The PRESIDENT (09:31): I remind senators that the question may be put on that proposal at the request of any senator.

Senator RICE (Victoria) (09:31): by leave—I move:

That—

The Senate

(1) notes the claim of public interest immunity in response to the Senate Order to produce Religious Freedom Review Expert Panel;

(2) cites the Senate's Grounds for Public Interest Immunity Claims, where it states:

It is accepted that deliberations of the Executive Council and of the cabinet should be able to be conducted in secrecy so as to preserve the freedom of deliberation of those bodies. This ground, however, relates only to disclosure of deliberations. There has been a tendency for governments to claim that anything with a connection to cabinet is confidential.

(3) acknowledges the report does not relate to the deliberations of cabinet; and therefore

(4) insists the Order for the Production of Documents be complied with by 3pm 20 September 2018.

The PRESIDENT: Senator Rice, is that the actual motion?

Senator RICE: That's the motion.

The PRESIDENT: Could you please get us a copy so that the motion may be circulated?

Senator RICE: I think the motion is being circulated.

An honourable senator: We haven't got it yet.

The PRESIDENT: It hasn't come around yet. We'll follow it up. Continue, Senator Rice.

Senator RICE: The Senate yesterday passed an order for production of documents, for the final report of the Religious Freedom Review Expert Panel. This was rejected by the government late last night, on the grounds that the report informed and was the subject of cabinet deliberation, and therefore the public interest immunity claim was made. The reason for moving this motion today is that we reject that, for the reasons that I just outlined in the motion. The community needs to see this report. In fact, it is in the public interest for this report to be tabled. It is not in the public interest for this report to continue to be hidden. The government, by hiding this report, is putting people's lives—particularly the lives of lesbian, gay, bisexual, transgender and intersex people—on hold.

The government has had the final report of the Religious Freedom Review Expert Panel for four months now. We all know the circumstances in which the Ruddock review, the expert panel, was set up. It was as a consequence of the successful passing of the marriage equality legislation. The marriage equality legislation, as we know, removed the largest state-sanctioned discrimination against LGBTIQ people, in allowing us to get married. In response to that, there was some unhappiness on the government benches, particularly among those in the right wing on the government benches. There was a bit of a sense that we need to work out the whole issue of balancing the issue of religious freedom and religious discrimination. That's why the Ruddock review was set up. It is extremely important for LGBTIQ people, in particular, to know what that review has found, to know what Mr Ruddock is recommending to government and then to see what the government's response is, because this review and the government's response to it have potentially huge impacts on the lives of LGBTIQ people. At the moment, they are being kept in the dark. They are being left in the lurch. We do not know whether the Ruddock review is recommending further discrimination against LGBTIQ people, further discrimination that would allow schools, hospitals, aged-care centres, florists and bakers to further discriminate against LGBTIQ people.

The reason why it is now so important that the Australian people know this is the comments of Prime Minister Morrison in recent weeks, where he has indicated that he, in fact, wants to further discriminate against LGBTIQ people. He wants to wind back some of our antidiscrimination laws which protect LGBTIQ people from discrimination. It is extremely important that lesbian, gay, bisexual, transgender and intersex people know the extent of the recommendations from Philip Ruddock and to what extent the Prime Minister is planning to further discriminate against them. We know that this debate, about how religious freedom and religious discrimination weigh up against each other, is something that is of critical importance in our antidiscrimination laws going forward. In the Senate inquiry into marriage equality last year there was universal recognition that we need to protect religion as a protected attribute. Of course everybody should have the right to hold a religion and express their religion, but there is a great deal of debate about how the impacts of the manifestation of their religion upon other people should be managed.

The Greens position is that we need to have a charter of rights, so that we can balance people's right to have a religion versus people's right to not be discriminated against. That's the direction we need to be heading in. They're the discussions that the community needs to be having. If we had that charter of rights discussion we could be moving forward. We were hopeful that the Ruddock review might provide some information that would work out where the community debate should go, but in order to provide that information we need to see the report. We do not need to be kept in the dark. We need to let that report see the light of day. It is four months now that the government has had that report. Why isn't it releasing it now? We have been told for a number of months to expect it quite soon, but one has to ask: what is the government hiding?

There are questions around the fact that we have a by-election in Wentworth coming up in a month's time. The debate has been that the government's not going to release the Ruddock review before the Wentworth by-election. We know that the people of Wentworth are very strong supporters of LGBTIQ rights, so one could surmise that maybe the government are keeping this report in secret because they actually don't want the people of Wentworth to realise what their true agenda is. The true agenda is further discrimination against LGBTIQ people in the name of religious freedom. That's what you could actually surmise. That's the ulterior motive of keeping this report hidden. If they weren't planning on doing this then why not release the report? Why not release it so we can see what Mr Ruddock has recommended. And why not then respond to it and lay to rest all these people's concerns and fears?

I really want to go to the point of the importance of seeing the report of the Ruddock review, because there is a lot of fear in the community. LGBTIQ people across the community are worried. They are concerned. They know that achieving marriage equality was a big step forward, but they are very fearful that their rights are going to be wound back. It's not just a theoretical thing that they are worried about; it's people's actual lives—people employed as teachers in faith based schools, who are fearful of no longer having jobs; people employed in aged-care centres or hospitals, who are fearful of not even getting jobs because of their sexuality or gender identity or fearful that they will lose their jobs because of those things. Again, the Greens would like to see our laws strengthened so that people are better protected from discrimination, but we are worried, and the community is worried, that there are going to be further grounds to discriminate against people because of their sexuality or gender identity. You only have to look at the interventions of our Prime Minister over the last month to see that their fears seem to be very well grounded. When the Prime Minister sees fit to retweet an appallingly homophobic and transphobic article in The Daily Telegraph, saying that we don't need gender whisperers in our schools, one can see the sort of intolerance the government seems to be heading to. That's what people are fearful about. They are thinking: if a Prime Minister sees fit to retweet something like that, what has he got in mind? What is he planning to do? What legislation is this government planning to put up to further vilify and discriminate against people just on the basis of their sexuality and their gender identity?

The issue of protecting people's rights is of fundamental importance. All people, regardless of their gender identity, regardless of their sexuality, need to be treated as equals. They need to have all the opportunities other people in our society have. It's clearly going to be an ongoing debate in our community, but it needs to be a debate informed by evidence, rather than an emotive discussion based on prejudice. We need to have the basic information. The government, in initiating and setting up the review into religious freedom in the first place, had the opportunity, through doing the consultation the review has done, to put on the table a body of evidence with which we can move forward. That's the evidence we need to have. In particular, it's evidence that is needed before the people of Wentworth go to the polls in a month's time. They need to know what the Ruddock review recommended and what the government's plans are. So the motion I am moving today says: can we please move this forward? It asks all of our senators here to make sure the information is available so that we know where the power lies; so that we know what the government has planned; so that we know whether it's the fair treatment of LGBTIQ people that's on the government's agenda or whether the government's response to the question of religious freedom is one where the far right of the party have won the day and the government is planning further discrimination against lesbian, gay, bisexual, transgender, intersex and queer Australians.

Senator CORMANN (Western Australia—Minister for Finance and the Public Service, Vice-President of the Executive Council and Leader of the Government in the Senate) (09:43): The government will oppose this motion. That is because, as has long been recognised by the Senate and as has been practised by governments of both political persuasions, we believe that the principle of cabinet confidentiality, the confidentiality of cabinet deliberations, is a very important and long-established principle under the Westminster system. It is designed to ensure that cabinet ministers can debate policies and proposals freely so that the ultimate decision that is made is the best possible decision. I hasten to add here, in relation to the report of the Religious Freedom Review Expert Panel, which has been received by the cabinet, that the government has not as yet made any decisions on the way forward. The cabinet continues with its deliberations. This is obviously a matter which is highly sensitive. It's very important for the government, in its response, to get the balance right, to get its decisions right. I think it would make it inappropriately more difficult for the government to get the balance right and to make the best possible decision in relation to this issue if the longstanding principle of cabinet confidentiality was breached in the way as is suggested in this motion. That is why I call on the Senate—and I certainly would call most respectfully on the opposition, which has acted in consistency with the principles of cabinet confidentiality under the Westminster system during its periods in government, and is likely to do so in the future—to join with the government in preserving, whether on this topic or any other topic, a very important principle: to ensure that cabinet ministers, as they deal with often very complex, sensitive and difficult issues, are in the right position to debate policy proposals and other proposals freely and, indeed, in confidence, without essentially the additional difficulty in reaching the best possible decision that would come with a premature debate in the context of no decision yet having been made. Once the government has made a decision, all of the information, quite rightly, ought to be in the public domain, but this is not yet the time, given that the cabinet has not yet made a final decision and the deliberations are ongoing.

Senator JACINTA COLLINS (Victoria—Manager of Opposition Business in the Senate) (09:46): Labor, too, has concerns with the government's claim of public interest immunity on this occasion. As the minister has outlined, Labor as a party of government does regard seriously issues around cabinet confidentiality and cabinet deliberations. But there are a few issues on this occasion that I think I should highlight as to why our concerns remain on this particular matter. Firstly, in claiming public interest immunity, in response to the Senate's call of yesterday, the government hasn't outlined what harm it suggests may occur. That's a critical element of any claim of public interest immunity—to outline what harm is envisaged by this report being released. I would highlight to Minister Cormann that there are many occasions on which a government releases a report of a review before it concludes its response to that review. So we have yet to hear why, on this occasion, in relation to this review, the release of the review itself, as opposed to the cabinet's deliberation of the review, cannot be made available.

I would like to remind the Senate that there's some history to this matter. Some senators may recall that, in addressing the legislation around same-sex marriage and amendments that were put before the Senate by some senators on that occasion, I made the point that it would have been helpful to have been able to give more serious consideration to these religious freedom matters, but that the Prime Minister at the time, Prime Minister Turnbull, had, in a sense, kicked these matters down the road by establishing the Ruddock review. When that review was established, a number of senators who might've been inclined to support further work to occur in relation to introducing protections around religious freedom essentially folded into supporting the Ruddock review process as the appropriate forum under which these matters should be addressed. Remember, though, this is quite some time. The Greens have highlighted some of the concerns in relation to how we, as a nation, might proceed in the future to protect religious freedom, but there are, of course, a myriad of other concerns that the Ruddock review has considered.

Let me highlight for the Senate, for instance, that, at the commencement of the Ruddock review process, there were concerns from a number of parties that submissions were not being made public, that people weren't able to follow the proceedings, that some of the proceedings were unnecessarily secret and that the process itself had been somewhat clouded. I join with those who hold the view that the findings of that review have remained closed for too long now.

You might have some sympathy for concerns that say, 'Well, we've got a new Prime Minister and a new cabinet, and it needs to consider these things,' but it has been some time. I don't think this issue should be beholden to the uncertainties within the Liberal coalition government and its changes of leadership. I think these issues are more important than that, and we should have a broader, measured consideration of what was considered within the Ruddock review.

Unfortunately, I need to reflect on issues that have been raised in a sense anecdotally around the review, because we still can't see it. One element of those reflections has been that Mr Ruddock went into that review process with an approach that was essentially: 'Where's the nuisance? I don't see the nuisance here. So, not being able to see the nuisance, I don't really see that we need to do much more than the status quo.' I was subsequently told, 'Well, no, actually the review board did identify that there was some level of nuisance, not only the issues that have been highlighted by the Greens but also issues highlighted by members of various religious communities.'

