.

The figures are confirmed in several other reports that have identified the level of corporate tax being evaded or avoided here in Australia and around the world. The Tax Justice Network has been particularly focused on global tax avoidance or tax minimisation schemes and the additional burden that tax avoidance places on ordinary Australian taxpayers. A report put together jointly by Tax Justice Network Australia and United Voice found that, through the use of trusts, stapled securities and related party transactions that utilise thin capitalisation, transfer pricing and tax havens, billions of dollars in tax are avoided each and every year. The report also found that the overall tax rate of the Australian Stock Exchange 200 companies over the last decade is 23 per cent—that is, below the statutory rate of 30 per cent. If the ASX 200 companies had paid tax at the statutory rate it would have produced an additional $8.4 billion in annual income for the Australian government. Within the ASX 200 companies, nearly one third have an average effective tax rate of 10 per cent or less. I repeat: a third have an average effective tax rate of 10 per cent or less. Fifty-seven per cent disclose having subsidiaries in secrecy jurisdictions and 60 per cent report debt levels in excess of 75 per cent—a matter that the member for Fraser alluded to in his comments when he spoke on this legislation. By having those excessive debt levels they artificially reduce their taxable profits.

Corporate tax is the second largest tax revenue base for the Australian economy, comprising 28 per cent of total income tax revenue in 2013-14 budget estimates. For that year, the government projected that they would collect $70.4 billion from company tax alone. By comparison, GST was projected to collect $52.7 billion. Australia's statutory 30 per cent corporate tax rate is also below the 2013 weighted average corporate tax rate for all OECD countries of 32.5 per cent. So, when members opposite claim that we need to reduce the corporate tax rate in Australia, the reality is that by comparison with other OECD countries we are not doing too badly.

Interestingly, mining corporations are huge beneficiaries of tax concessions. It has been estimated that the mining sector benefited from $4.5 billion in federal tax subsidies in 2013 and $3.2 billion from state and territory subsidies. Also I note from the tax commissioner's report that some of Australia's biggest earners that did not pay tax in 2013 were indeed some of the world's biggest and best-known mining and oil entities. So not only do they pay little or no tax but their Australian operations are being subsidised by the Australian taxpayers. It is little wonder that the government has a budget problem.

Yesterday there was also the report of how McDonald's Australia halved its Australian tax bill by paying McDonald's Asia Pacific, based in Singapore—which has a lower tax rate than Australia—an inflated service fee of $392.6 million. It appears to be nothing more than an internal company transfer of money from Australia to Singapore, under the guise of a service fee, for the purpose of minimising tax paid here in Australia because Singapore has a lower tax rate.

I suspect McDonald's would not be the only company doing this. Avoiding tax is a very clever way of boosting profits.

The budget deficit is blowing out under the Turnbull government, and the government needs to do something about it. We support this kind of legislation because it is sensible. However, if the government really wants to increase the bottom line of its budget—if the government really wants to increase total tax revenue in this country—the answer is not to do it by raising the GST or adding it to items such as food or health expenses. As the member for Fraser quite rightly pointed out, raising the GST just dampens economic growth in the country. It is actually a retrograde step. Indeed, the most effective way of raising income for the government is to boost productivity around the country.

But there is also another compelling argument as to why raising the GST is not a good idea. Anyone arguing for an increase in the GST must explain to the Australian people why they are being forced to pay more tax when hundreds of corporate entities turning over billions of dollars every year and making millions of dollars in profits are paying little or no tax. They also need to explain why they are supporting an unfair GST tax when there are much fairer options available to the government and which federal Labor has drawn attention to.

Those people supporting a GST increase should also explain to the Australian people why people at the lower end of income levels in this country—people often already doing it tough—should pay more of their meagre income in tax, because it is those people that the GST hits the hardest. The fact is that nobody rejects that argument. We have raised many a time that the people at the lower end of income are the ones most affected by GST increases, and I have never heard anyone reject or rebut that argument. We already have inequality at a 75-year high in this country, and the GST will simply widen the gap between the rich and the poor.

I also note reports that there is a growing nervousness amongst government backbenchers as to increasing the GST. Perhaps they are waking up to the fact that the Australian people are not fools and that they understand unfairness when they see it—they understand the unfairness of raising the GST when other people in this country who are making huge profits are being allowed to get off scot-free with paying little or no tax.

In March last year Labor put forward a $7.2 billion multinational tax package. Labor also announced that we would scale back superannuation tax concessions, which overwhelmingly go to those with the highest income. Labor has made it clear that, if we want to increase income for the government in this country, we need to lift productivity levels. That is the way to fix the budget problem: to look at those areas where we are currently neglecting the ability to raise tax, rather than to hit the people on lower incomes.

This measure, whilst it goes some way towards achieving some of those objectives, is only a small drop in the bucket. There is much more that we can do, and, despite the Prime Minister's protestations that this government is acting in closing the loopholes and the schemes available to those who want to minimise their tax, the reality is that the government is not doing anywhere near enough, when the facts and the figures are clearly before it pointing out that the country could do much better and would have a much fairer system if those people and those entities making millions of dollars in tax every year paid their fair share of tax.

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (11:35): Firstly, I would like to thank all those members who have made a contribution to this debate. The Tax and Superannuation Laws Amendment (2015 Measures No. 6) Bill 2015 makes two important changes to Australia's capital gains tax regime and implements two measures announced but unenacted by the previous government—and that is important for opposition members to note.

Schedule 1 to this bill amends the taxation treatment of earn-out arrangements in order to provide more clarity for sales or purchases of businesses involving earn-out rights, which are rights to future financial benefits linked to the performance of the asset after the sale. This bill will make any financial benefits received under the earn-out right part of the original value of the business or business asset for capital gains tax purposes. When payments under the earn-out right are made, these payments will be added to the capital proceeds or the cost base of the original sale, through amendments to the taxpayer's tax return at that time.

Earn-out rights involve the sale or purchase of business assets where the value of the underlying asset is uncertain, and can create flexibility for purchasers and sellers of these assets. Earn-out arrangements are a legitimate and efficient way of structuring the sale of a business, or business assets, to deal with uncertainty about its value.

However, there is significant complexity in the current treatment of earn-out arrangements, which may affect the ability of businesses to efficiently price their business assets. This measure not only provides more clarity and certainty to businesses but also protects any entitlements they have to small business capital gains tax concessions.

This measure was initially announced by the previous government on 12 May 2010. The measure will apply to all earn-out arrangements entered into after 23 April 2015. In addition, to protect taxpayers who have reasonably and in good faith anticipated changes to the tax law as a result of the announcement by the previous government some five years ago, the bill also includes protections to preserve their current tax income.

Schedule 2 to this bill amends the taxation laws to introduce a withholding tax on the disposal of certain taxable Australian property by foreign residents. The measure puts Australian residents and foreign residents on a level playing field when it comes to meeting their tax obligations.

Together with the strengthened foreign investment rules introduced recently by the government, the implementation of this measure reflects the government's commitment to ensuring that foreign investors are following the rules. This measure seeks to address difficulties associated with collecting tax from foreign resident taxpayers. It will do this by requiring, from 1 July 2016, the buyer of certain assets held by a foreign resident to withhold and pay to the Australian Taxation Office 10 per cent of the purchase price. The amount collected is an estimate of the vendor's final income tax liability. The vendor is still required to lodge an income tax return and pay any outstanding debt. They may claim a credit for the amount of tax withheld in the income tax return at this time. In this way, the withholding measure also encourages participation and engagement by foreign residents with the Australian Taxation Office. The withholding obligation arises where a foreign resident disposes of certain land or land related assets. It will not, however, apply where the transaction involves real property valued at under $2 million. This ensures that the measure is appropriately targeted at those areas where revenue is at greatest risk and minimises the impact on other property transactions. The development of the measure has undergone extensive consultation with stakeholders. The government believes that the final design of the measure strikes an appropriate balance between maintaining the integrity of the tax system and minimising the impact on the majority of property transactions. This measure was initially announced by the previous government as part of the 2013-14 budget.

I commend the bill to the House.

The DEPUTY SPEAKER ( Mr Broadbent ): The original question was that this bill be now read a second time. To this the honourable member for Fraser has moved as an amendment that all words after 'that' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

The DEPUTY SPEAKER: The question now is that the bill be now read a second time.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (11:40): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms MACKLIN (Jagajaga) (11:40): I am speaking today on the Social Service Legislation Amendment (Budget Repair) Bill 2015. Only the Liberal Party would have the audacity to come into this place and put forward a bill with the words 'Budget Repair' in the title, because for the last two years this Liberal government has done absolutely nothing to repair the budget. In fact, the deficit has doubled during their time in office. That is right: the budget deficit has doubled under this Liberal government's watch. Yet they come in here day after day and lecture the Australian people about fiscal responsibility.

It takes a special kind of audacity for the Minister for Social Services to come in here and talk about the need for fiscal restraint. The Minister for Social Services was of course the Treasurer of Western Australia between 2010 and 2012. Today, Western Australia has a budget deficit of $3.1 billion. That is the Minister for Social Services' legacy to the people of Western Australia: a $3.1 billion deficit. This is the man who as Treasurer of Western Australia mismanaged one of the greatest mineral booms in history and left the Western Australian people with a deficit of $3.1 billion. So, every time this Minister for Social Services preaches about the need to cut support to pensioners or people with disability or young people—because we have to be fiscally responsible—we will be reminding him every single time of his record of economic incompetence in Western Australia—a $3.1 billion deficit that the Minister for Social Services left behind in Perth. He has no credibility whatsoever when it comes to budget repair.

Labor understands how important it is to repair the budget, but you have to do it in a way that is fair and equitable. The Liberals' approach, whether it was under the member for Warringah, Tony Abbott, when he was the Prime Minister, or the latest Prime Minister, Malcolm Turnbull, is to make unfair cuts affecting low-income and middle-income Australians. We know that the latest thing they want to do is increase the GST to 15 per cent—a regressive tax that will make the cost of everything go up and will hit low-income and middle-income earners the hardest.

On the other hand, Labor thinks we should make multinational companies pay their fair share of tax. We think that we should end the unfair and unsustainable superannuation tax concessions for the very wealthy. Labor will oppose this bill today. We will oppose each and every one of the measures contained in the bill, just as we have opposed them on previous occasions. I will go through the reasons why. People might remember that these cuts have their origins in the 2014 and 2015 budgets. The bill proves that it does not matter who the Liberal Prime Minister is. This Liberal government is intent on hurting low-income and middle-income Australians.

The first measure in the bill proposes changes to the proportional payment of pensions outside Australia. In other words, the Liberals want to make it harder for some pensioners to continue to receive their full pension whilst they are overseas. Just remember that, all of you over there who have lots of pensioners who were born overseas in your electorates. This bill today is going to make it harder for those pensioners to receive their full pension whilst they are overseas. Currently, pensioners can stay overseas for 26 weeks and receive their full pension. Following that time, the pension is reduced to a rate that depends on the number of years a pensioner has worked in Australia. But, under the government's proposal that is in this bill today and that every single Liberal and National party member is about to vote for, from January 2017 that 26 weeks will be reduced to six weeks. If the government gets its way, after six weeks overseas, some pensioners will have their rate of pension reduced. Labor oppose this because we think it unfairly punishes pensioners who choose to spend a period of time overseas, possibly for visiting family.

As the Chairperson of the Federation of Ethnic Communities' Councils of Australia, Joe Caputo, has said, 'pensioners born overseas often need to travel overseas for extended periods to stay in touch with family or to care for a sick or dying relative'. In some cases, they had never been back to the country of their birth and were going on, as they describe it, 'the trip of a lifetime'. A Melbourne pensioner, Vic Guarino, who came to Australia from Italy in the early 1960s, described the government's changes to pension portability as 'like a threat'. Mr Guarino said:

You want to go [overseas] because you want to see someone in the family that's old … My wife had a sister in Italy, she wanted to spend time with her before it was too late.

They are many pensioners across Australia who feel like they are being targeted by this government.

Mr Whiteley: Tell the truth about what's in the bill!

Ms MACKLIN: The Liberal government are hell-bent on cutting support for pensioners and seniors. Obviously, there is a bit of sensitivity from the member opposite. I will be glad to see whether he tells all of the pensioners in his electorate who were born overseas that he is cutting their entitlements. If he does not do it, I will.

The Liberal government are hell-bent on cutting support to pensioners and seniors. This is just the latest effort. Their first instinct is to take money off pensioners. Let us have a look at each and every one of the measures that that member over there who is making all that noise and every single other Liberal and National party member have so far voted for. First of all, they voted for a cut to pension indexation—a move that would have seen an $80 a week cut to the pension over 10 years. That is what they all voted for. They also voted for cuts to 330,000 pensioners by changing the pension assets test. That will now start next year, and each and every pensioner who is on a part pension because of the assets test knows that the Liberal government will cut their pension. They made cuts to pensioner concessions—the Liberal government took $1 billion out of pensioner concessions. The government also want to increase the pension age to 70. If they get that through the parliament, it will mean Australia would have the oldest pension age in the developed world. In this bill are cuts to pensioners who spend time out of Australia. That is the Liberal-National government's record on pensions—absolutely shameful.

It is important to note that this new cut, the latest cut by this Liberal-National party government to pensioners, is widely opposed by seniors groups, migrant groups and the welfare sector. The Council on the Ageing describes the change as:

… excessively punitive and inequitable in its impact on Australians not born in this country and who maintain cultural and familial ties to their place of birth.

Around 40 per cent of age pensioners were not born in Australia. The Council on the Ageing says the impact of the measure is likely to be:

… significant and unfairly borne by one segment of our community.

Their submission to the Senate Community Affairs Legislation Committee inquiry goes on to say:

We know from our members and constituency that it is not unusual for older Australians born overseas to take 'the one big trip' to their country of birth when their working lives are over. They make the most of their time there, given the cost of travel, spending an extended period seeing family and friends before returning to Australia. COTA does not see this as unreasonable.

I think that best sums up the sentiment of so many people who have written to me on this issue. It is not unreasonable for pensioners to go for 'one big trip' in their retirement to visit their friends and family in the place of their birth.

The St Vincent de Paul Society said in their submission to the Senate inquiry into this bill:

It is unfair that a new Australian from a refugee background, who has had to return to their country of origin for a few months, should have their Pension cut significantly more than someone who has lived in Australia their whole life and then permanently emigrated overseas.

The Refugee Council of Australia also opposes this measure, noting that, due to the numerous problems with the family reunion program, refugee community members are often required to travel overseas for long periods of time to visit their relatives and community members. This is particularly important for those people who may have sick or dying relatives in secondary countries of asylum. So, clearly, the migrant and refugee communities are very much opposed to this change.

Of course, it does not end there. Also included in this bill are some other relics from this government's dark past. It includes the abolition of the pensioner education supplement. People opposite might like to forget the 2014 'lifters and leaners' budget. They have punted the previous Treasurer, Mr Hockey, out of the country, but what they have in this bill today is some of the remnants. The pensioner education supplement has, so far, outlasted the former Treasurer, Joe Hockey.

I will just remind people opposite what the pensioner education supplement is and who uses it. It is a payment of between $31.20 and $62.40 a fortnight, depending on levels of study, to help pensioners—largely, people on the disability support pension and the carer payment—who are studying. It provides a small but important payment to help with the costs of study. It can be used to purchase study aids, covering items like textbooks and other academic resources, and for printing, transport and internet connections. Once again, every Liberal and National Party member, having already tried to abolish this a number of times, is going to try again. This measure will see 47,000 pensioners lose their supplement. As the Women and Work Research Group at the University of Sydney has said:

For those in an already difficult financial position who are attempting to improve their education and consequently their employment prospects, these cuts will be significant.

The pensioner education supplement is a payment to people with disabilities, to people who are carers, to single parents and to young people who are studying. According to the Welfare Rights Centre, around three in 10 people on this payment are aged under 25, indicating that the payment offers beneficial support that helps young people to continue in education and study. Seven per cent of those studying with the pensioner education supplement are Indigenous. Around 40 per cent of people receiving the payment have a disability and so, in fact, it is people with a disability who will be the biggest losers if this supplement is abolished. It is a small allowance. It is nothing generous. It is nothing lavish—a maximum of $62 a fortnight—and yet this government, under the previous Prime Minister, Mr Abbott, and under this new Prime Minister, Mr Turnbull, have sought to cut it. They have sought to cut it from people who are already in a difficult financial position, some of society's most vulnerable people. That really is what this government's approach to budget repair is about.

This bill also seeks to abolish the education entry payment—once again, another small payment that goes to recipients of Newstart, parenting payment and partner or widow allowance. In 2013-14, around 87,000 people received the payment. This, too, is a payment that is designed to help vulnerable people with study costs, and yet this government, under Prime Minister Turnbull, and every member of the Liberal and National parties are trying to rip it away.

The final measure in this bill reintroduces something that was contained in the 2014 budget and later introduced in the Social Services Legislation Amendment (Youth Employment and Other Measures) Bill 2015. These changes include freezing, for three years, the income-free areas for all working-age allowances—other than student payments—and for parenting payment single from a new start date of 1 July 2016. So, in a few months time, if the government gets its way, it will try to freeze—that is, not increase, even to keep up with inflation—all of those working-age allowances.

They also want to freeze, for three years, the income-free areas and other means-test thresholds for student payments, including the student income bank, from 1 January. What we see with this measure is the Liberal-National Party government's steadfast commitment to make life harder for young Australians. By freezing these thresholds, more young Australians will be ineligible to get assistance while they undertake study or training. The measure is absolutely consistent with this government's—both Mr Abbott's and Mr Turnbull's—approach of forcing young people to wait one month before they get access to any sort of income support.

Of course, originally they wanted to make young jobseekers wait six months before accessing any income support. Labor was able to stop that. Then the Liberal Party came back under the current Prime Minister and wanted to make people wait a month before they get any form of income support. So people are supposed to live on absolutely nothing for a month. I am very pleased to say to the House that Labor, so far, has been able to stop the government from pushing young people into poverty and hardship. I hope we can continue to do that.

In summary, this bill gives us further evidence that, no matter who is leader of the Liberal Party, they will always seek to cut support to pensioners, to people with disability, to carers, to women and to young people. It is a bill introduced by a minister whose biggest legacy as the Treasurer of Western Australia was leaving behind a $3.1 billion deficit. It is a bill from a Prime Minister who claims that he is committed to fairness but then tries to cut support to pensioners, to people with disability, to their carers, to women and to young people—a Prime Minister who we now know and see every single day says one thing and then does another.

He says he believes in fairness and then he tries to sneak through cuts to pensioners. Whether it is on fairness, climate change, marriage equality or the republic, this Prime Minister says one thing and does another. By contrast, Labor will always put people first. That is why we have fought against so many of this government's unfair cuts. Unlike this Prime Minister, who puts power before principle, Labor will put people first, and that is exactly what we are doing by opposing this bill.