On that note, I would like to say that I'm disappointed that this process appears to be becoming politicised. Prime Minister Morrison said he wasn't going to become the Christian warrior, but, by taking as long as he has and by shrouding this review still in secrecy, these issues are now becoming politicised in a quite unnecessary way. I would like to see an opportunity for all of those who have a multitude of different views to air those views, and the best way to do that is for the review report to now be made public so we can have what I would hope would be an open, measured discussion around what those recommendations are. For that reason, Labor will be supporting the motion.

Senator PATRICK (South Australia) (09:52): Orders for the production of documents are a key oversight tool for this Senate. We've seen a number of OPDs refused by this government on very dubious grounds. I accept the principles laid out by Senator Cormann that cabinet in confidence is a well-respected doctrine in the Westminster system of government. I don't challenge him on that.

However, let me just go to the claim that has been made by the government in this instance. They've made the claim that they can't provide the documents, on the grounds that these documents informed and are the subject of cabinet deliberations. Of course, cabinet deliberations are protected, but not necessarily things that are subject to deliberations—only the deliberations themselves. If this has not been through cabinet, it can't be a deliberation of cabinet, and it cannot attract that claim.

I will make another point, a very important point: we are a house that complies with the laws of this land. The laws of this land say that, in order for a document to be considered cabinet in confidence, it must have at birth a dominant purpose for submission to cabinet. I would like the government to come back to this chamber with some evidence that shows that, when they commissioned this report, it was intended exclusively for cabinet.

You would also note that, in accordance with the Cabinet Handbook, cabinet submissions take a particular form, and typically cabinet submissions are limited to 50 pages. I would like to get an answer from the government in respect of this: how many pages are in this particular report? You cannot simply pass a document through the cabinet room in order to obtain a protection of cabinet in confidence. That's inappropriate.

The other point I would make is that there are very strict handling requirements for documents that are cabinet in confidence. There are very strict tracking requirements for documents that are cabinet in confidence. I would like the government to bring to this chamber evidence that this document has been held confidential and has been tracked in accordance with the Cabinet Handbookso that we can be satisfied that the claim that is being made by the government is bona fide. We cannot simply have an aroma-of-cabinet defence fettering the Senate in its legitimate oversight role.

I note that this government has consistently made claims of public interest immunity in this chamber. It should be of great concern to every member of this Senate, because when there's a change of government the people sitting on the government side will end up on the opposition side of the chamber and will want to do their job properly, informed by the documents that are paid for by the taxpayer and are commissioned for public purpose. I respect what Senator Cormann has said. I respect the claim that is made, but it must be a proper claim. I suspect in this instance that it is not.

We have a situation at the moment where the government is in the ACT Magistrates Court claiming that the matters before that court are secret. We've had a number of instances in this chamber where the government have done the same thing, only to have their rulings overturned by people such as the Information Commissioner and the AAT. By making these false claims you undermine proper process—the very process Senator Cormann relies on not to bring these documents to the chamber. I ask for more information to be provided to the chamber. I'm inclined to support the Greens' motion.

The PRESIDENT: The question is that the motion moved by Senator Rice be agreed to.

Senator CAMERON (New South Wales) (10:04):    Labor supports the measures in the Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018, although we will move two small but important amendments.    The bill contains four tax measures.    Schedule 1 to this bill amends the Income Tax Assessment Act 1936 to ensure that the Multinational Anti-Avoidance Law applies appropriately to artificial or contrived arrangements involving trusts and partnerships entered into by multinational entities to avoid the taxation of business profits in Australia.

This measure applies on or after 1 January 2016 in connection with a scheme, whether or not the scheme was entered into, or was commenced to be carried out, before that day. However, the measure does not apply in relation to tax benefits that a taxpayer derives before 1 January 2016. This is consistent with the date from which the Multinational Anti-Avoidance Law applied, and the purpose of the law.

In order for this extension to apply, the trust or partnership must have: a relationship with a foreign entity that means they are not independent of that entity at the time they make the relevant supply or supplies to their Australian customer; and a foreign entity participant at any time in an income year in which income is derived from the supply.

As noted in the explanatory memorandum, the schedule implements a technical integrity measure underpinning the Multinational Anti-Avoidance Law.    At this point, I just want to remind the Senate that the government regularly makes misleading statements that Labor voted against the Multinational Anti-Avoidance Law. This is untrue. In the House, Labor voted against government-Greens political party amendments that watered down tax transparency reporting requirements for large private companies. Labor, throughout debate, supported the MAAL.

I should also note that the Senate has now passed Labor's private senator's bill regarding tax transparency. This will allow proper scrutiny and help restore the trust in the integrity of the tax system that was brought about when the Gillard government passed tax transparency reforms in June 2013. The Senate has voted to lower the tax transparency threshold to $50 million for all firms—public and private.

The bill also removes a grandfathering exemption for certain financial reports for approximately 1500 large companies. Labor supported this when former Senator Ricky Muir moved it during the Multinational Anti-Avoidance Law debate in 2015, where it was opposed by the Liberals and the Greens. That private senator's bill stands alongside other Labor transparency measures, including disclosure of tax haven activity in government tenders, public reporting of country-by-country reports and protection for whistleblowers who uncover tax dodging by multinationals.

Schedule 2 to the bill amends the Income Tax Assessment Act 1997 to include additional conditions that must be satisfied to apply the small business CGT concessions to capital gains. The new conditions ensure that the small business CGT concessions in division 152 are only available for capital gains tax assets that are either used or held ready for use in the course of a small business or are an interest in a small business. These amendments implement the measure announced in the 2017-18 budget as 'Tax integrity package—improving the small business capital gains tax concessions' and apply to capital gains tax events that occur on or after 1 July 2017. That announcement followed issues raised with Treasury by the Australia Taxation Office that legislative loopholes were being exploited. The budget proposal was vague in its details. Numerous tax professionals and stakeholders have said it was not until the release of the exposure draft legislation that those affected would become aware of how they were affected. Stakeholders make the reasonable claim that, due to a lack of detail, taxpayers have conducted their tax affairs in good faith and will be caught by changes that go beyond what was flagged in the budget. In light of the stakeholder concerns, Labor is moving a detailed amendment to make the start date 8 February 2018, the date on which the exposure draft legislation was released, as proposed by the tax professional community. I will detail our amendment later in my remarks.

Schedule 3 of the bill amends the income tax law and the Venture Capital Act 2002 to ensure that the venture capital tax concessions are available for investments in fin-tech businesses. These amendments apply in relation to investments made on or after 1 July 2018. This schedule partially implements the National Innovation and Science Agenda measure, expanding the new arrangements for venture capital limited partnerships from the 2016-17 budget. In the light of feedback received in the course of our consultations, Labor will be moving an amendment to this schedule of the bill. This amendment will require the minister to instigate an impact assessment of the venture capital tax concession provisions overhaul, and include the measures in schedule 3 to this bill to ensure that they are operating as intended.

Schedule 4 to this bill amends the Income Tax Assessment Act 1997 to exempt from income tax the payments received from the Commonwealth as reparation for abuse by Australian Defence Force personnel. This measure applies to the 2017-18 income year and later income years, and implements the tax consequences from the 2017-18 budget of the Defence Force Ombudsman continuation and expansion measure. The Defence Abuse Response Taskforce was established on 10 April 2011 to assess and respond to individual cases of sexual and other abuse in the Australian Defence Force. The Defence Abuse Response Taskforce administered reparation payments through the Defence Reparation Scheme of up to $50,000 to complainants who likely suffered abuse in the Australian Defence Force. Reparation payments were not paid as compensation for loss or damage for any asserted, perceived or possible legal liability on behalf of the Commonwealth or for any injury, disease or impairment. The payments did not affect complainants' statutory common law or other legal rights. This measure amends the tax law to exempt from income tax the payments made in accordance with a recommendation of the Defence Force Ombudsman in relation to abuse by Australian Defence Force personnel. Labor supports this measure in schedule 4.

I now turn to the two amendments that Labor will move to this bill in relation to schedule 2 and schedule 3. Labor will move an amendment relating to the small-business capital gains tax concession measures in schedule 2. Stakeholders have informed Labor that the additional conditions for eligibility for the capital gains tax concessions are detailed in a way that make the changes more akin to a policy change rather than an integrity change, and, as such, capture taxpayers who engaged in good faith according to the intent of the concessions. Further, the active asset tests for eligibility interact with a longer run issue of tax office interpretation and application of the active test. This issue flared up when the ATO appeared to change its interpretation of 'act of business/asset' in a footnote to the draft taxation ruling TR2017/D2—a matter that has not been resolved. Chartered Accountants of Australia and New Zealand noted in language comparable to other stakeholders:

The proposed measure would deny "access to the concessions for assets which are unrelated to [a taxpayer's] small business, for instance through arranging their affairs so that their ownership interests in larger businesses do not count towards the tests for determining eligibility for the concessions". No further information was released until the publication of this exposure draft.

The measures contained in the exposure draft are extraordinarily complex. More importantly, in our view they go beyond what taxpayers could reasonably have expected from the Budget announcement designed to address "integrity" concerns. They reduce what many stakeholders would regard as the intended scope of the concessions.

… … …

… taxpayers have in good faith sold, or entered into agreements to sell, interests in entities on the basis that they qualified for the concessions but will not now do so.

The Tax Institute, Chartered Accountants of Australia and New Zealand, partners at large accounting firms and small businesses have all argued that, to prevent adverse consequences for taxpayers who have acted in good faith but could not reasonably have been expected to foresee the detailed amendments that were finally unveiled in the exposure draft, the implementation date should be changed from 1 July 2017, as per the budget announcement, to 8 February 2018, the date of the exposure draft release.

In light of the stakeholders' concerns, Labor is moving a detailed amendment to make the start date 8 February 2018. We flagged the need for this change when the bill was debated in the House. Labor will also move an amendment in relation to schedule 3. This amendment requires the minister to instigate an impact assessment of the venture capital tax concession provisions overall and to include the measures in this bill to ensure they are operating as intended. This impact assessment would be conducted by Treasury and Innovation and Science Australia.

For the benefit of the Senate, I want to note some comments by the member for Chifley in the other place when debate was underway on this bill. The member for Chifley said:

The sector and people in the sector have raised with me that they're not entirely happy with what's been put forward in this bill. Again, it's a straightforward measure, but they still don't think that it's picked up their concerns. For example—and I had highlighted to me—in 3.26 of the explanatory memorandum it states that a fin-tech may be eligible for the tax concession when developing its technology. However—and this is what has been raised with me—it then goes on to say that when a business is commercialising the technology it would no longer be eligible. As has been raised with me: 'This hardly seems like a certain, longer term platform for a venture capital firm to make an investment in a fin-tech, given that the VC is only making the investment because it's hoping the fin-tech will be able to commercialise and profit from the technology.' This is what they're raising with me, and I'm sure they have raised it with Treasury.

The member for Chifley raised important concerns about the government's processes. This reflects why we believe it is important to have a review. We also note concerns about the government's process. The member for Chifley noted in the other place:

… what I have been finding out when talking with stakeholders about this is how long it took to get to this point—how long it took for this straightforward move to happen.

I note that FinTech Australia put out a policy paper on this issue on in February 2016. The government announced this in their 2016-17 budget, but it was not until October 2017 that the government started to consult on amendments. It is concerning that this whole process has taken so long.

Labor's position strikes the right balance: we support this particular measure, but we will also be moving an amendment requiring the government to have a comprehensive and transparent review of the venture capital tax concession framework. In conclusion, Labor supports the measures in the Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018. However, we will be moving sensible amendments to the bill, which we commend to the Senate.