Mr WHITELEY (Braddon—Government Whip) (11:59): I am pleased that I have this opportunity to speak on the Social Services Legislation Amendment (Budget Repair) Bill 2015. I am going to move away from the notes and the facts of this for a moment to address the cries that we have just heard from the other side—and what a tired voice that is. The shadow minister who took a brutal axe to single mother payments not that long ago now stands in here and tries to preach to those of us who have tried to clean up the mess of the previous Labor government that left our nation's finances in such a state that—and anyone who is not aware of this should be made aware—it is costing us $100 million every day just to pay the interest bill on the debt that was accrued through those six long, hard years of Labor. Let me repeat that: that is $100 million every day. When you wake up, folks, every morning when the alarm bell goes off—kerching!—the taxpayers of Australia have to borrow $100 million just to pay the debt that was accrued by that lot on the opposite side.

Let's put this in perspective. When that lot over there took the Treasury benches in 2007, the budgets going forward—that is not just the budget of the time but the projected budgets going forward—under Howard and Costello were in surplus. Whether you liked that government or not, whether you liked the initiatives of that government over a 13-year period or not, the fact of the matter is that this country was living within its means, as I would expect people to do in their households and as I would teach my children to do. But in a short, six-year period, a dark part of the country's history, we have gone to a situation where we have to borrow so much money to balance the books each and every year that every day when the alarm clock goes off—kerching!—$100 million has to be borrowed to pay just the interest on the loan.

People know how their house loan works. It is hard enough paying the interest, let alone slightly chewing the capital away, on the statement that they receive each and every month. These are the facts of the matter. Those opposite can cry crocodile tears all they like, but the reality is that somebody, some government, some day, somewhere has to stand up to the truth of the matter. We cannot continue to live the way we are living. We cannot continue to put the future of our children, our grandchildren and our great-grandchildren into jeopardy. That is what we are doing, and I am not going to be a part of it.

I am not going to stand here for one moment and say that the decisions that have to be made by the executive government of this country are not going to be hard. They are. It is no different to decisions in someone's household. When major changes come up in your finances, you need to make changes. You need to make a difference in the way you spend your money, the way you go and earn your money and the way in which you may in fact choose to borrow money.

The reality—newsflash, folks!—is that the government of Australia cannot do everything for everyone. If you think that can go on, you are living in cloud cuckoo land. It cannot happen. It is taxpayers' money. Out here in the bowels of parliament we do not have a printing press that prints $50 and $100 notes every day. It does not happen. The money that this government have at our disposal to spend is the Australian people's money. They elected us to spend it on their behalf. It is their hard-earned money. They wake up every day and go and earn it. They come home and try to pay the bills, to give a good life to their children and to build a future for their families. It is their money that we are spending. The reality is that we are spending a hell of a lot more than their money. We are borrowing $100 million every day to clean up Labor's mess and pay down the debt that was accrued in just a very short period of time.

That is the context in which this bill, the Social Services Legislation Amendment (Budget Repair) Bill 2015, appears in this chamber. Those who were listening on radio, here in the chamber today or in their offices, would have thought from the cries of the shadow minister that we were going to cut the pensions of everybody the minute they stepped over the line out of this country for more than six weeks. That is not true. It makes for a very good sound grab, but let's get to the facts of this matter.

The reality for disabled support pensioners is that there is no real change. We are talking about age pensioners in this context. We all know that you do not receive an age pension until you are 65. In some cases now it is 66, 67 and 67½. Let's just think about this. The bill says that if you have been working and living in this country for 35 years, whether you started from overseas or not, this will not affect you. The six-week limit on being overseas does not exist for those people. The example of the shadow minister was of a person who arrived here in the early 1970s from, I think, Greece. I do not get it. What a terrible example to give. There is no doubt that that person has been working in this country for more than 35 years. If he and his wife want to go back and see family in Athens or wherever, this does not apply to them. It does not apply. People should push the pause button on their recording and go back and listen to what the shadow minister said. She tried to give the impression that we were going to cut the pensions of those who want to leave the country to see a sick mama and papa. That is just a wrong interpretation of this bill. If 65 is the pension age and you have been here 35 years, even if you were born in some other country, even if you arrived at the ripe old age of 30 you would still be eligible to go out of this country over and above six weeks and collect your pension. Those are the facts for everybody to consider.

If you have not been here 35 years, there is a proportional reduction. That is a fact. If you have been here only 30 years, your pension will not be taken away from you if you choose to go and live with family overseas in Europe or America for two or three months. Your pension may be reduced—that is true. But do not listen to this garbage that is coming from the other side with crocodile tears that we are cutting away the pensions of everybody. These are pure scare tactics. Those opposite are masters of them. They go to a special school for Labor politicians in their early days to learn the scare-tactics strategy for being an opposition member of parliament and a Labor member of parliament. These are the facts and they are what should be put on the table.

Those opposite have done nothing but oppose every effort of this government to get the budget back in the black. Are all the initiatives that have been placed on the table loved by the people of Australia? Of course they are not. Governments are not here to be loved by everyone. Governments have a mandate to do what they said they would do. We said to each and every one of the Australian voters, 'We want to come in and clean up the mess.' What I have come to determine is that, whilst they gave us that mandate and everyone cheered us on to do that, what some people actually meant was: 'Clean up the mess, do the difficult things, make the hard choices and make the changes, but just don't do them to me. Do them to my neighbour; do them to my footy mates, do them to my work mates, but do not do them to me.' It is a 'not in my backyard' sort of scenario. Well, it does not work that way. We are a nation. We are a family. We have to fix this problem together. We have to all take some of the burden, and we need to get the job done.

In this bill, there are a number of initiatives that will save hundreds of millions of dollars over the forward estimates. Whilst, to the average Joe Public, that sounds like a lot of money, the reality is that the savings in this bill alone—I have not done the sums; I am thinking off the top of my head—will probably save seven days of interest a year, if that. So there are still 358 days to go. Get it in context, folks. Here are the facts. Let us face the facts. Let us face the reality that we have a job to do.

The deficits of the Labor governments over those years totalled $191 billion. That is how much they spent, more than they earned, over six years. There was an extra $123 billion on top of that which they projected to spend more than they earned, and they gave us that as a beautiful inheritance on the day that we arrived here in September 2013. What a lovely inheritance to have! When that black briefcase was opened by the Treasury officials to give the dark news to Mr Hockey and Mr Abbott, I reckon that, as the little clips on it unlocked, it would have exploded in their faces. There was the truth: $191 billion more had been spent that we knew of, but 'Here, Mr Abbott; here, Mr Hockey, happy Christmas!' We had also inherited $123 billion in projected deficits. You think that we had a job ahead of us? Well, you got it right.

Every time we come into this place to bring about changes to the budget, to bring about a healthier response to the budget, they say no. They always say no. They are not interested in fixing up their mess. They are like the people that set fire to their rental property: they torched it, they trashed it and then they ran away, only to discover that the neighbours came to help save it. The fire brigade, the police and the emergency services turned up to get this thing under control, and they came back and shot everyone that was trying to put out the fire. That is pretty well what it is. That was not in my notes, but it had to be said, because the previous speaker just cried crocodile tears for 27 minutes and made no sense at all.

It is true that a couple of measures will no longer be part of government policy: the pensioner education supplement, which was introduced 30 years ago, with the aim of assisting the long-term unemployed to adapt their skills to rejoin the workforce; and the education entry payment, which is over 20 years old. Folks, we have lots of other programs in place that now provide that support. These payments are hangovers from 20 and 30 years ago, and there are savings in here across the forward estimates of $500 million that can go towards paying off the debt that I referred to earlier in my speech.

The job of government is not to please everyone; it is to do what the public would expect us to do—to live within our means. Imagine if every family in Australia continued, day in, day out—not giving a stuff—to spend and spend and spend, and borrow and borrow and borrow. I hear some of you saying, 'We are probably doing it too much anyway,' and there could be some truth in that, but imagine if everyone had that attitude. The government of the country should not have that attitude. It should have an attitude of far better stewardship than that. I like to think that that is what this government is putting its attention and its priorities into. Whether you like it or not, the initiatives in this bill are part of the solution, the greater strategy, to get the budget back under control.

There are a number of funding mechanisms that are now available to people when it comes to their educational outcomes. They are often collectively known as HECS. Every year, the government provides $3,500 million under HECS programs to assist people of any age to undertake further educational qualifications. So do not for one moment, those who are listening to this contribution, think that there will be nothing left for people as they strive to build on their educational qualifications.

One of the other initiatives in this bill, which I will wrap up on, is the portability of pensions. Whilst we are placing a new condition of just six weeks on people as they leave the country, I am concerned that there are some inconsistencies in relation to those that we are making this change for—in some cases, former prime ministers of the country. Let me put it straight. I have a little difficulty in accepting that we may have a bit of work to do here, but apparently it is all right, because former prime ministers are funded under a taxpayer pensioner scheme. But, as I read the paper at the moment, Mr Rudd, for example, has spent most of the last 12 months out of the country, on the speakers circuit, in advertising for Hillary Clinton, with Julia Gillard, who is now a so-called adjunct professor at some university. I would like to see some consistency—

Ms MacTiernan: God, you are mean-spirited. What about Malcolm Fraser? What about John Howard? You are absolutely unbelievable. What about Robert Menzies?