Senator BROCKMAN (Western Australia) (10:20): I rise to speak on the Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018. I thank Senator Cameron for his contribution and the fact that those opposite will be supporting this bill, albeit they will be moving some amendments to it.

Why is tax integrity important? Tax integrity is vital because it gives people confidence in our economic system and it means that taxes can be maintained at as low a level as possible. If everyone is paying the amount of tax they are required to pay then taxpayers are not burdened. Those who do pay their tax, who follow the rules, are not burdened with unduly high taxes. So tax integrity is an essential measure of fairness in a modern economy.

This government has a strong track record of defending the integrity of the tax system, to make sure it collects the tax that is required to be paid—and no more than that—so that no-one in society is burdened with an unfair level of taxation because others are breaking the rules. The government has a strong track record of defending the integrity of the tax system not just in this bill but previously, and before I go into this bill in detail I'll just run through some of the things that this government has done.

Legislation passed includes such things as the Banking Executive Accountability Regime, the BEAR, ensuring that senior executives are accountable for the decisions they make. That was a very significant reform in Australia's financial services history. It imposed a higher standard of behaviour on banks and their senior executives and directors. It strengthened the leadership of financial system regulators through enabling ASIC and APRA each to have a second deputy chair position. That is the case at APRA, where John Lonsdale, a 30-year Treasury veteran, has been appointed. And Daniel Crennan QC has already started in his role at ASIC as a special prosecutor focusing on enforcement.

We have created a one-stop shop for dispute resolution with the establishment of the Australian Financial Complaints Authority, enabling more consumers to access fast and free dispute resolution. We have increased the powers of APRA in relation to crisis management and non-bank lenders to ensure the resilience and ongoing stability of the Australian financial system. We have capped commissions paid on life insurance products to prevent unnecessary churn. We have raised the professional education and ethical standards of financial advisers. We have put a ban on excessive credit card surcharges, to protect consumers from being granted excessive credit limits and building unsustainable debt across credit cards, and simplified how interest is calculated. We have implemented funds for Australian regional transport. We have moved to establish a crowdsourced equity funding regime to allow new businesses to get access to funding in new and innovative ways. We have introduced industry funding for ASIC through levies and fees for regulatory activities. We are also looking to strengthen protection for whistleblowers who expose corporate and tax misconduct. We have enhanced ASIC's ability to attract and retain the best staff by removing ASIC employees from the Public Service Act.

There is also the relaxation of the legislative 15 per cent ownership cap as well as establishing a streamlined approval path for recent entrants so as to reduce barriers to innovative new fin-techs in the banking sector. There is extending the crowdsourced equity funding regime to propriety companies to help smaller financial institutions to grow and become more significant players in the banking sector. We're improving superannuation accountability and member outcomes, including strengthening regulator powers, improving disclosure, removing restrictions on choice of funds and lifting governance standards.

We're also moving to protect individual superannuation savings from disproportionately high fees and insurance premiums and empowering the ATO to reunite people with their lost and inactive super. This is a strong track record of delivering positive outcomes in the financial services space particularly and, obviously, in tax integrity. Making sure that all parts of the economy pay the correct amount of tax through tax integrity measures is vitally important. We've already taken significant action on this, particularly as regards multinationals, and that is, in part, what the bill in front of us goes to.

Schedule 1 of this bill toughens the multinational anti-avoidance law—the MAAL law. This schedule makes technical amendments to ensure that the multinational anti-avoidance law operates as it was intended to. As a result of this amendment, multinationals will no longer be able to use corporate structures with foreign trusts and partnerships to avoid the application of the multinational anti-avoidance law. These changes were announced in last year's budget. The government is committed to ensuring that multinational entities pay their fair share of tax. The OECD estimated that, globally, between $100 billion and $240 billion of corporate tax revenues is lost annually due to base erosion and profit-shifting strategies used by multinationals. As part of the global effort to combat multinational tax avoidance, the OECD/G20 Base Erosion and Profit Shifting Project has delivered a number of recommendations to strengthen tax integrity rules and ensure that the international tax system works as intended.

Since 2015, Australia has implemented a range of such actions. The government has also taken action on multinational tax avoidance beyond the OECD recommendations, including implementing the multinational anti-avoidance law and the diverted profits tax, both of which discourage large multinationals from artificially diverting profits offshore. The multinational anti-avoidance law took effect from 1 January 2016 and prevents multinationals from escaping Australian tax by using artificial or contrived arrangements to avoid having a taxable presence in Australia. The ATO has observed a significant change in how multinational companies are approaching their Australian tax obligations as a result of the tough new anti-avoidance laws put in place by this government. The ATO estimates more than $7 billion in sales revenue annually is already being added to the Australian tax base as a result of these changes. Thirty-eight multinational entities have changed, or are in the process of changing, their tax affairs to bring their Australian source sales back onshore in compliance with the multinational anti-avoidance law, including Google and Facebook. Obviously, taxing these large multinationals with innovative models of doing business—the way they're structured and the way their businesses operate—is different to what the tax system was used to dealing with. So it's important that, as the business environment changes, governments are responsive enough to change the tax environment with it to ensure that everyone does pay their fair share of tax.

Schedule 2 improves the integrity of the small-business capital gains tax concessions. In the 2017-18 budget the government announced that it would improve integrity and ensure that the small-business capital gains tax concessions are appropriately targeted. The goal was to ensure that the concessions continue to benefit those who need them most—hardworking small businesses. The proposed amendments will mean the small-business capital gains tax concessions can only be accessed in relation to assets used in a small business or ownership interests in a small business.

The government is committed to supporting small businesses through tax cuts and initiatives such as the $20,000 instant asset write-off, which was extended in last year's budget for a further 12 months to 30 June 2018. The small-business capital gains tax concessions assist owners of small businesses by providing relief from capital gains tax on the disposal of assets related to their business. This helps them to reinvest and grow as well as to contribute to their retirement savings through the sale of the business. The concessions themselves are not changing and will be available to genuine small-business taxpayers with an aggregated turnover of less than $2 million or business assets less than $6 million.

Key features of the new law include: a limitation on the size of the company or trust being disposed of, to ensure that it is a genuine small business; clarifying that a taxpayer is required to be a small business entity at the time they dispose of their interests in the company or trust, to ensure that taxpayers do not benefit from the concession where the relevant business activities are too remote; and modifying the active asset test so that it looks through shares to companies or interests in trusts to the activities and assets of the underlying entities. That prevents the concessions from being available when most of the value of the company or trust is unrelated to small-business activity. Additional integrity rules also apply to ensure that the new tests cannot be manipulated or avoided.

Schedule 3 of the bill covers amendments to the fin-tech and venture capital arrangements. This delivers on a key commitment in the government's fin-tech statement, removing ambiguity from the tax law and clarifying that early stage venture capital limited partnerships can invest in Australian fin-tech businesses. This bill builds on the government's $1.1 billion National Innovation and Science Agenda and highlights our commitment to support innovative businesses in Australia and build a culture of entrepreneurship and risk-taking. It will improve access to venture capital for fin-tech start-ups and assist these businesses to grow and succeed. I certainly know that in my home state of WA we are seeing a lot of very exciting developments in these kinds of spaces where venture capital and financial tech firms are seeking to access and innovate based on new technologies—things like blockchain, which many of us have heard about and probably not very many of us understand. Giving these businesses the opportunity to invest, take a risk and build a business that hasn't existed in the past are things this government very much supports.

Schedule 4 covers the tax exemption for payments under the Defence Force Ombudsman scheme. This commends the Income Tax Assessment Act 1997 to continue to exempt from income tax payments made as reparations to victims of abuse in the Australian Defence Force. Unlike compensation, a reparation payment represents an acknowledgement by Defence that the abuse suffered by the complainants was wrong, that it can have a lasting a serious impact and that, in the past, Defence was not positioned appropriately to respond to that abuse in many cases. The recipient of a reparation payment should receive the full benefit of that payment and, as such, the payment should be exempt from income tax. Previous reparations made under the former Defence Abuse Response Taskforce were tax exempt. The task force concluded on 31 August 2016 and, in the 2017-18 budget, the government announced it was expanding the Defence Force Ombudsman role to make recommendations on reparation payments in relation to complaints of abuse in Defence. The Defence Force Ombudsman may make recommendations on historical cases of abuse occurring on or before 30 June 2014.

Obviously, just as we want those who should pay their correct amount of tax to do so, we don't want people who are receiving a payment from the government to have to pay tax where it is inappropriate for tax to be paid. A reparation payment of this sort to victims of abuse in the Australian Defence Force falls into that category. We want to collect tax from those who should pay it and we don't want to be taxing those who shouldn't. In that way, we'll be able to keep our tax system as fair as we can and only claim the minimal amount of tax we need to deliver those essential services that Australians want and need and not a penny more.

The government has also announced a number of other significant reforms in this area. Again, we see that this is a government getting on with the job of delivering for all Australians. It announced reforms including increasing the civil and criminal penalties for financial misconduct—the most significant increases for the maximum civil penalties in many cases in more than 20 years. These include criminal penalties for individuals of up to 10 years imprisonment and, for corporations, criminal penalties the larger of $9.45 million, three times the benefit or 10 per cent of annual turnover. So there are significant increases in the potential penalties that will be faced both by individuals and corporations. Other reforms announced include imposing design and distribution obligations to ensure products sold by financial institutions are designed for and marketed to an identified target market to minimise the likelihood of consumers purchasing unsuitable products. Also announced was a product intervention power for ASIC to enable the regulator to intervene where products could pose significant consumer harm. Obviously, we want a system where people understand what they are purchasing and purchase things that are appropriate for their financial circumstances. The more information we have in the marketplace about these products, the more informed decisions consumers can make.

We've announced a move to extend unfair contract term protections to insurance contracts. We've also announced further reforms to combat illegal phoenixing activity. Phoenixing is the activity where a business closes down and restarts pretty much on the same day and in the same premises. We've also allowed the early release of superannuation rules on compassionate grounds and financial hardship grounds. The government has also recently increased ASIC's funding by $70 million to equip it with the resources and powers it needs. We need to detect, deter and punish those who do the wrong thing. We need to ensure that all companies pay the correct amount of tax under the law. In that way, we can keep taxes as low as possible for everybody.

Senator STORER (South Australia) (10:36): The Australian economy needs entrepreneurs. The parliament should foster an entrepreneurial spirit and give a fair go to those who are weighing up the risks of starting a business. Entrepreneurs are prepared to take risks to be successful and drive the economy. Entrepreneurs and small businesses should be supported and given confidence to invest and grow—for example, in collaborative structures with other businesses. We should not punish those entrepreneurs who worked hard in small businesses and made substantial contributions to Australia's economy in the process. It is unfortunate that that will be a consequence of this bill as currently drafted. I will return to that in a moment.

The new rules would act as a disincentive to growth, hurting thousands of small businesses—the very people our Prime Minister says are the engine of economic growth and jobs. Whilst I agree with the intention of the bill—that big businesses and wealthy individuals should not be able to access tax concessions designed to help small businesses grow—the bill also unintentionally smuggles in policy by stealth. It's actually misleading to suggest that these changes are merely an integrity measure. No-one wants to see loopholes in the law erode the tax base, but this legislation does appear to have adverse consequences for some small-business people who deserve support to grow and be successful.

The fact is that there are genuine small-business people who will no longer be able to claim appropriate tax relief as a result of this bill. I've had numerous consultations with business groups, in particular with Business SA, on this issue. They have cited that many of their members now face capital gains tax of hundreds of thousands of dollars each when they sell their share in their businesses, which can often be their entire retirement nest egg. The amendment I will seek to have passed will remedy that concern by making the new restrictions only apply to taxpayers who have significant other wealth, not to genuine small-business people who have worked hard to grow a business and employ Australians along the way.

At the same time as we debate these issues, a review is taking place by the Board of Taxation that will provide recommendations into precisely the issues being put forward in the bill. That review will:

… identify ways to improve small business tax concessions to ensure they remain effective, easily accessible, and well-targeted. … including how the small business tax concessions complement retirement savings policy.

It makes no sense to me that we would rush this bill through the Senate before that analysis is made available next month. The Senate could make an informed decision.

The Prime Minister has declared, as the benchmark for his administration, that he will give 'a fair go to those prepared to have a go'. According to Business SA, there are thousands of people in South Australia alone who have demonstrably had a go, who are inadvertently affected by this bill as it currently stands. Through their enterprises they have built businesses, employed South Australians and contributed to the prosperity of the state. What they now face, should this legislation be passed as currently drafted, is anything but a fair go. I urge the Senate to support the amendment I will be proposing or, at the very least, to delay passage of the bill until proper consideration can be made and consultations with stakeholders are held, in particular in reference to the Board of Taxation recommendations, to ensure that people who have made a lifetime contribution to the economy do not suffer the unintended consequences of this legislation.

Senator STOKER (Queensland) (10:40): I rise to speak in support of the Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018. We on this side of the chamber believe in lower taxes and in entrepreneurship. We believe in the hard work and aspiration of everyday Australians who want to get ahead. We know that lower taxes and more entrepreneurship are good for the economy, good for jobs and good for innovation. That's why this government has committed to and has delivered tax relief for small and medium-sized businesses, as well as for working families, through reductions in company and personal income tax.

This agenda of lowering taxes is working. Australia's unemployment rate is at 5.3 per cent, the lowest level since the peak of the mining boom. Well over one million jobs have been created since the coalition government was elected five years ago, and we have the strongest economic growth in the OECD. But, while we firmly believe that taxes should be low, we also believe that taxes must be paid. That's why this government has legislated a range of measures to combat multinational tax avoidance. They include a diverted profits tax; the establishment of a tax avoidance task force; strengthened international transfer pricing rules; increased penalties for multinationals who engage in profit shifting; and new whistleblower protections. The Australian Taxation Office expects that an additional $7 billion in sales revenue each year will be returned to the Australian tax base because of these reforms. The actions already taken by the government show its firm belief that while taxes should be low, they must also be paid.

This bill continues to deliver on the goal by further cracking down on multinational tax avoidance while, at the same time, providing tax relief for both innovative venture capital investors and Australian Defence Force personnel who receive reparations. For instance, schedule 4 amends the Income Tax Assessment Act to exempt payments made as reparation to victims of abuse in the Australian Defence Force. This will ensure that payments that are made as reparations to these victims will be exempt from income tax. The government previously made similar payments to victims of abuse in the ADF through the Defence Abuse Response Taskforce. The task force administered reparation payments of up to $50,000 to complainants who likely suffered sexual or other abuse by a member of Defence. These payments were specifically exempted from income tax because there was a possibility that the payments could be seen as arising from employment with Defence and understood, were it not for this legislation, to be income in the hands of the recipient.

The task force concluded on 31 August 2016. However, this bill will ensure that the important work it carried out is continued by expanding the role of the Defence Force Ombudsman to include the ability to make recommendations for reparation payments, which the government has already provided some $19.5 million to deal with. From now on, these reparation payments will be made on the recommendation of the Defence Force Ombudsman and will be exempt from income tax. This is because the government believes that the recipient of a payment of this kind should receive the full benefit of it, particularly the men and women who so honourably serve and protect our country in our Australian defence forces.

Furthermore, the government is committed to encouraging innovation and entrepreneurship through the Australian economy. Key to this is fostering competition. We know that greater competition leads to greater innovation, and that's what grows economies and creates jobs and wealth for their citizens.

While Australia has a sophisticated financial sector underpinned by a strong regulatory system, our financial services are at risk of becoming uncompetitive if they fail to keep pace with technological disruption and the global change in this field. That's why the government has already introduced new tax incentives for early-stage venture capital investors in relation to investments in financial technology, as a part of the $1.1 billion National Innovation and Science Agenda. This is an important step in ensuring the competitiveness of the fintech sector, as venture capital is a vital mechanism for financing new innovative enterprises at the start-up and early expansion stages of their commercialisation. Venture capitalists invest funds in such enterprises in return for an equity share or the equivalent of partial ownership. The funds provided to the enterprise are used to develop their ideas in the early stages of development and ensure early-stage commercial viability. These tax concessions support high-risk fintech businesses at the start-up and early expansion stages where it would otherwise be difficult to attract investment using normal commercial means.

The fintech sector is a largely new industry composed of companies that use technology to make financial services more efficient. These innovators are harnessing technology to deliver services in more relevant and convenient ways to Australian businesses and consumers. In a recent study, Fintech in Australia—trends, forecasts and analysis 2015–2020, research firm Frost & Sullivan says the Australian fintech sector is poised to contribute $3 billion of new revenue to the Australian financial services sector by 2020, while it is also estimated that fintech investment reached US$20 billion in 2015. It's clear that developing our fintech industry here will not only drive expansion and growth in our financial exports but will also deliver benefits to Australians through new services that will create value or bring efficiencies and convenience to the market. Indeed, with our financial services sector being the largest contributor to the financial economy, advancements in research and development represent a crucial opportunity for innovation in a key services sector of our growing economy.

However, current uncertainties about tax concessions have restricted the access of the fintech sector to venture capital investment, which could potentially create stagnation if it's not dealt with in this vital sector of the economy. So schedule 3 of this bill amends the Income Tax Assessment Act to ensure that the venture capital tax concessions are available for investments in fintech businesses. This clarification means that early-stage venture capital partnerships can receive tax concessions when they invest in new fintech businesses that are developing new technology, including using technology that might already exist but in a new and novel way. The removal of ambiguity from the tax law will help to foster a culture of entrepreneurship and encourage the necessary early-stage risk-taking while improving access to capital for Australian business to ensure that they grow and succeed. Innovation and Science Australia will be enabled to make public and private findings on the eligibility of investments, while banks that split their obligations in order to receive the benefits of the tax concessions, should they choose to take that path, will be excluded under anti-avoidance rules.

While Labor is promising a $200 billion tax increase across the Australian economy, the government is creating an environment to make Australia's fintech sector more internationally competitive through lower taxes. While we want lower taxes, as I said before, we're also serious about compliance. If taxes are due, they have to be paid, and that's why we're committed to ensuring that multinational entities pay their fair share of tax. The OECD has estimated that, globally, between US$100 billion and US$240 billion of corporate tax revenue is lost annually due to base erosion and profit-shifting strategies.

Some multinationals artificially structure their company to avoid Australian tax by booking revenue from Australian sales offshore. When that happens, they have an unfair advantage as against local businesses, families and small businesses, who have no choice about where they pay their tax and are inevitably left to shoulder more of the tax burden when those who are multinationals don't bear their share. Our already implemented multinational anti-avoidance laws allow the Commissioner of Taxation to treat the multinationals as though they have a taxable presence in Australia and were subject to Australian tax on their Australian income. As a result, 38 multinational corporations have changed or are in the process of changing their tax affairs to bring their Australian-sourced sales back onshore, including businesses like Google and Facebook.

However, the Australian Taxation Office has identified that certain partnership arrangements have been designed to avoid these laws. The bill will ensure that the original laws operate as intended. For example, schedule 1 of the bill toughens our multinational anti-avoidance laws by ensuring corporate structures involving foreign trusts and partnerships are subject to the law. This measure involves a technical amendment to prevent large multinationals from avoiding the application of the anti-avoidance laws by interposing partnerships that have foreign resident partners, trusts that have foreign resident trustees or beneficiaries, or foreign trusts that temporarily have their central management and control in Australia. This will continue to ensure fairness in this sector. Importantly, this measure will not negatively impact on investment by multinationals in Australia, as the measure is targeted towards those that attempt to avoid being subject to anti-avoidance laws by manipulating a certain target structure.

Furthermore, the government believe in and are committed to supporting small and family business. That's why we have consistently delivered support to small businesses through the life of this government. Whether that's initiatives such as the $20,000 instant asset write-off or company tax reductions for small and medium-sized businesses—which I believe the Labor Party have a policy to take away if they're successful at the next election—this government stands side by side with small businesses every day of the week. I'm glad to see that Prime Minister Scott Morrison has dedicated a minister for small and family business to his cabinet table.

Small businesses can also attract capital gains tax concessions to assist owners by providing relief from capital gains tax when they dispose of assets related to their business. This helps them to reinvest, to grow, to employ more Australians and to contribute to their own retirement savings. However, it is important to the integrity of our tax system that these capital gains tax concessions are appropriately targeted. We want to ensure that the concessions continue to benefit those who need them most—hardworking small and family businesses.

Unfortunately some taxpayers are currently able to access the small business capital gains concessions for assets that are unrelated to their small business. For example, it's possible to arrange one's affairs so that ownership interests in larger businesses don't count towards the tests for determining eligibility for the concession. So schedule 2 of the bill tries to deal with that, improving the integrity of these concessions. The concessions themselves aren't changing, and they'll continue to be available to genuine small business taxpayers. The proposed amendments will mean the small business capital gains tax concessions can only be accessed in relation to assets that are used in a small business or for ownership interests in a small business.

Key features of this new law will include a limitation on the size of the company or trust being disposed of to ensure that it is genuinely a small business in the Australian market, and clarifying that a taxpayer is required to be a small business entity at the time they dispose of their interest in the company or trust. This ensures taxpayers don't benefit from the concession where the relevant business activities are too remote. It will involve modifying the active asset test so that it looks through shares in companies or interests in trusts to the activities and assets of the underlying entities. This prevents concessions from being available where most of the value of the company or trust is in fact unrelated to small business activities.

This bill is just another example of how the Liberal-National government is taking action in a space where Labor failed to do so. While those on the other side love to talk about multinational corporations and tax integrity, it's been the Liberal-National government who has taken action to tackle multinational tax avoidance every day of the week. In doing so, it enables us to lower taxes for all Australians. I support this bill because it will ensure a more effective and targeted tax system while continuing our agenda of providing tax relief, equipping us to reduce more taxes for more Australians.

Senator HUME (Victoria—Deputy Government Whip in the Senate) (10:55): I rise today to speak on the Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018. It is, indeed, an honour and a privilege to be able to speak on yet another treasury laws amendment bill that has been introduced in this place, for this is an area in which the Morrison coalition government and both the Turnbull and Abbott governments before have given considerable thought and have taken action that has actually made a considerable difference to the budget bottom line.

Before I begin my remarks, I'd like to acknowledge the good work of the Commissioner of Taxation, Chris Jordan, who has, within nearly five years in the role, made a significant impact on the ATO, on its operations, on its personnel and also, particularly, on its approach to collecting tax revenue on behalf of the government. You would know, Acting Deputy President Marshall, that the Liberal-National coalition will always be a government of lower taxes. The Liberal Party in particular prides themselves on being a party that values lower taxes and that wants to keep more of what you earn in your pockets. But, at the same time, we are committed to ensuring that those who do earn income in Australia pay their fair share of tax in Australia.