Mr WHITELEY: I do not care whether they are Liberal, Labor, Callithumpian—I do not care. I do not care if they are one of us or one of you. At the end of the day, I have written to the minister, saying, 'You might want to have a look at this.' Why should pensions for prime ministers be allowed to continue on indefinitely, if in fact we are changing it for others? Why should Kevin Rudd be able to live in New York or wherever for 10 months and collect his pension? I think we should have a look at that. I think the public would expect us to. They would expect some consistency. They would expect us to have some integrity on this, and I will write to the minister asking that. I thank the House. (Time expired)

Ms CHESTERS (Bendigo) (12:14): It is so classic for government MPs to stand up and say: 'We cannot be everything to everyone. We have to be honest. We're not here to be loved by everyone.' Then why are you going after only the lowest paid people in our community? Be honest with the Australian people. Don't just come in here and say, 'We've got to provide tough love; we've got to go after the pensioners; we've got to go after the young people and the unemployed.' Why aren't you going after the people who are really making a profit in this community? Why aren't you getting real about cracking down on multinationals who are not paying their fair share of tax? Why is this government so obsessed with going after pensioners and going after young people who are unemployed and not going after the people in our community who are getting a free ride—like big multinationals who are not paying their fair share of tax and wealthy superannuants who are getting generous tax breaks from this government? This government are not being real and genuine when they come in here and say, 'We've got to make the tough decisions.' The only tough decisions that these people are making are the tough decisions that hurt the people who can least afford it.

This is a government that is not committed to supporting those on the lowest incomes. This is a government that is here to prop up and support their mates in big business and support the people who actually have the means in our society. It is a government that is obsessed with attacking people on the lowest incomes, and this bill that is before us, the Social Services Legislation Amendment (Budget Repair) Bill 2015, is another example. All they are doing with these budget measures—they call it budget repair—is going after people on the lowest incomes. What have they got against people in our community on the lowest incomes? Where are the real tax reforms? Where is the real budget repair for the other end of town? They would have a little bit more credit with the Australian people if they would say, 'This is what we are doing across the board'. But no, instead—as we have now seen in two budgets—they are going after working families, they are going after Australian pensioners and they are going after our young people. The changes in this bill are another example of that.

They are changing the proportion of the pension payment to pensioners who are outside Australia. That is just a mean measure. It does not take into context the global community that we now live in, the relationships that we have with other countries. I have had a couple of people come and speak to me about how challenging it is for their mother, who receives a part pension from overseas, because she may have had her early years in another country and a pension here in Australia. They tell me that it is a nightmare to try to get the paperwork right—not just for Centrelink, not just for themselves but for the country overseas. There has got to be a better way to do this, and this government and these measures are just going to make that challenge more complicated.

This bill also introduces measures contained in the 2014 budget. These are changes that the government have not been able to legislate. These are the abolition of the pensioner education supplement and the education entry payment. How could you deny pensioners who want to gain further education a supplement to do so? It shows that this government and these MPs do not understand who the pensioners are in their community. They do not understand that there are people on a pension who want to do more, who want to seek an education.

It is very expensive to study these days in Australia—very expensive. And yet this government is saying to those who want to put their hand up to do extra study, to do extra coursework, 'We're not going to support you in that.' It demonstrates how out of touch this government is, because they do not understand how hard it is to survive on a pension in Australia today.

There are several types of people on retirement incomes in our country. I have mentioned the wealthy superannuants at one end; then we have people who are on super; then we have people who are on a mix of super and pension. They are the people who are surviving. Then you have people who are solely on a pension. The only way you can describe the circumstances of a lot of them is that they are living in poverty. If they have been fortunate enough to be able to pay off their home, if they have solar panels on their roof so they can knock out that one electricity bill, then those pensioners are making ends meet. But pensioners who might be renting, pensioners who do not have solar panels on their roof and pensioners who are on a single income are living in poverty, and they need more support from this government, not less—particularly women who find themselves in the situation where they want to do extra study, yet this government will not be supporting them if these measures go through.

This bill also introduces measures to freeze the income-free areas for all working-age allowances other than student payments and for parenting payments for singles, from a new start date of 1 July 2016. This bill also maintains the levels for three years for income-free areas and other means-tested thresholds for student payments, including student income bank limits, from 1 January 2016. This is a measure that is just mean. They are going to say to people who go out there and start earning a little bit of extra money, 'We're keeping the amount that you can earn at a set level.' So to people who might be on a payment whilst they are studying and to people who might be on a payment whilst trying to find more work, this government is saying, 'Your income bank is frozen.'

You can tell that many members of the government, when they were studying at university, did not try to survive on youth allowance. That is what it was back in my day. You are forcing people into poverty because they cannot earn a few extra dollars to subsidise their youth allowance. The cost of living goes up every single year: the cost of the basics, the cost of rent, the cost of books and the cost of study go up. So, if people want to pick up that extra shift at work, they now cannot, because they will lose part of their youth allowance. What this government has not realised—because they are so out of touch with people in the lowest income bracket—is that they are forcing people into poverty. If they take the extra shift, they are no better off, because they lose part of the income that they receive through youth allowance and their other payments.

We need a system that is fair and that acknowledges people who are transitioning into work and that supports them and does not force them into poverty. Yet that is exactly what this government, in freezing the income-free areas, is doing. They did this when they were last in government. They do not genuinely believe in supporting people back into work. They prefer the tough love approach—taking out the big stick. That is exactly what they have done here. They do not understand how hard it is to survive on these small incomes. They are now saying to those who may pick up extra work, 'You might have to give up that extra shift or lose a bit of the small income that you get from us, because we are freezing your income bank.' It is one of the meanest measures that are being put forward by this government. The government are so focused on protecting the one per cent that they forgot to do what government should be doing, which is to support the 99 per cent, particularly those on small incomes.

My electorate of Bendigo is a classic example of most regional electorates. About 30 per cent of the electorate survives on less than $600 per week. That means 30 per cent of the electorate are single-income households. Most of them are on some form of payment, whether it be a pension, Newstart or a combination of part-payment part-work. There is simply not enough work available today. This government has done very little to help create jobs in regional areas like my area of Bendigo. A lot of people are complaining and do find it hard to get the extra work. I know from working with UnitingCare of Bendigo in my electorate over the break that they are seeing more and more working families presenting for emergency relief, both before Christmas and after Christmas with the return to school. Our community of Bendigo have been incredibly generous. They have donated money to help UnitingCare help these families. There are quite expensive schoolbook lists this year. In one of our schools the book list was $1,000. For a family with three children to find $1,000 for each child for their schoolbook list is expensive, particularly straight after Christmas.

So these families are already doing it tough, and the measures that are being put forward in this bill, if they are enacted, are just going to make it that bit harder. It is another demonstration of how this government does not really appreciate or prioritise supporting those who are on the lowest incomes. The rhetoric they will use when they stand up here is that it is about the debt left behind by Labor; that it was Labor's problem; that Labor spends, spends, spends. It is not true. This government's plan, and what they are prioritising, is not about helping the people who most need it. That is the real difference between Labor and Liberal. It is about how you prioritise your spending and how you prioritise where government dollars will go.

They have demonstrated that they are not going to prioritise our schools. They are not going to put the funding back into the Gonski reforms to fund schools. Let us put that into context. A small primary school in my area, Epsom Primary School, has its library in a hallway. Their budget for buying new books this year is less than $1,000. Yet we have an Attorney-General who spent $15,000 on moving his personal library at Parliament House and $13,000 on his personal book collection. It is another example of how this government is prioritising the one per cent and not the rest of the country. If this government were serious about being fair and measured it would see reform at the other end of the tax scale and income brackets. That is not what we have seen to date.

It does not matter who the Prime Minister is—whether it be Tony Abbott or Malcolm Turnbull—the Liberal government inherently do not want to support people in our communities on low to middle incomes. Time after time we see bills come before this House that go after the very people who most need the support of government. The cuts in these bills may have originated under the former Prime Minister and the former Treasurer but they have been continued by this Prime Minister and Treasurer. It is another example of how the government say one thing and do another. This is a government that, for all of their rhetoric about change, have not changed, because deep within their values they believe that those on the lowest incomes should just be able to pick themselves up. It does not work that way.

The people that you hurt the most by these cuts are our pensioners, who have worked hard their whole lives, or the young people in our community who are trying to get ahead. Currently pensioners who stay overseas for 26 weeks receive the full pension. Following that time the pension is reduced at a rate depending on how many years the pensioner has worked overseas. That is just an example of how this government does not understand working, whether people have worked, what is working and the relationships we have with other countries. People know that it was Labor that increased the pension and built those reforms in, starting to get the pension back to an income that people could survive on. That was voted down by the opposition, the present government, when it was first introduced, for very similar reasons—arguing that this country cannot afford it. We can afford it. We just need to get serious about how we are raising our revenue. We have a government that prioritises the most wealthy self-funded retirees over those who need the greatest support.

If this government were serious about our young people we would see a genuine job creation plan on the table, not these attacks on their income-free banks. Time and time again I have this raised with me in the electorate: 'I'm worried about my son or daughter—they just can't get a start.' Entry-level jobs today do not exist like they did a generation ago. It is something that people on the other side seem to ignore every time they come in here and demonise young people, forcing them into poverty. If this government were serious about the next generation they would be out there partnering with industry to rebuild our apprenticeship program, rebuild our vocational education program and rebuild our entry-level jobs that just do not exist today. The measures in this bill go after the very people that this government or any government should be supporting. Instead, they choose to go after them again. I hope, as with previous attempts by this government, that the crossbenchers stand with Labor and vote against this bill.

Dr JENSEN (Tangney) (12:29): The Social Services Legislation Amendment (Budget Repair) Bill 2015 is timely and critical to the long-term economic health of our country. Maintaining our current high standard of living in the future depends on it. This bill is another brick—another protection—in the dam wall against the sea of red ink left by Labor. So why is this bill so important? Why is it so important to take action, and how bad is this mess? After six years in power, Labor left Australia with a broken budget, a damaged economy and a serious mess to clean up. Labor delivered deficits totalling $191 billion. Treasury projected that without policy change the budget would be $667 billion in deficit.