Commissioner Chris Jordan is equally committed to that cause. He is certainly a man that does not take tax avoidance or tax evasion lightly. In fact, at the last Senate estimates he revealed that, particularly in the area of multinational tax avoidance, the new measures that this government have taken, whether it be through the diverted profits tax or the multinational anti-avoidance legislation, have already netted around $5 billion in additional revenue to the ATO and therefore to the budget bottom line. In fact, the ATO said that about 70 companies were being looked at very closely under that multinational anti-avoidance legislation because they were deemed to have a medium to high risk of avoiding a taxable presence in Australia and that 25 companies—I think this was nearly a year ago—had already started to restructure to fall in line with the multinational anti-avoidance legislation. That was because of the tough stance that Commissioner Jordan and the ATO had taken, backed by the federal government's multinational anti-avoidance law.

Microsoft, for example, had previously booked revenue for many of its sales in Australia in low-tax Singapore. But about 12 or so months ago it reached a settlement with the ATO under which it would book a much higher proportion of sales and therefore tax in Australia. Mr Jordan had said that this crackdown on foreign multinationals had very quickly achieved the desired results. As I said, in the 16 months until the end of October—and that was last year—it had flushed out retrospective tax liabilities of more than $5 billion from a swag of global giants operating in Australia. Nearly $1 billion of that was raised in four months alone. Of course, this came ahead of the imminent launches of companies like the retail giant Amazon in Australia, which would have walked into the Australian market with a completely different understanding of its obligations to pay tax in this country than if it had come into the market only 12 or 18 months beforehand. Google is another one of the companies that is targeted. In fact, the Multinational Anti-Avoidance Law and the diverted profits tax were dubbed the 'Google tax'. Facebook, of course, is the other one. It was particularly targeting those very large and quite opaque international companies. In fact, Mr Jordan said that they had an 'intellectual might' associated with them. And prior to this particular piece of legislation, those companies had attempted to intimidate the ATO to some extent to give them lower tax assessments. Mr Jordan noted that some of those multinationals attempted to bamboozle him and bamboozle ATO officials with financial fairytales and they tried to intellectually browbeat the ATO with great big piles of reports and spaghetti diagrams on white boards saying things like, 'Look, we have the greatest experts in the world.'

Senator Cameron: Not the dreaded whiteboard!

Senator HUME: Yes, the dreaded whiteboards, Senator Cameron. The world's greatest experts would say, 'This particular tax structure works. Who are you at the ATO to challenge us?' So Mr Jordan, applying these new multinational anti-avoidance laws and also the diverted profits tax, made sure his officials weren't boxed into a corner by the technical analysis and the intellectual might and legal and financial power of these very large companies. He has done so particularly successfully because he is as committed as the coalition to these companies paying the right amount of tax on profits that are earned in Australia.

Schedule 1 of this particular legislation toughens those Multinational Anti-Avoidance Law that has been so successful over the term of this government. The first schedule of the bill amends the Income Tax Assessment Act to improve the integrity of the Multinational Anti-Avoidance Law, the MAAL. Currently large multinationals can avoid the operation of that Multinational Anti-Avoidance Law by putting certain kinds of partnerships and trusts between the global entity and the consumer. The kinds of partnerships that are used are those that have foreign resident partners or foreign resident trustees or beneficiaries or are foreign resident trusts that can temporarily have central management and control in Australia. You can see how complicated those sorts of spaghetti diagrams on a whiteboard would be, which is why it's so important to dethatch the complexities of the tax arrangements of these companies. The use of these sorts of structures contravenes the original policy intent of the Multinational Anti-Avoidance Law, so this particular bill that we have before us in the chamber today ensures that the Multinational Anti-Avoidance Law acts as it was originally intended.

You may recall that the original anti-avoidance laws were enacted in December 2017 to prevent those very large multinationals from avoiding the tax on their Australian business profits by artificially structuring their affairs in a way that results in them not having to have that taxable presence in Australia. As I said earlier, since that legislation was enacted on January 12016, it has been highly effective and highly beneficial. It has achieved a significant intake of tax to the ATO and therefore to the budget bottom line.

On 15 December 2016, the ATO published its concerns with certain restructures involving those foreign partnerships undertaken in response to the implementation of the multinational anti-avoidance legislation, so this was like a post-implementation review. It was entirely appropriate that the ATO, which implements this particular piece of legislation, should review its efficacy. And while the ATO said it is highly effective and will achieve its objectives, it does have some tweaking where there potentially are loopholes remaining.

This particular bill affects the large multinationals that fall within the scope of the multinational anti-avoidance legislation. In general those entities have a global income of more than $1 billion, so we're certainly not dealing with the small end of town here. As to the date of effect, the schedule will apply from 1 January 2016, which of courses is the original date of the effect of the multinational anti-avoidance legislation. There has been public consultation—a public consultation paper was released on 12 February 2018—and the Treasurer received a number of submissions from groups as diverse as Deloitte, the Tax Justice Network and the Australian Retailers Association. There was a general consensus of support for the proposed amendments to this bill, and Deloitte in fact also provided some minor technical amendments to the exposure draft legislation. The financial impact of this is estimated to be unquantifiable, but it will result in a gain to revenue over the period 2017-18 to 2020-21.

Schedule 2 is about improving the integrity of the small-business capital gains tax concessions. It gives effect to the 2017-18 budget announcement that the government would amend the small-business capital gains tax concessions to ensure that they could only be accessed in relation to assets used in a small business or ownership interests in a small business so that the capital gains tax concessions that are available are only used and accessed appropriately. The object of those small-business capital gains tax concessions is to provide relief from capital gains tax on the disposal of assets related to a small business. Currently the problem, of course, is that some taxpayers are able to access those concessions for assets which are entirely unrelated to their small business. For example, they can arrange their affairs so that their ownership interests in larger businesses do not count towards the tests for determining eligibility for these concessions. As of 1 July last year, additional basic conditions have to be satisfied to ensure that small-business capital gains tax concessions are only available to genuine small businesses. This includes testing the size of the company or the trust that is being disposed of to raise that capital gain.

The proposed amendments tighten the eligibility criteria for the small-business capital gains tax concessions and ensure that they are better targeted to those to whom it is relevant. The concessions themselves, it should be noted, are not changing; they will continue to be available to genuine small-business taxpayers with an aggregated turnover of less than $2 million or business assets of less than $6 million. The intention here is that the measure will apply retrospectively from 1 July 2017, and the application is consistent with the budget announcement on 9 May 2017 about ensuring that those concessions can only be accessed in relation to the assets used in a small business or ownership interests in a small business. As you can see, this is little more than an integrity measure to shore up measures that have already been put into place. There was public consultation on this particular legislation as well. The accompanying explanatory material was circulated in February this year, and feedback from the consultation has been incorporated into the final drafting of the bill. While it's hard to quantify the financial gain that will inevitably come from this particular measure, again, it will be over the forward estimates period.

There is a further schedule around fin-tech and venture capital amendments—schedule 3. This is a particularly important amendment for my home state of Victoria, where the fin-tech industry is booming. Schedule 3 of this bill amends the Income Tax Assessment Act to clarify that early-stage venture capital limited partnerships, also known as ESVCLPs—rather a mouthful—and venture capital limited partnerships, VCLPs, can make investments in fin-tech firms. This will ensure that fin-tech businesses have better access to the capital that they need to grow and succeed.

This is part of a suite of financing alternatives that the coalition government, the National-Liberal Morrison coalition government, have been putting together for some time. You will recall that last week we discussed crowdsourced funding arrangements. Not that long ago, we established the ASIC sandbox to allow fintechs to operate temporarily without a full financial licence to see whether their businesses are viable. This is all part of the suite of laws that allow fintechs the best chance of getting established, growing and thriving in this country. It is a new industry and a very exciting industry that's growing not just in Australia but worldwide. It's very important that we compete for the best and brightest minds in this space.

The government is clearly committed to encouraging innovation throughout the Australian economy. To this end the $1.1 billion National Innovation and Science Agenda, NISA, was announced, you will recall, in December 2015. It included enhanced tax concessions for these early-stage venture capital limited partnerships and also for venture capital limited partnerships. These particular programs encourage venture capital investment in Australian start-ups, providing these businesses with the funds that they need to grow and to prosper. This particular schedule will clarify that early-stage venture capital limited partnerships and also venture capital limited partnerships can invest in fintech businesses that are developing the new technology, including using technology in a novel way, such as through developing new products and services, by removing the ambiguity from the tax law and also providing certainty for venture capital investors. The amendments outlined in schedule 3 will impact both investors and participants in early-stage venture capital limited partnerships and also venture capital limited partnerships regimes.

The amendments are supported by stakeholders and will provide particular benefit to venture capital investors in fintech businesses, providing certainty that they can invest in fintech, and it will also benefit the fintech businesses themselves as they will have better access to improved venture capital funding as a result of these changes. The fintech amendment was announced as part of the Treasurer's fintech statement, which was released in March 2016. The Treasury conducted an initial public consultation into this particular bill, on the amendments in schedule 3, and received a number of responses from key stakeholders, including the Australian Private Equity and Venture Capital Association, some law firms, some accounting firms and Innovation and Science Australia. The consultation process started in October last year and concluded in November. Following that particular consultation process, the Treasury worked with the stakeholders, the Department of Industry, Innovation and Science, Innovation and Science Australia, AusIndustry and the ATO to refine the current bill to reflect a number of the suggestions made by stakeholders. I should mention that those stakeholders were broadly very supportive of the changes that were being made to fintechs. The financial impact of these changes is hard to quantify, but it's all about having the right policy settings to allow these particular firms, fintech firms—this growing industry—to grow, thrive and prosper.

There is another schedule to this particular legislation, schedule 4, which is about tax exemptions for payments made under the Defence Force Ombudsman scheme. This is to exempt from income tax payments the reparations to victims of abuse in the Australian Defence Force. That is very important. The government previously made similar payments to victims of abuse in the Australian Defence Force through the Defence Abuse Response Taskforce. The taskforce administered reparation payments of up to $50,000 through the Defence Abuse Reparation Scheme to complainants who likely suffered sexual and other abuse by a member of Defence. These payments were specifically exempted from income tax as there was a possibility that the payment could be seen to arise from employment with Defence and considered income in the hands of the recipient. The task force concluded on 31 August 2016 and assessed any abuse that occurred prior to 11 April 2011.

In the budget this year the government announced that it would continue the existing functions of the Defence Force Ombudsman and expand its role to include the ability to make recommendations for reparation payments. The government announced that it would provide $19.5 million over four years from 2017-18 for the reparation payments. The previous functions that were undertaken by the task force and the scheme are effectively being replicated and will now be executed by the Defence Force Ombudsman. It affects only the victims of abuse in the Australian Defence Force who receive reparation payments.

The Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018 covers a number of quite diverse areas, all of which are important, and I commend this bill to the Senate.

Senator SESELJA (Australian Capital Territory—Assistant Minister for Treasury and Finance) (11:15): I want to very much thank senators for their contributions and for their support for what is a very, very important bill, the Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018, as I think was so eloquently outlined by Senator Hume and others.

I want to go through a couple of the key elements of the bill before summing up. Schedule 1 of the bill strengthens the integrity of the Multinational Anti-Avoidance Law and ensures that it operates as intended. This amendment will further deliver on what has been a very tough stance from this Liberal-National government against multinational tax avoidance, as demonstrated by the successive measures implemented in recent years to ensure that multinationals pay their fair share of tax in Australia.