Honourable members interjecting—

The DEPUTY SPEAKER ( Mr Vasta ): Order! The member for Tangney has the call.

Dr JENSEN: This would mean that we would have 16 unbroken years of deficits—the longest stretch of deficits since World War II. Labor's waste and mismanagement while in government included a cost blow-out of at least $29 billion with the National Broadband Network and the disastrous pink batts program, which cost $2.8 billion and, most tragically, four lives. Days lost to strikes more than doubled. Under Labor the number of unemployed increased by over 200,000, and the unemployment rate jumped from 4.4 to 5.7 per cent.

They broke a pre-election promise and introduced the world's largest carbon tax. In its first year the carbon tax was a $7.6 billion hit to the economy. When the $900 stimulus cheques were sent around, 27,000 Australians who were living overseas received them, including 21,000 deceased persons. Cheques to dead people: it really is indicative of pump prime economics! The only real stimulus occurring from stimulus economics is at the ballot box, and even that is not sustained or sustainable.

Labor's failed border protection policies resulted in 50,000 illegal arrivals on more than 800 boats, causing a cost blow-out of more than $11 billion. Tragically this also resulted in over 1,100 drownings at sea. Labor introduced more than 20,000 new or amended regulations, creating new red tape for business. I remember the proud boast about how much legislation they were putting through parliament. This place is supposed to be about putting quality legislation through and not just putting quantity through.

During the six years Labor held government household health costs increased by 35 per cent, education costs increased by 39 per cent, gas prices increased by 71 per cent, water and sewage prices increased by 79 per cent and electricity prices increased by 101 per cent. Investment in defence fell to 1.56 per cent of GDP in 2012-13. This was the lowest level of defence funding since 1938. The 10.5 per cent cut was also the biggest since the Korean conflict. Under Labor, hospital waiting times for elective surgery grew from 34 to 36 days. They promised 64 GP super clinics but delivered only 33.

When Labor came to office they inherited a surplus of $20 billion, with no net debt and $45 billion in the bank. In Labor's five budgets from 2008-09 to 2012-13 they delivered $191 billion of budget deficits. Their deficits have reversed Australia's strong position of having no net debt. Labor effectively chaired the fastest deterioration of the Australian government's debt position in modern Australian history. This was largely because of Labor's spending problem—not because of a revenue problem. Labor increased spending sharply over its six budgets, including increases of 16 per cent, or $44 billion, and almost seven per cent, or $21 billion, in its first two budgets alone. Over Labor's five budgets government spending increased by over 50 per cent, or $137 billion.

Since the coalition came to power, we have worked tirelessly to fix the problems inherited from Labor. We, the coalition, believe in being an agile and nimble government. This is clearly evident in what we have achieved and the work that we have done since entering government. We are actively repairing the mess left by Labor and returning the budget to a strong and sustainable position. However, the reality is that our social services bill represents almost a third of the Commonwealth budget, and it is increasing faster than any other area of government. Without further restraint our welfare bill is expected to grow from $149 billion in 2014-15 to $277 billion in 2025-26. It is evident from these figures that we need to restrain the growth in welfare and continue to fix the mess left by Labor.

Although significant savings in the Social Services portfolio have been secured, it is imperative that we continue with our efforts to spend our social services budget more effectively in order to reduce long-term pressures. This must be done so that we can better support those who need it most, ensuring also that Australia's social security safety net is sustainable for future generations. The government has proposed four measures in the Social Services Legislation Amendment (Budget Repair) Bill 2015 in order to achieve this.

The first measure, in schedule 1, will tighten proportionality requirements for pensioners from 1 January 2017. This measure will reduce the amount of time a full pension is paid to pensioners absent from Australia from 26 to six weeks. After this period, payment will be adjusted according to the length of the pensioner's working life residence. This measure will also treat all people who have spent less than 35 years of their working life in Australia the same, whether they were born in Australia or overseas. Those who have spent more than 35 years of their working life in Australia remain unaffected.

This measure does not impact on the length of the portability period. The age pension and a limited number of other pensions will continue to be payable overseas indefinitely. Only the amount they receive after a six-week absence will change. Those who have spent fewer than 35 years of their working life in Australia will see their pensions reduced once they spend more than six weeks outside Australia. The amount the payment is reduced by is based on the proportion of their working life spent in Australia. This measure will continue to reinforce and strengthen the residence based nature of Australia's social security system. After a six-week absence, payment will be adjusted according to the length of time a person has resided in Australia during their working life.

The coalition has made this change because we believe a person's retirement costs should be fairly distributed between the countries a person has spent most of their working life in. Our expectation is that a person will be eligible to receive a pension from the country in which they have spent a proportion of their working life in. Australia now has 30 international social security agreements around the world to support people living and working in more than one country. These agreements generally allow Australian residents to maximise their income by helping them claim payments from other countries where they have spent part of their working life.

Under measures 2 and 3, the government will also cease the pensioner education supplement and the education entry payment, saving Australian taxpayers around $300 million over the forward estimates. In spite of its name, the pensioner education supplement is not available to people receiving the age pension. It assists students with the ongoing costs of full-time or part-time study. The most common payment type for people receiving this is the parenting payment single, at 43 per cent, followed by the disability support pension, at 41 per cent, and the carer payment, at nine per cent. As at the end of September 2015, PES provided fortnightly payments to around 46,000 people. The education entry payment is a lump sum payment paid once a year to eligible recipients, removing financial barriers to education by providing financial assistance for study entry payment. In 2014-15, around 83,000 recipients received an EEP lump sum payment of $208.

Originally, these payments were introduced to assist long-term income support recipients who had been out of the workforce for a long period of time. The payments helped recipients improve or rebuild their skills to be more competitive in the labour market. However, since the introduction of these payments, several other policies have been introduced to reduce the length of time that income support recipients, including single parents who have the capacity to work, remain out of the workforce. These policy changes include varied eligibility and participation requirements for parenting payment, as we recognise that, as children age, their parents' capacity to work increases. We have also made changes to the assessment and eligibility criteria for payments for people with a reduced capacity to work, requiring these people to work, or look for work, in line with their capacity. The coalition has created more appropriate channels for government funded study and training assistance for income support recipients. These include the Higher Education Loan Program and the FEE-HELP and VET FEE-HELP tuition loan programs through employment service providers.

Ceasing these two payments will help reduce the number of payment supplements and is consistent with the recommendations of the McClure review of welfare. McClure's review highlighted 20 main payment types and 53 payment supplements that resulted in a complex income support system.

Measure 4 will reintroduce elements of the 2014 budget savings to maintain the income-free areas and means test thresholds for all working-age allowances. Parenting payment single and student payments, including student bank limits, will also be maintained and not indexed for three years. Pausing indexation will allow us to realise budget savings and help slow the growth in social security expenditure.

We, the government, believe that these are sensible measures that will help us back to a surplus. They will also allow us to continue to fix the budget mess we inherited from Labor. These changes will help achieve long-term sustainability of the payments system, while ensuring Australia has a targeted, means-tested income support system that provides financial assistance for those most in need, all the while encouraging self-provision.

After signing into law the social security amendments of 1961, John Kennedy said:

The Social Security program plays an important part in providing for families, children, and older persons in times of stress.

But he added this:

But it cannot remain static. Changes in our population, in our working habits, and in our standard of living require constant revision.

If we want to remain an agile and innovative government, we need to regularly assess the measures we take and evaluate their success. It is important that we continue to find a better way and the best way forward, learning from our predecessors' mistakes, growing from our past attempts and, therefore, providing the Australian people with solutions and measures that achieve long-term sustainability.

It is important that we acknowledge changes that have occurred, not just in the Australian government or our coalition policies but also in our working habits, living standards and population. Our world continues to become more globalised and interdependent. It is important that our policies reflect this. This bill does that by updating pension measures, removing out-of-date education related payments and acknowledging that more appropriate channels of government funded study assistance are available. We are able to drive the government back into surplus and clean up the economic mess that we inherited from Labor.

Ms RYAN (Lalor—Opposition Whip) (12:44): I rise to join this debate on the Social Services Legislation Amendment (Budget Repair) Bill 2015 to stand up, as I always do, for my community and to oppose each of the measures contained in this bill. It is not surprising that this government needs a budget repair bill, but not as is claimed for anything that it can attach to the previous government—because this government, of course, has doubled the deficit and is struggling with that narrative. It is struggling to convince the Australian public that that is not the case, when every day in this place we see that it is the case.

Not unusually, in introducing this bill the government is once again attacking the most vulnerable Australians. We on this side of the chamber will stand and defend the most vulnerable Australians. This bill cuts support to Australians who have worked hard for their entire lives. It cuts support to people who have made contributions to their families, to their communities and, indeed, to the nation. It seeks to cut support for pensioners. Let us be clear, front and centre, what this legislation is about. It is about repairing the government's issues and repairing the government's doubling of the deficit by cutting support to the most vulnerable in our communities. That is what this bill is about. This bill targets seniors. It targets the most vulnerable.

Let us have a look at this government's record of the last 2½ years. This government's record on pensioners is appalling with cuts that they have tried to get through this parliament since 2013. Every time that they have come into this chamber to attack pensioners and to cut their living wage we on this side have stood up to defend those pensioners. We have had some success. They wanted to introduce cuts to pension indexation—cuts that would have seen an $80-a-week cut to the pension over 10 years. There were cuts to 330,000 pensioners through changes to the pension assets test. There were cuts to pensioner concessions through $1 billion worth of cuts. That was, if you remember, part of their shift of the blame and the cost to the states.