Unlike the opposition, the Labor Party, who have talked a big game in opposition on multinational tax avoidance, this is something that we deliver on in government. We deliver on it as a principled position for a number of reasons. We deliver on it because, by having everyone pay their fair share, by ensuring that large multinationals can't profit-shift offshore, by having them pay their fair share, Australian taxpayers—the hardworking men and women who are working hard every day and paying a lot of income tax or those who are building up their small and medium enterprises and paying their fair share of tax—can rely on services to be delivered by the Australian government. The way that we can do that, while growing the economy and putting the budget back into balance, is to have everyone pay their fair share. So, as a matter of principle, we have a stance that says multinationals must pay their fair share. Schedule 1, by strengthening the integrity of the Multinational Anti-Avoidance Law, ensures that we get fairness in the system.

If you look at the budget measures we have undertaken and the approach that the coalition has taken to economic policy, you see that these are always built on those pillars. We do everything we can to grow the economy. We grow the economy by lowering taxes, whether that's by getting rid of things like the mining tax and the carbon tax, whether that's by lowering people's electricity bills, whether that is by lowering income tax for hardworking taxpayers, whether that's by lowering taxes for small business so they can grow their business and employ more Australians, or whether that's by getting rid of red tape—as we have done every year since we came into government. All of that has helped Australians who are having a go to do better and has helped our economy to thrive.

We've put in place measures, such as our free trade agreements, which deliver more economic activity and more jobs into the Australian economy and help get spending under control. We have shown in every budget, successive budgets, that, by limiting the growth of spending, we will be able to get the budget back into balance next year—all the while cutting taxes for small business; all the while cutting taxes for low- and middle-income earners; and all the while being able to deliver record investment in really important areas such as defence, health, education, infrastructure and a range of other very important areas.

This has been our economic approach, and getting multinationals to pay their fair share is part of those integrity measures. We've had integrity measures in other parts of the system. We've moved a record number of people from welfare into work. We've had those people who have been rorting the welfare system taken off the welfare system so that those who need it because they're doing it tough for various reasons have access to it and so we can deliver on things like the NDIS. This has been at the heart of what we've done. We don't just talk about it; we get it done.

Schedule 2 of this bill amends the Income Tax Assessment Act 1997 to give effect to the government's 2017-18 budget announcement. It will improve integrity and better target the small-business capital gains tax concessions. Again, making sure there's integrity in the system ensures that we can continue to deliver tax relief for small businesses, as opposed to the Labor Party who wants to up taxes for small and medium enterprises. It allows us to deliver that income tax relief and it allows us to deliver the services that Australians expect and Australians want their government to be able to deliver.

These amendments are designed to ensure that the concessions can only be accessed in relation to assets used in a small business or ownership interests in a small business. Why is this important? It's because the amendments introduce a test on the size of the business being disposed of to prevent inappropriate access to the concessions for assets unrelated to a small business, so it brings them in. This ensures that these important concessions continue to benefit those who need them most—and that's hardworking small businesses. Any number of measures that we put in place to support small business is because we know that these are hardworking Australians and these are hardworking men and women who put their capital on the line, who often put their house on the line, who often work 50-, 60- or 70-hour weeks, and who often have a family business where everyone contributes. At every turn, the Liberal-National government seeks to make things a little bit easier for those hardworking men and women. It says to them, 'We'll lower your tax burden, we'll lower the amount of red tape, we'll work hard to lower your energy bills, we'll build a framework of a strong economy through free trade and other things, and we'll control our own spending so that you're not burdened with excessive taxes down the track and so we can deliver the infrastructure and the services that are necessary for you to thrive.'

The government is committed to establishing Australia as a leading global financial technology, or fintech, hub. This is a major area of potential growth. Schedule 3 of this bill builds on this work. It builds on the work of our government to ensure that we have the right policy settings in place to foster innovation. This has been a key focus of our government, and one of the reasons it's a key focus of our government is because we know that Australians have some of the best examples of innovation, invention, and research and development in the world. But, because of some of the challenges in getting capital, we haven't always been able to fully exploit and build on those great innovations and that great entrepreneurship that exists and is in the DNA of the Australian people. We see it as a partnership and a way of assisting businesses and entrepreneurs who come up with those amazing ideas to then be able to get the capital that they need so that they can then employ people, grow their businesses, have profitable businesses, reinvest in those businesses, employ more people, grow our economy and provide the opportunities that we want to see for Australian men and women as they come into the workforce and as they stay in the workforce.

Schedule 3, to that end, amends the early-stage venture capital limited partnership, the venture capital limited partnership and tax incentives for early-stage investor regimes of the Income Tax Assessment Act 1997. What this does is it clarifies that early-stage venture capital limited partnerships and venture capital limited partnerships can invest in innovative fintech businesses, removes ambiguity from the tax law and provides certainty for venture capital investors.

As I said earlier, we've got extraordinary entrepreneurs. If you go to our universities and many of our small businesses, and if you meet our scientists who are coming up with the research and development, the ideas and the great technological breakthroughs, we invest so much. We've got a great record as a government in things like the Medical Research Future Fund. That is one area of extraordinary innovation that will see jobs grow and, just as importantly, will save lives. It will see Australians living longer and living healthier lives through medical research. We think there is a major economic advantage in that as well as people live longer lives and as we develop these products and sell them to the world.

We've got these extraordinary scientists and innovators, and we want to bring more capital behind them so that they can indeed have the opportunity to develop those products. Instead of people having to go offshore in order to fully develop their ideas and their products, as has unfortunately happened in many cases in the past, we want them developing here. We're seeing more of that. We're seeing that with collaborations in partnerships between our research organisations and our universities. We do it with things like CRCs. One of the innovations we have brought in is the CRCPs, which is a great addition to the cooperative research centres. The cooperative research centres are a way of bringing all those entities together. It is world-leading. The CRCPs are shorter-term and more focused. The industry response—I had responsibility in that area—has been very positive. We're able to do things again in a slightly quicker and a more innovative way, and do some of those shorter-term smaller projects which can still have absolutely substantial benefits.

As I said, this will clarify those early stage venture capital limited partnerships—and venture capital limited partnerships can invest in innovative fintech businesses—and it remove ambiguity from the tax law. That is important for attracting that investment. We want to see that investment continuing to come from Australian investors and also from foreign investors in some of our great ideas and backing our entrepreneurs.

This again demonstrates the government's continuing commitment to promoting a culture of entrepreneurship and risk-taking in Australia, and it will help ensure that innovative Australian businesses have access to the capital and expertise that they need to grow and succeed. It works hand in hand with those other aspects of policy that I have outlined. When you allow capital to come in, when you encourage entrepreneurship, when you have those industry partnerships, when you lower taxes for small and medium businesses, when you allow free trade to thrive and when you cut red tape and encourage Australians to get ahead and employ more people, then these things come together in a very positive way—as we are seeing with the record number of jobs that we have created. We very much believe in this.

Going back to the 2017-18 budget, the government announced, on another aspect of this bill, that it would expand the role of the Defence Force Ombudsman to make recommendations for reparation payments. All complains of abuse in Defence made to the Defence Force Ombudsman will now include an assessment for a reparation payment. Previously, similar reparation payments were administered by the Defence Abuse Response Taskforce, which concluded on 31 August 2016. The reparation payments made by the Defence Abuse Response Taskforce were specifically exempt from income tax. This is an important change, and it builds on some of this good work. It's another way of honouring the amazing work that our Defence Force personnel do.

We are committed not just to the defence of our nation but to the health and welfare of our Defence personnel. I think we have learnt a lot in recent years about where we have let them down from time to time as a nation. We have learnt where we can do better. We always strive to make sure that we look after the welfare of those men and women who put their lives on the line for the sake of our nation and our freedom.

In addition, schedule 4 of this bill responds to the government's expansion of the existing functions of the Defence Force Ombudsman. Similar reparation payments were previously administered by the Defence Abuse Response Taskforce, which concluded on 31 August 2016. Reparation payments made by the task force, as I said, were specifically exempt from income tax.

Schedule 4 ensures that the new reparation payments recommended by the Defence Force Ombudsman are exempt from income tax. Reparation payments are not intended to be compensation, and complainants will not be required to release the Commonwealth from liability. These amendments ensure the recipients get the full benefit of such a payment free from the obligation to pay income tax. For all of these reasons, all of those schedules come together for some important reforms. I've outlined a number of the reasons. They build on a number of earlier reforms that the Liberal-National government have been proud to deliver, and I look forward to the hopeful passage of this bill thorough the Senate. I commend this bill to the Senate.

Question agreed to.

Bill read a second time.

Senator CAMERON (New South Wales) (11:31): I move opposition amendment (1) on sheet 8437:

(1) Schedule 2, item 3, page 8 (line 14), omit "1 July 2017", substitute "8 February 2018".

This amendment changes the start date for the small business capital gains tax concession measure in schedule 2. Labor flagged our position on this issue during debate on this bill in the other place. Stakeholders have informed Labor that the additional conditions for eligibility for the concessions are detailed in a way that makes the changes more akin to a policy change rather than an integrity change and captures taxpayers who engage in good faith, according to the intent of the concessions. These changes only came to light when the detailed amendments were released in the exposure draft bill on 8 February 2018. Accordingly, Labor's amendment would change the implementation date from 1 July 2017, as per the budget announcement, to 8 February 2018. That is the date of the exposure draft release.

The reality is that this bill could have probably been dealt with and passed an hour ago. We know exactly what's happening here. This is a government with no agenda. This is a government that really have got no legislative agenda of any substance before the Senate. They are in a situation where they are too busy continuing to knife each other, attacking each other, moving from one Prime Minister to another to actually deal with the issues of importance to the Australian people. That's why we had these filibusters take place, where backbench senators stand up and try to talk out 20 minutes on a bill that could have been dealt with in a short period of time. I understand there's no controversy, that we've got agreement on the amendments—there's agreement on this amendment. We should actually get on with the business of this Senate. The problem is that if we do get through the business of the Senate, we will probably run out of legislation. This rabble of a government—their own Prime Minister describes them as 'muppets'—can't get their act together. We had Senator Stoker stand up and tell us about how great things are under a Liberal government. We had Senator Seselja just stand up and tell us how great things are going under this coalition government—they are going swimmingly, aren't they? Things are going swimmingly, going so well under the coalition. What an absolute joke, what an absolute rabble of a government you lot are.

We get told about how they want to deal with the integrity of the tax system. Integrity was so important back in the 2014-15 budget that they actually cut $120 million out of ASIC. That's how much they cared about integrity—$120 million out of ASIC. The Hon. Steven Ciobo, the then Parliamentary Secretary to the Treasurer, said this:

… there is scope for the financial services industry … to self-regulate more.

That's where they were. That's how much they cared about integrity. They wanted the financial services sector to self-regulate more. What a joke. What an absolute joke. Maybe that explains what their real position is. Maybe that explains why current Prime Minister Morrison actually voted against the royal commission into the banks on 26 occasions. Maybe he wanted the banks to have more self-regulation. Maybe he thought the banks could look after regulation better than the government. Well, under the Abbott-Turnbull-Morrison government that we've got now, they probably could. But look at what they've left.

On 26 occasions this Prime Minister voted against the royal commission into the banks. And people were saying, 'This is a problem. This will mean that ASIC will not be able to carry out its responsibilities as the corporate regulator.' Maybe that's what they wanted, and that's why Prime Minister Morrison voted against the banking inquiry on 26 occasions.