Probably the most venal thing was the government's wanting to increase the pension age to 70, making Australia the only country in the world with a pension age of 70. They were expecting that people who had worked hard all their lives in manual labour could continue to do that until they were 70. It is an important point to note because it goes to the logic behind all of their cuts. As we go to the detail in this bill you will also see that they want to cut support to our seniors and cut support to pensioners who would like to continue their journey of lifelong learning. They want to cut the support that would allow an age pensioner to engage in education. So you would have to work until you were 70 and then, once you were 70, you would be discarded on the scrapheap. You could not go to university, you could not re-engage, you could not decide, with support, to continue your lifelong journey in education. These cuts go to the government's attitude to the senior members of our communities. It goes to the members of our communities that have given so much to those communities.

The first measure I will talk about is the cuts to support pensioners who spend time out of Australia. The government are now seeking to reintroduce a measure from the 2015 budget that changes the proportional payment of pensions outside Australia after six weeks—currently that change is made after 26 weeks. The crux of the first measure in this bill is that the Liberals want to make it harder for some pensioners to continue to receive their full pension whilst they are overseas. Currently they receive the full pension for 26 weeks, but the pension will be reduced to a rate that depends on the number of years a pensioner has worked in Australia. The government are proposing that from January 2017 that 26 weeks will be reduced to six weeks. This unfairly punishes pensioners across the country, but it particularly punishes pensioners in my community. It punishes those who choose to spend a period of time overseas visiting family. This has particular impact in multicultural communities, obviously. It is important to remember that 40 per cent of our pensioners were born overseas. In my community there is large number of pensioners who were born overseas.

As the member for Jagajaga mentioned, the Refugee Council of Australia has had something to say about this. It is opposing this measure noting that, due to numerous problems with family reunion programs, refugee community members are often required to travel overseas for long periods of time to visit their relatives. This is particularly important for those people who may have sick or dying relatives in secondary countries of asylum. The assumption that some people may be making that journey to return to their birth country is just not accurate. It could be that as someone who came to this country as a refugee and is now a citizen has a sibling, perhaps in New Zealand, that they want to care for. This legislation would be punitive to those wanted to do that.

Clearly the migrant and refugee communities are very much opposed to this change. If you think about retirement, you think about the one big trip. If you are taken away from caring for a relative, you can think about that one big trip. And, as the previous member said, if you think about the global nature of our modern lives and the amount of travelling Australians, whether they were born in this country or in others, then this bill seems out of whack with our cultural expectations and with the new, modern world. We are great travellers. We have many citizens who have family living in other countries. As pensioners they are not wealthy. This bill means they can visit relatives at no loss for six weeks, but to avoid that loss they must come home after that. This might be fine for the wealthy who can afford the next plane trip, but others may have spent their savings on airfares for their one big trip. Now that one big trip will have to be limited to six weeks before you incur a loss.

This government does not seem to grasp what Australians value. They value family. They value weddings. They travel for funerals. They may travel for an impending birth. They may be going overseas to support a family member who has had a child, to do some caring for that child. Now that will incur a loss, if it is for longer than six weeks. But, most critically, are those areas of caring responsibilities—where this will limit their ability, without loss, to go and care for a relative overseas. It comes down, as do most things in this chamber, to this government's priorities and to where fairness comes into those priorities. And fairness does not seem to be a priority for this government. They say they have a budget problem, and their answer to that is to place punitive measures on the most vulnerable in our community.

This government does not like to limit its attack on the vulnerable to just the elderly. The bill also includes the abolition of the pensioner education supplement, which I referenced earlier—a small payment of a maximum of $62 a fortnight that this government is hell-bent on cutting. It is hell-bent on cutting support for someone to engage in education—not just cuts in schools education, not just cuts in TAFE, not just slashing support for apprentices; the elderly cannot get educated in this country, either. It speaks volumes of their attitude to education and learning. The pensioner education supplement is a payment of between $31.20 and $62 a fortnight, depending on the levels of study, to help pensioners, disability support pensioners and carers who are studying. It provides a small but important payment to help with the costs of study and can be used to purchase study aids and items such as textbooks, academic resources, printing, transport and internet connections.

Again, the punitive measures come through here; the anti-education. There is nothing new here—it just reinforces the attitude this government has. It reinforces the message to our pensioners, to those people who have given so much in this community, that 'You are finished. You have nothing more to contribute.' This again sends them the message that they do not deserve the dignity of a decent retirement.

This measure will see around 47,000 recipients lose their supplement. It will hurt those who have decided, quite admirably, to improve their financial position, possibly to broaden their minds or to broaden their horizons through the power of education.

The third measure in this bill seeks to abolish the education entry payment, a payment that goes to recipients of Newstart, the parenting payment, partner or widow allowance. In 2013-14, about 87,000 people received this payment. This, too, is a payment designed to assist vulnerable people with study costs. This government's attitude to education and the most vulnerable in our community is extraordinary.

Finally, the bill also introduces a measure that was contained in the 2014 budget—you know, the 'lifters and leaners' budget; the one we all remember so well. A lot of the rhetoric from the other side of the chamber is about being agile. This certainly demonstrates agility, because we have seen this change in indexation trick before. It was also in the 2014 budget around pensions: let's just pause indexation without any reference to the loss that means to somebody's living allowance and their ability to have a decent retirement or a decent life.

This measure predominantly impacts students and some working parents on income support—again, people who are trying to make a difference in their own lives, trying to get an education, to step up, to go on to other things. Again it is that trick—and it shows agility, alright. We are going back to the 2014 budget.

This bill really goes to the heart of the way this government is operating. They have found themselves a new leader but, as Prime Minister Turnbull so eloquently put it yesterday, after 141 days nothing much has changed. This piece of legislation before us today confirms exactly that: the leader has changed, but the strategy has not. They are still going after the most vulnerable, they are still coming after Australia's pensioners and they are still going to punish the most vulnerable to make up for their lack of vision and for their doubling of the deficit. They need to treat pensioners with respect. They need to treat the most vulnerable in this country with respect. I oppose this bill, as do all members on this side of the House.

Mr TUDGE (Aston—Assistant Minister to the Prime Minister) (12:59): I think almost everybody in Australia except for the Labor Party understands that we have a fiscal problem, that the expenditure of governments, despite all of the work that this government has already done, is still well in excess of the revenue which the government collects. Almost everybody in Australia knows this. They know that, after all the work we have done, our expenditure is still about 10 per cent higher than the revenue which is collected. They know you just cannot continue along the path of having expenditure exceed your revenue and, consequently, having budget deficits. In some respects, it is common sense that you cannot have budget deficits indefinitely into the future. Everybody in Australia, except, it seems, the Labor Party, understands that that is just not a sustainable position.

Of course, everybody in Australia also understands that it was the Rudd-Gillard government that put us in such a difficult position, that turned the budget position from being in a great surplus—with $20 billion worth of surpluses each year—to having very severe deficits. In their very short amount of time in office—too long for most Australians—they clocked up $191 billion worth of budget deficits and they locked in expenditure of 3.7 per cent going forward. In the forward outlooks, there was billions of dollars of deficit as far as the eye could see. It was not sustainable and it is not sustainable. As a nation, we simply cannot sustain having ongoing large budget deficits.

If the opposition do not want to listen to us in making this point, then hopefully they will listen to the Treasury Secretary, who just a week ago made this point very clear. He said that if we do not get on top of the fiscal repair job, particularly on the expenditure side, then future living standards will be at risk. He said that very clearly. I will quote what he said. He said:

Why should the living standards of future generations be compromised just because we were not willing to make sacrifices to the unsustainable growth of government expenditure?

He squarely pointed out, very clearly, that it is the future living standards of our children that are at stake when we talk about budget repair. That is what is at issue and that is the underlying context of these bills before us today.

There are a number of ways you can think about and address a fiscal problem. First, you can just put your head in the sand, as Labor seems to do. Second, you can constantly raise taxes to try and chase an ever-increasing expenditure. Third, you can get expenditure under control and concurrently grow the economy faster. Perhaps the greatest difference between the two parties at the moment is our differing approach to this problem and which options we pursue. It is quite clear that the Labor Party is pursuing accommodation of options 1 or 2—put your head in the sand in relation to the fact that we even have a problem or constantly propose new taxes to chase ever-increasing budget expenditure. We, on the other hand, strongly favour option 3—that is, budgetary expenditure restraint combined with making the economy grow more rapidly.

Of all the contributions we have heard from the Labor Party today, almost none admitted that there was actually a budget problem to start with. I do not think any of them did. Despite the bill itself been called the 'budget repair bill', I do not think a single contributor from the other side said that we have a problem and that we need to deal with that problem. Yes, there are some who admit that there is perhaps a problem in terms of the sustainability of our fiscal finances. But their solution is of course just more taxes. We have already had from the Labor Party this year additional taxes for superannuation, despite their saying that there would be no changes; additional taxes for cigarettes; and additional taxes on companies. And, no doubt, there will be many more policy proposals for more taxes from the Labor Party between now and the election. That is their approach to the fiscal problem—either ignore it altogether and say it does not exist or constantly increase taxes to chase the tale of expenditure.

Our approach is not that. Our approach is expenditure restraint. When you look at the data it is actually the expenditure side of the equation which is the problem rather than the revenue side of the equation. On the revenue side our revenue as a percentage of GDP is roughly where the 10-year average is, whereas the expenditure side of the equation is still at GFC levels. It is still well above the long-term average at 25.9 per cent of GDP, whereas the longer term average is about 23 per cent of GDP. That is why we believe it is the expenditure side which must be restrained, and that is what we are doing. And we are not just doing that but also growing the economy more rapidly. We are putting in place policies that will do that, including of course our infrastructure plans, lowering some of our taxes and our innovation agenda. And, right now, we are going through a tax reform process to again try to stimulate the economy and get it to grow faster.

Of course, if you do those two things—if you have expenditure restraint, which we are putting in place, and you grow the economy faster—then over time you get control of the budget and get back into surplus. We are doing exactly that and we are doing it successfully. We have stopped expenditure growth. There was 3.5 per cent real growth under the Labor Party and it is now below two per cent ongoing. Meanwhile, we now have the fastest growing economy in the G7 at about 2½ per cent. It needs to be faster, but it is still about 2½ per cent. Consequently, if you are growing the economy faster than your expenditure growth, over time your expenditure as a percentage of GDP declines and you have the budget under control. That is our economic and fiscal strategy in relation to the budget. I think it is sensible. We are doing it carefully and we are managing it well.

The Social Services Legislation Amendment (Budget Repair) Bill 2015 is very much within that strategy. It proposes further measures for modest restraint to the largest section of the budget, which is the welfare section. As you probably know, Mr Deputy Speaker Vasta, the social services element of the budget is about a third of the entire budget and is growing more rapidly than any other elements of the budget. If we are not addressing that element and trying to restrain expenditure then we will have great difficulty getting on top of the expenditure problem overall. Again, we have already put through many measures in this area, and Christian Porter, the social services minister, is doing a terrific job going through the entire portfolio and finding more savings that can be made in a sensible, responsible way.

The measures in this bill in front of us today continue in that vein. Perhaps I could mention just a few of them that I think are sensible measures and that are done within that context of necessary budget restraint. For example, from 1 January 2017 the government will tighten proportionality requirements for pensioners. This measure reduces from 26 to six weeks the amount of time a full pension is paid to pensioners who are absent from Australia. This measure treats all people who have spent less than 35 years of their working lives in Australia the same, whether they were born in Australia or overseas. Those who have spent more than 35 years of their working lives in Australia remain unaffected. This measure does not impact on the length of the portability period. The age pension and a limited number of other pensions will continue to be payable overseas indefinitely. Only the amounts that may be received after a six-week absence will change.

This measure will reinforce and strengthen the residence based nature of Australia's social security system. There are already about 30 international social security arrangements to support people who are living and working in more than one country. Generally these agreements allow Australian residents to maximise their income by helping them to claim payments from other countries where they have spent part of their working life. This is a further measure in that vein of expenditure restraint. It saves in the vicinity of $168.4 million over the forward estimates, and we think it is a reasonable proposal, given the stresses on the budget.

The additional measures include the cessation of the pensioner education supplement and the education entry payment, which would save Australian taxpayers around $300 million over the forward estimates. The pensioner education supplement was introduced in 1987 to assist single parents with the ongoing costs of education. Despite its name, the pensioner education supplement is not actually available to people receiving the age pension. Rather, it tends to be received by people who are on parenting payments, disability support pensions and carer payments. It is provided to about 46,000 people. When this payment was introduced, both of the payments aimed to assist long-term income support recipients who had been out of the workforce for a long period of time by helping them improve or rebuild their skills to be more competitive in the labour market. However, since the introduction of these payments several policies have been introduced to reduce the length of time that income support recipients, including single parents who have capacity to work, remain out of the workforce. Policy changes include varied eligibility and participation requirements for parenting payments, recognising that parents' capacity to work increases as their children age.

I think these measures are reasonable savings measures in the context of our fiscal challenges. None of the savings measures that we put forward in this House are easy or straightforward. Expenditure restraint is never easy. It is much easier to spend money than it is to exercise expenditure restraint. But the fact of the matter is, as I outlined at the beginning of my remarks, that we have an obligation—a responsibility as members of parliament—to the Australian people to act in their long-term interests. And acting in their long-term interests means we must get control of the government's expenditure. I know the Labor Party does not accept this, and I wish they would listen more closely to people such as the Treasury secretary, who has made this very clear.

These bills go towards those ends. They are reasonable measures. They are not straightforward measures, but they are reasonable measures in that context. If we do not put in place measures like this—which do get control of the budget, which do mean that our overall expenditure growth maintains at a reasonable level below economic growth—then we will have a very serious financial challenge on our hands in the future and the living standards of our children will be lower. That is what is at stake with the budget measures we are putting in place. I commend this bill to the House.

Mr HAYES (Fowler—Chief Opposition Whip) (13:12): The previous speaker on this bill, the Social Services Legislation Amendment (Budget Repair) Bill 2015, said that matters of budgetary consideration in relation to social services are difficult. I accept that they are difficult, because they directly impact on people who are least able to protect themselves. It will not come as a surprise to you, Mr Deputy Speaker Vasta, that, like other colleagues on my side of the House, we oppose these measures. This bill introduces measures from the 2015 budget that change the proportionality of payments for pensioners who travel outside Australia. It reintroduces measures contained in the 2014 budget that the government has been unable to legislate. Those measures deal principally with the pensioner education supplement and the abolition of the education entry payment. Further, the bill deals with other measures of the 2014 budget, particularly in relation to indexation.

I would like to concentrate on only a couple of these measures. I am happy that the member for Hughes is in the room here, because he will understand—and we have adjoining electorates. My electorate, in particular, is the most multicultural electorate in the whole of Australia. It is something that those who visit there—and I have noticed that the member for Hughes frequents there—

Mr Craig Kelly interjecting—

Mr HAYES: I understand he likes yum cha. That is why he goes there. He will understand when I say that the colour, the vibrancy and the diversity of my community is something to be very proud of. More than 60 per cent of the people in my community were born overseas. My community is also one of significant need. It is not a rich community. My community certainly has a significant proportion of residents who live with a disability. We have high unemployment and, regrettably, dreadfully high youth unemployment. These are things that we need to work, hopefully, in partnership with the government to do something about. My area is also one where the vast majority of refugees have come to this country. I will just take a couple of groups. Forty years ago was the fall of Saigon. We commemorated that last April. After the fall of Saigon, in 1975, the Fraser government opened the doors to the first wave of Vietnamese refugees to this country—some 50,000. I think we are all indebted to his foresight in doing that. Opening the doors to those 50,000 did not mean that that was it. Refugees flowed from Vietnam for years and years to come. As a matter of fact, some 200,000 have joined us and have made a marvellous contribution.

One of the things to note, when dealing with an immigrant and refugee based community, is not only the way that they adapt to their adopted country but also the way that they continue to support people at home. They take responsibility for the elderly. They take responsibility for those who could not escape. They take responsibility for them in a family capacity by looking after their welfare. In my office—and no doubt the member for Hughes experiences this as well—we are forever helping people bring relatives in for visitations and ensuring that people from Australia can visit overseas. Some of those visits overseas, whether they are for funeral arrangements, the welfare of families or are in relation to various matters of property settlements, take many weeks—a lot more than six weeks. I know that the government has a view that after six weeks the proportionality test for those who are travelling overseas will reduce the age pension. As it stands at the moment, after 26 weeks the pension is reduced. The government want to reduce that to six weeks. I do not know what the experience is of other members here, but I know for a fact that for people in my community who have left the workforce and who travel overseas to undertake family and community responsibilities, to look after the interests or the welfare of family members et cetera, their visitation is normally longer than six weeks. We are going to say to those people: we are going to cut your pension; we are going reduce it by up to $61 a fortnight. That is pretty significant. We are talking about age pensioners. We are not talking about superannuants; we are talking about age pensioners. They are not going to be able to come back and say, 'I will make up that money with an extra shift or some more overtime.' These are people who lack the ability to make that up.

Surely the government is not trying to tell people that if you are an immigrant to this country and an age pension, if you are a refugee to this country, if you have worked and participated to the full and contributed to the Australian community, not only by paying taxes, you are not entitled to go away for six weeks, regardless of how long you have been here. That is a pretty harsh position being adopted by this government.

I think when members participate in this debate they should not try to say, 'Well, this was in the 2015 budget, so therefore we're trying to deliver budget repair' and all the other things that flow off the tongue. I think they have to start thinking of the people in their electorates—the people who are dependent on an age pension. I know that my electorate is not unique. I know that the member for Gellibrand also has many Vietnamese in his electorate. We need to think of the composition of our electorates and about the contribution that people have made. The fact is that we are now going to say to these people: unless you have been here for 35 years we are going to reduce your ability to travel, and we are going to ensure that by having a disincentive. If you are away for more than six weeks, we are going to cut your age pension. I just think that is unAustralian.

If the government is going to make changes to deal with the budget, if what those on that side of the House are trying to tell us is that debt is a problem, then I am sure—if I can use the words used long ago by Joe Hockey—'more debt is not the answer'. You only have to look at the increase in debt since the coalition took office to see that there is only one way that they have gone—and that been to increase the debt of the nation. But even with all that, the thing that they should not do is target those least able to afford it.

There is some reluctance by those on the other side to target international businesses, which, according to all the reports, have been very successful in minimising and sometimes totally avoiding paying tax in this country. I would have thought that that would have been a priority. I would have that having very, very generous provisions in superannuation, catering for the high-end earners would have been a priority. Again, I would have thought that those would have been the priority, not doing what they started to do in the budget of 2014 and target aged pensioners and people supported by disability payments and those who are on carer payments. That is not the message a government that cares about people should be putting out.