I see Senator Williams has just come into the chamber. At least Senator Williams was consistent: he called for a royal commission into the banking sector. Unfortunately, he could not convince his counterparts in the National Party or Liberal Party to actually implement the royal commission into the banking industry. So, I just don't buy these lectures that we're getting from Senator Stoker and other senators about the great job this government is doing. They are an absolute rabble of a government. They are pathetic. They are a terrible government. They are just—

Senator Duniam: We are not!

Senator CAMERON: You are. We're told they are not terrible.

The TEMPORARY CHAIR ( Senator Bernardi ): Address your comments through the chair, Senator Cameron.

Senator CAMERON: Through the chair: talk about self-delusion, Chair. They're not a bad government? Well, look, if you're not a bad government, get on with the business of government. Let's get this dealt with. Let's deal with this legislation. Stop trying to filibuster. Stop standing up here for 20 minutes. Each government senator stands up and rabbits on for 20 minutes, rabbits on with a prepared speech, while Senator Seselja gets up and wanders all over the place. This amendment is before us. We should support this amendment. We should deal with this bill and get on with the business of government.

Senator SESELJA (Australian Capital Territory—Assistant Minister for Treasury and Finance) (11:38): I'm fascinated by the tactics of Senator Cameron taking eight minutes, waffling on about anything other than this bill, to tell us about a filibuster. He's claiming a filibuster, and he spent seven or eight minutes going on about what he didn't like about the 2014 budget and quoting the parliamentary secretary at the time, Steven Ciobo, rather than dealing with the bill.

Senator Cameron claims the economy's not going well. That's absolute rubbish. Senator Cameron didn't like Senator Stoker's contribution—or Senator Hume's outstanding contribution—because he wouldn't want the opportunity to put on the record why this kind of legislation is important and how it builds on the Liberal-National government's agenda and achievements of delivering over one million jobs for our economy. Those one million jobs came despite the Labor Party's opposition. Every major measure we took, you were there to oppose it. When we got rid of the carbon tax and when we got rid of the mining tax, you were there to oppose it. When we were cutting back taxes for small and medium enterprises, you were there to oppose it. When we were dealing with union corruption, which holds our economy back, Senator Cameron and the Labor Party were there to oppose it.

Senator Cameron gets up and gives us a lecture. He takes several minutes—in fact eight or nine minutes—on an amendment to give us a lecture about filibustering, and then he claims that those economic credentials and those achievements aren't real. They are real. They haven't come about by accident. They've come about through sound economic policy, through the right legislation and through the right settings. They've come about despite the Labor Party. As we have fixed your economic mess and as we've fixed your budget mess, at every turn you have opposed us.

We will make no apology for talking about our legislative agenda, which is about tax integrity. We have delivered when it comes to multinationals, when you did nothing. What did the Labor Party do on multinationals when they were in government? Absolutely nothing. We had Senator Dastyari come in opposition and talk about what he wanted to do, which they did nothing about when they were in government. They had six years and they didn't get it done. The economy absolutely stagnated. We have taken a different approach, and that has delivered over one million jobs, lower taxes, and services we need for Australians. We've secured our borders. We've built up our defence industry. We are delivering a balanced budget. Those are things the Labor Party could only dream of when they were in government. We're not going to be lectured to by Senator Cameron on this or anything else.

I will now turn to Senator Cameron's and the opposition's amendment. The government announced, in the 2017-18 budget, an integrity measure to ensure that the small business CGT concessions are appropriately targeted to genuine small businesses with effect from 1 July 2017. The opposition's amendment would defer the start of this measure to 8 February 2018. Delaying the start would allow a further period of time in which to transition into the new arrangements. We believe this is an important integrity measure. The government needs to balance any request for a delayed start against the risk of providing more scope for entities to inappropriately access the small business CGT concessions. Notwithstanding these concerns, the government is willing to support the amendment proposed by the opposition to delay the start to 8 February to 18. The small business CGT concessions are not changing. These concessions provide valuable relief from taxation for small business owners on capital gains on the disposal of assets related to their business, allowing them to reinvest and grow as well as contribute to their retirement savings. Passing this bill will ensure small business CGT concessions are appropriately targeted so they can continue to benefit those that need it the most—hardworking Australian small businesses.

Senator CAMERON (New South Wales) (11:43): Again, what we've seen here is a lecture from a frontbencher whose own Prime Minister described the backbench and the ministry of this government as muppets in a muppet show. We've just seen the muppet show in action again. It's the absolute muppet show. No-one is arguing about getting unemployment down. I'll tell you that what we need is a decent wage for working people in this country.

Government senators interjecting—

The ACTING DEPUTY PRESIDENT ( Senator Bernardi ): Senator Cameron, would you resume your seat for a moment. It's very difficult to hear Senator Cameron and the contribution he's making. I ask for a little bit of order.

Senator Seselja interjecting—

The ACTING DEPUTY PRESIDENT: Is this a point of order, Senator Seselja?

Senator Seselja: On the point of order—

The ACTING DEPUTY PRESIDENT: There is no point of order.

Senator Seselja: I have a point of order. Senator Cameron shouldn't be sitting there and misleading the Senate. It is unparliamentary to mislead the Senate—

The ACTING DEPUTY PRESIDENT: Please resume your seat, Minister. Senator Cameron, you have the call for a further 30 seconds.

Senator CAMERON: Not only is this mob economically incompetent, but they don't know what a point of order is. They just don't know. They can't enforce a point of order. They're an absolute joke. We are in a position where we could have dealt with this an hour ago. You're putting on a great muppet show for the people in the Senate now. This is an absolute joke.

Progress reported.

Senator BUSHBY (Tasmania—Chief Government Whip in the Senate) (11:45): I present the 11th report of 2018 of the Selection of Bills Committee, and I seek leave to have the report incorporated in Hansard.

Leave granted.

The report read as follows—

Senator McKIM (Tasmania) (11:46): I want to briefly touch on the recommendation of the Selection of Bills Committee in Report No. 11 of 2018 that the Crimes Legislation Amendment (Police Powers at Airports) Bill 2018 not be referred to a committee. What we will get here—I'll make a confident prediction—is that this will end up with the Parliamentary Joint Committee on Intelligence and Security, which, as we all know, is a closed shop between the two establishment parties in this place. I'll also confidently predict that the committee will ultimately recommend supporting this piece of legislation.

The Australian people and all senators should understand that this bill contains highly coercive powers. It is proposing that Australian Federal Police officers be able to wander up to any person at a designated airport in Australia and say to them, 'Papers, please.' We've seen, historically, what happens when societies go down this route. This is a dangerous piece of legislation. If it's enacted through this parliament, it will join the over 200 pieces of legislation in the last 20 years that have removed fundamental rights, freedoms and liberties in this country. It will be a continuation of the slow shuffle of the major establishment parties, leading this country down the road towards an authoritarian police state. Again, this bill deserves to be examined and should have been recommended for examination by the Legal and Constitutional Affairs Legislation Committee. It should have been subject to significant public hearings and it should have been able to be inquired into through a committee that is transparent and a committee that has a fine record of doing its job with regard to assessing legislation. Instead, it has been referred to a committee that is a closed shop, that no member of the crossbench of this Senate, whether it be Greens senators, Centre Alliance senators or any other senators on the crossbench, has the opportunity to participate in. Once again, we see the closed shop that occurs in the PJCIS that I confidently predict will occur this time.

I believe it's likely that the committee will recommend rasping off a few of the roughest edges of this legislation, because that's often what happens on similar bills, but we will be presented—once again, I confidently predict—with a recommendation to pass the bill. It will pass with the combined LNP-ALP votes through both houses of the parliament, based on a PJCIS recommendation, and it will again remove fundamental rights, freedoms and liberties that many people on the government side of this chamber like to claim they believe in and support, but they can't get together quick enough in the PJCIS to erode those fundamental rights, freedoms and liberties, for which we used to send Australians overseas to fight and die in order to protect and enhance.

Question agreed to.

The PRESIDENT (11:51): I remind senators that the question may be put on that proposal at any senator's request. There being none, I shall now proceed to discovery of formal business.

Senator STEELE-JOHN (Western Australia) (12:09): I move:

That the time for the presentation of the report of the Joint Standing Committee on Electoral Matters on its inquiry into the Commonwealth Electoral Amendment (Lowering Voting Age and Increasing Voter Participation) Bill 2018 be extended to 6 December 2018.

Question agreed to.

Senator SIEWERT (Western Australia—Australian Greens Whip) (12:36): I move:

That there be laid on the table by the Minister representing the Minister for Senior Australians and Aged Care, by 5 pm on 28 September 2018, the most recent data on the number of people in the national prioritisation queue who have been waiting longer than 12 months to receive home care packages.

Senator CHISHOLM (Queensland) (12:36): I seek leave for a short statement.

The PRESIDENT: Leave is granted for one minute.

Senator CHISHOLM: Labor has repeatedly called for the Liberal-National government to release the latest data on the home care package waitlist, which is now weeks late. Disappointingly, the minister for aged care delayed the last set of data, March 2018, by more than three months. What is the government trying to hide? The delayed 2018 quarter of data on the home care package waitlist revealed more than 108,000 older Australians are waiting for care. This includes around 88,000 older Australians waiting with high needs, many with dementia. This is now a crisis made under the watch of the Liberal-National government. This government now needs to act and fix the growing waitlist. Labor will support this motion but calls on the Minister for Senior Australians and Aged Care to release this data immediately.

Question agreed to.

Senator CASH (Western Australia—Minister for Small and Family Business, Skills and Vocational Education) (12:46): I move:

That this bill may proceed without formalities and be now read a first time.

Question agreed to.

Bills read a first time.

Senator CASH (Western Australia—Minister for Small and Family Business, Skills and Vocational Education) (12:46): I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Criminal Code Amendment (Food Contamination) Bill 2018 strengthens penalties for existing offences, and amends the nation's sabotage offences, to deal with acts of food supply contamination that pose a risk to the safety of the Australian community.

The consequences we have witnessed from the contamination of strawberries demonstrate the public anxiety, economic loss and real-world harm that a rogue actor can cause.

This harm has been amplified by copycat offenders and the perpetrators of hoaxes.

The bill sends a very clear message. This behaviour is not a joke. It is not funny. It is a serious criminal offence which we denounce, and offenders will face serious consequences.

Contamination of goods

It is already illegal to intentionally contaminate goods with the intention of causing public alarm or anxiety, widespread or nationally significant economic loss, or harm to public health. It is also a crime to threaten to contaminate goods, or make false statements about the contamination of goods for one of those purposes.

However, recent events have demonstrated that the existing maximum penalty of 10 years imprisonment is not high enough.

The bill will address this by increasing the maximum penalty to 15 years' imprisonment.

This will send a strong signal to would-be offenders by placing the penalty at an equivalent level to child pornography and funding a terrorist organisation.

There is a real risk that recent events will inspire hoaxes and copycat offenders. These people need to know that if they engage in this conduct, they will be committing a crime.

The bill will create new offences that apply where a person contaminates goods, threatens to contaminate goods or makes false statements about the contamination of goods and is reckless as to causing public alarm or anxiety, economic loss, or harm to public health.

These offences will attract a maximum penalty of 10 years' imprisonment.

Sabotage

The government recently modernised Australia's sabotage laws to address the unprecedented threats that we now face. These threats are constantly evolving, and our laws must keep pace.