I say the government generally because we are all in this place as a parliament, and I think we are all here hopefully for the right reasons—that is, making a difference for the better in our respective communities. If we are going to do that, the priority can never be to target those least able to afford it. This is a bill which is one of many that seems to do just that. And that is why we say that this is inappropriate and it should not proceed. If the government is as concerned as they say about the budgetary position, I am sure that they will find the support of the opposition in measures such as multinational corporations paying their fair share of tax. They will get support to address gross inequities in superannuation. There are many issues that we would work together on but, when the attack is on those who are most vulnerable in our society, you can always expect the Labor Party will stand up to protect them.

Mr CRAIG KELLY (Hughes) (13:23): I am pleased to rise to speak on the Social Services Legislation Amendment (Budget Repair) Bill 2015. 'Budget repair' are the key words of this bill, because we do have a budget that is in desperate need of repair. I should not have to remind the House that we are now coming into the ninth year in a row of budget deficits.

Starting off we note that the last budget the previous coalition government handed down, under the management of John Howard and Peter Costello, had a $20 billion surplus. And then, in 2008-09, the Labor Party took over and they started off with a $27 billion deficit. In 2009-10, the supposedly temporary budget deficit was $54 billion. In 2010-11, there was another $47 billion deficit, and they followed that in 2011-12 with another $43 billion deficit. In 2012-13, with a little bit of tricky financial accounting and shifting some expenditures to the year before or the year after and pulling revenue from the year before or the year after back in, they were able to get it down to $19 billion, but we saw the trickery of that. In 2014, there was a $48 billion deficit, and last financial year, 2014-15, there was $38 billion. This year we are projecting a $37 billion deficit, and the following year we are predicting $34 billion.

So, even if all these budget measures go through, in the next coming financial year, we will still be, as a nation, borrowing close to $100 million every day and we will have been doing that for almost the last 10 years. That means that every single day of the year governments have had to pay the expenses and accounts. They have had to borrow $100 million every single day, and that builds up a debt, a higher taxation obligation and a lesser ability to enjoy social services for our kids and our grandkids.

Already this year the interest payment on the debt we have is something like $14 billion. What that means is that we, as the government, have to collect $14 billion from the taxes of the hardworking people of Australia not to pay back the debt but just to service the interest alone. If you break that down, that works out at about $35 million every single day. My speaking time on this bill is 15 minutes, and in that 15 minutes this nation will have had to pay $300,000 in interest on that debt. This cannot continue, and thankfully there is a former Labor Prime Minister that I would hope all Labor members of parliament would listen to, one Paul Keating. I quote him from The Australiantoday:

The real point is the rest of the world has trimmed us down, commodity prices have fallen … and of course with (lower) wages growth, in the budget revenues are falling.

When commonwealth revenue has been so affected, the penny ought to drop that what we should be doing is cutting spending.

Sadly, on the other side of this chamber the penny has not dropped, because they are still out there telling the Australian public that governments can keep on spending, keep on borrowing and keep on putting more debt onto our children and our grandchildren, making a less prosperous lifestyle for Australians, because they simply want to be electorally popular. Sometimes in this parliament hard decisions need to be made. Those decisions may not be popular, but they must be made for the betterment of our country. Paul Keating continued, saying:

The Treasurer has got to sit and go through, line by line, every item of social expenditure—indeed every item of expenditure …

We owe it to our kids to do so. Keating goes on:

(Then ministers) Peter Walsh, John Dawkins and myself sat in those expenditure review committees 10 weeks a year, 10 hours a day.

In the end I was sitting up at the desk with a tennis shade on and sunglasses because I couldn’t stand the light from the paper, sitting there for so long.

That was the former Labor government. Labor Prime Ministers Paul Keating and Bob Hawke knew that they could not continue on spending the way they were, and even then they were still unable to bring the budget back into balance. And yet we have had speaker after speaker from the Labor side completely ignoring the facts of the budget problem we have—

The DEPUTY SPEAKER ( Hon. BC Scott ): Order! The debate is interrupted in accordance with standing order 43. The member will have leave to continue his remarks when the debate is resumed.

The DEPUTY SPEAKER ( Hon. BC Scott ) (16:18): Mr Speaker has received advice from the Chief Government Whip nominating changes to the membership of the Standing Committee on Infrastructure, Transport and Cities.

Dr HENDY (Eden-Monaro—Assistant Minister for Productivity) (16:18): by leave—I move:

That:

(1) Ms Marino be discharged from the Standing Committee on Infrastructure, Transport and Cities and that, in her place, Mr Hastie be appointed a member of the committee; and

(2) Ms Marino be appointed a supplementary member of the Standing Committee on Infrastructure, Transport and Cities for the purpose of the committee’s inquiry into the role of Smart ICT in the design and planning of infrastructure.

Question agreed to.

Mr CRAIG KELLY (Hughes) (16:19): Mr Deputy Speaker Scott, I am pleased to speak in continuation and I thank you for taking the chair. The key words in the title of this legislation are 'budget repair'. As I was saying before question time, we are in desperate need in this country to repair the budget. Since Labor took office back in 2007, we have seen this country continue to borrow $100 million, on average, every single day of the year. What that means is that we are borrowing to sustain government expenditure. We love to teach the concept of sustainability in schools, but borrowing $100 million per day is simply unsustainable. When I listen to contributions from the members of the Labor Party, I know they do not understand what this actually means and the damage that they are doing to this nation by continuing to block measures of budget repair.

What happens when the budget is in deficit is that we fund it by writing out an IOU. We simply sell government bonds, which is no different to writing on a piece of paper 'I owe you'. We sell those government bonds. That money then comes into the federal Treasury and that is what we use to pay our way. But those government bonds have an interest component that we must pay. This year it is close to $14 billion that we have to find from the taxpayers of this nation just to pay the interest. As I said before, that works out, in this 15-minute contribution, close to $300,000 that has to be taken from the hardworking Australians out there just to pay the interest on government debt. That goes on every 15 minutes of the day, every day of the week, every week of the month and every month of the year, until we start paying down that government debt. Yet we cannot even bring the budget back to surplus, even if, on the figures that I have quoted, we had some cooperation from the Labor Party and the Greens to get these modest cuts through and heading us back in a trajectory to get that budget back in balance.

The Treasurer, my good colleague, the member for Cook, noted during question time the comments of the former Treasurer, Paul Keating. It is very rare that I would come into this chamber and quote Keating, and say that the members of the opposition should listen to him, but I hope today they have. I quote him from this morning's radio on 2GB. He talked about how we cannot continue to borrow money we do not have. He said:

The Treasurer—

referring to the member for Cook—

has got to sit down and go through, line by line, every item of social expenditure—indeed every item of expenditure …

That is what we are doing in this bill.

Keating also said:

When Commonwealth revenue has been so affected, the penny ought to drop that what we should be doing is cutting spending.

I would hope that some time very soon the penny drops for those members of the opposition and they realise that they cannot come in here and whinge, whine and moan about this government trying to do the right thing for this nation by cutting expenditure. It is not an easy task to take something away. To cut expenditure is a hard job. It is unpopular but it is a job that must be done for the future of our nation. And it does this opposition no credit—in fact, it is disgraceful—that they come in and whinge, carp and whine about every cent of revenue that we try to save so that we can avoid borrowing that money from overseas.

That is what we are doing. Most of the money we are borrowing to finance our ongoing expenditure comes from sources overseas. Those who like to talk up the republic think Australia should have more control of its nation, yet at the same time they are getting us deeper into debt to foreigners. We cannot continue this way, and that is why the very modest measures in this bill should be supported.

My other close neighbour, the member for Fowler, talked about the Vietnamese community—a wonderful community that makes up part of my electorate, and how they would be unfairly affected by this. I would just like to go through what the provisions will be after this bill is in place. Pensions will still be portable. That means: if you qualify for the aged pension, you can travel offshore, go on holidays, visit relatives or go on a trip and your pension will go with you. You will be paid the full Australian pension for six weeks without any questions asked. After six weeks, there is a slight reduction, depending on how many years you have been a resident in Australia. So anyone that migrated from Vietnam in 1981 or before gets the full Australian pension, portable and paid into Vietnam for as long as they like.

To put that in some context: the current average monthly wage in Vietnam is US$145 in Hanoi and US$148 in Ho Chi Minh City. That is the equivalent of $100 per fortnight. Yet an Australian citizen that goes to live in Vietnam is entitled to get the Australian pension in full, which is $800 per fortnight. They are able to get eight times the average wage, all paid for by the Australian taxpayer. We talk about fairness and sustainability, and I would like this House to think about someone that is on $80,000. For every extra dollar they earn, they are taxed—now under the current provisions—close to 40c in the dollar. Yet someone in Singapore that earns the equivalent of $80,000 pays only 11.5c in tax for every extra dollar that they earn. So that 40c in tax simply becomes a disincentive for people to work.

The other thing we have seen this week here in parliament is how completely illiterate and dangerous the opposition would be, should they ever get back to the Treasury benches. We had the member for Watson claiming that the way he was going to fund all this great new expenditure from Labor was by taxing smokers. Now, I would like to see smoking rates come down and I would like to see no smoking in Australia. However, the member for Watson claimed that Labor's policies would raise $47 billion in taxes. There are only 2.5 million smokers in Australia, so if we assume that there are no further reductions whatsoever, that works out at $8,800 per smoker. That is what the Labor Party proposes. If you are a smoker, the Labor Party wants to increase the taxes you pay on your cigarettes by $8,800—and these people are the lowest-income earners in the country. Where are they going to get $8,800 from? This shows us a plain example of why those that sit on the other side are completely unfit to ever occupy the Treasury benches of this country.

Debate adjourned.