These laws currently apply to the sabotage of public infrastructure and carry maximum penalties of between seven and 25 years' imprisonment.

Australia's food supply infrastructure is of critical importance to our national security and the wellbeing of our citizens.

The bill will expand the sabotage offences so that they would cover the sabotage of Australia's food supply, where such conduct is intended to prejudice our national security.

Further action

The bill marks an important step towards ensuring that our food supply infrastructure is afforded the same protection as other pieces of our critical infrastructure.

This work must continue. I will raise the issue with my state and territory counterparts and encourage them to strengthen their laws to ensure a robust, nationally consistent approach to the protection of our food supply.

It is important to remember the human toll this is having on Australian farmers, and indeed a whole range of participants in the agricultural sector, who are already doing it tough. Helping our farmers and farming communities is this government's number one priority, and we have committed $1 million to deal with this crisis and help get the industry back on its feet.

Conclusion

The events of this week represent large scale criminality relating to food products in Australia.

Strong action is required to deter and punish those who would target our food supply infrastructure. Their actions hurt the Australian community. They sabotage the livelihoods of growers, communities, towns and whole regions. They frighten people away from enjoying the beautiful, fresh, healthy produce our farmer's grow. This Bill demonstrates that the Government will not stand for it.

It is the first duty of every Government is to keep its people safe, and we are committed to doing so.

Senator FARRELL (South Australia—Deputy Leader of the Opposition in the Senate) (12:46): As all Australians would be aware, since 13 September this year there have been a number of confirmed cases of people finding needless in strawberries. While the initial reporting concerned Berry Licious and Berry Obsession strawberries from Queensland, police and health authorities have warned of copycat cases across Australia.

On 19 September, it was reported by the AAP that Australia's strawberry contamination scare has now spread across six states. The Home Affairs minister said on Wednesday that there were up to 100 reported cases, although many of these were believed to be hoaxes. In response to these and other stories of needles being found in fruit, some supermarkets have pulled their strawberries from their shelves. We know that our farmers are suffering and we are reaching a critical point where lasting damage to the industry could be done. This is a completely unacceptable situation and is having a devastating impact on strawberry farmers.

The Morrison government has responded by making some changes to Commonwealth laws that it hopes will assist in deterring and prosecuting the individuals who have engaged in these recklessly destructive behaviours. According to a search of the Commonwealth Sentencing Database conducted by the Parliamentary Library on 19 September, there are no cases recorded against any of the existing offences in part 9.6 of the Commonwealth Criminal Code which deal with food contamination. Those offences were first introduced in 2004. While we have not had time to ascertain the reasons for this, it may be that the authorities have not used the existing Commonwealth offence provisions because of the existence of equivalent state and territory criminal offences in relation to the contamination of food. Those state and territory offences have a broader application than the equivalent Commonwealth offences due to the constitutional limitations on the Commonwealth's legislative powers. Those people who have caused the current crisis should face the full force of the law. What they have done is a despicable act with far-reaching consequences. I would urge all members in this place, when they leave Canberra today and tomorrow, to support the Australian farmers by buying a few punnets of strawberries at home and sticking it up on social media. Things like this matter.

I would like to note that the opposition has been asked to consider and agree to this legislation in an extraordinarily short period of time. It's highly unusual for amendments to be made, in particular to our Criminal Code, without any consultation at all. We do not want to set this as a precedent for future legislation. On this occasion, we recognise the gravity of the situation at hand. Labor will be supporting the bill.

Senator McKIM (Tasmania) (12:50): The Australian Greens utterly condemn any tampering with food in a dangerous way in our country, as we have seen recently around strawberries. We regard that kind of action as completely unacceptable. As such, we are very open to supporting reasonable legislative change to do what we can to ensure a strong legislative framework in this area. But, let's face it, to describe the Criminal Code Amendment (Food Contamination) Bill 2018 as a rushed job would be an understatement.

I want to acknowledge the officers of the Attorney-General's Department who briefed Mr Bandt and me on this bill this morning. I thank them for the time they provided to us and for the professional way they engaged with us. However, it needs to be on the record that this bill has been subject to no consultation whatsoever. It has not and will not be subject to any kind of parliamentary inquiry. As Senator Farrell has just said, it is most unusual for amendments to the Criminal Code to be made in such a short time frame. We have concerns about potential unintended consequences of this legislation, and we haven't had time to do the consultation that we need to do with our stakeholders and with people who we seek advice from with regard to legislation such as this. This leaves us in a very difficult position.

On balance, we've determined not to support this legislation at this stage, simply because the government has not provided enough time for us to conduct consultations or for the normal inquiry processes of the Senate to take place. We regret that that has occurred. We want to, and do, strongly support our primary producers, including, in this case, strawberry farmers. We understand the impacts that the events of the last few days have had on them. However, due to our concern about the indecent haste with which the government is proceeding and due to the lack of opportunity for us to consult and for the Senate to do the job it would normally be able to do on legislation such as this, we are not in a position to support the bill at this stage.

Senator CASH (Western Australia—Minister for Small and Family Business, Skills and Vocational Education) (12:53): I thank senators for their contribution to the debate on the Criminal Code Amendment (Food Contamination) Bill 2018. This bill urgently addresses significant gaps in Australia's current contamination laws. The bill tackles distressing recent events relating to the tampering of strawberries in Australia that have posed a risk to the safety of the Australian community and the livelihood of significant parts of our agriculture sector. It is a strong and necessary response to circumstances which demand nothing less. Families need to have the assurance that the Australian produce that they are buying is safe for their kids, safe for themselves and safe for their loved ones. Australian farmers need our support to ensure that their livelihoods are not put at further risk.

As you are aware, we have not relied solely upon legislation in response to this challenge. The government has also committed $1 million to make more food safety officials urgently available to increase detection, fast-track recalls and assist the strawberry industry to rebuild confidence. It is essential that we in this place act quickly and decisively—and that is exactly what the government is doing—to ensure our criminal laws are appropriately adapted to the threats that we face. This bill reflects the absolute commitment of this government to do all that it can to keep Australians safe as they go about their everyday lives. The Criminal Code Amendment (Food Contamination) Bill 2018 strengthens penalties for existing offences and amends the nation's sabotage offences to deal with acts of food supply contamination that pose a risk to the safety of the Australian community.

The consequences we have witnessed from the contamination of strawberries demonstrates the public anxiety, economic loss and real-world harm that a rogue actor can cause. This harm has been amplified by copycat offenders and the perpetrators of hoaxes. This bill sends a very clear message: this behaviour is not a joke and it is not funny; it is a serious criminal offence which we denounce, and offenders will face serious consequences. It is already illegal to intentionally contaminate goods with the intention of causing public alarm or anxiety, of widespread or a nationally significant economic loss or of harm to public health. It is also a crime to threaten to contaminate goods or make false statements about the contamination of goods for one of those purposes.

However, recent events have demonstrated that the existing maximum penalty of 10 years imprisonment is not high enough. The bill will address this by increasing the maximum penalty to 15 years imprisonment. This will send a strong signal to would-be offenders by placing the penalty at an equivalent level to child pornography and funding a terrorist organisation. There is a real risk that the recent event will inspire hoaxes and copycat offenders. These people need to know that, if they engage in this conduct, they will be committing a crime. The bill would create new offences that apply where a person contaminates goods, threatens to contaminate goods or makes false statements about the contamination of goods and is reckless to causing public alarm or anxiety, economic loss or harm to public health. These offences will attract a maximum penalty of 10 years imprisonment.

The government recently modernised Australia's sabotage laws to address the unprecedented threats that we now face. These threats are constantly evolving and our laws must keep pace. These laws currently apply to the sabotage of public infrastructure and carry maximum penalties of between seven and 25 years imprisonment. Australia's food supply infrastructure is of critical importance to our national security and the wellbeing of our citizens. The bill will expand the sabotage offences so that they would cover the sabotage of Australia's food supply where such conduct is intended to prejudice national security. The bill marks an important step towards ensuring that our food supply infrastructure is afforded the same protection as other pieces of critical infrastructure. This work must continue. The issue will be raised with the state and territory counterparts to encourage them to strengthen their laws to ensure a robust, nationally consistent approach to the protection of food supply. It is also important to remember the human toll that these events are now having on Australian farmers and, indeed, a whole range of participants in the agricultural sector, who, as we know, are already doing it tough. Helping our farmers and farming communities is this government's No. 1 priority. As I've already stated, we have committed $1 million to deal with this crisis and help get the industry back on its feet.

The events of this week represent large-scale criminality relating to food products in Australia. Strong action is required to deter and punish those who would target our food supply infrastructure. Their actions hurt the Australian community. They sabotage the livelihood of growers, communities, towns and whole regions, and let us not forget the impact on small and family businesses. Their actions frighten people away from enjoying the beautiful, fresh, healthy produce that our farmers grow.

This bill demonstrates that the government will not stand for this type of behaviour. It is the first duty of every government to keep its people safe, and this government is committed to doing this. With that, I commend the bill to the chamber.

Question agreed to.

Bill read a second time.

The ACTING DEPUTY PRESIDENT ( Senator Bernardi ) (13:01): No amendments to the bill have been circulated. Does any senator require a committee stage? If not, I shall call the minister to move the third reading.

Senator CASH (Western Australia—Minister for Small and Family Business, Skills and Vocational Education) (13:01): I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Senator PRATT (Western Australia) (13:02): The Treasury Laws Amendment (Supporting Australian Farmers) Bill 2018 is a bill that has Labor's support. It amends the Income Tax Assessment Act 1997 to allow immediate deduction, rather than deduction over the course of three years, of the cost of fodder storage assets, such as silos and hay sheds, that are used to store grain and animal feed.

The government has made the case that it will assist primary producers by making it easier to invest in these assets. We know that this measure was announced on 19 August and applies to fodder storage assets first used or installed ready for use on or after that date. The economic impact of that measure on our fiscal bottom line is $75 million over the forward estimates.

While we on this side of the chamber are supportive of this measure, we do note what we have found to be the haphazard approach that the government has taken to the drought that many Australian farmers are unfortunately suffering from. Firstly, there was the increase in the farm household allowance payments from three years to four years, effective from 1 August this year. Then, a few days later, on 5 August, the government announced a $190 million drought package, claiming that it provided immediate financial support to farming families and their communities.

Frankly, given that the additional funding did not start flowing on 5 August, this is a bit of a stretch. We are yet to see how many farmers will actually access the farm household allowance supplementary payments. As the member for Hunter, the shadow minister for agriculture, has pointed out, there is in fact a real risk that farming families will miss out. They'll miss out on the full $12,000 because the government insists on splitting the payment and denying farmers the possibility of getting a lump sum payment.

In his second-reading speech, the Assistant Treasurer made mention of increased funding for mental health support, something which, of course, would be welcomed by both sides of the Senate, yet it was just last week that the new Prime Minister tweeted what was found to be an extremely insensitive video that claimed that drought 'is a necessary evil' that can help cut the 'bottom 10 per cent that shouldn't probably be there anyway'. This is not a message that struggling farmers need to hear at this time of crisis. We've called on the Prime Minister to apologise and to remove the video, but he has refused to do so.

So to go to the tax aspect of the measure before us this afternoon, we on this side of the chamber support the principle that more rapid depreciation—what's known in the US literature as 'immediate expense'—can be good policy. Labor supported the government's instant asset write-off, and we did so noting that this government had scrapped Labor's instant asset write-off and then put in place their own instant asset write-off. On top of the instant asset write-off Labor has announced an Australian investment guarantee; it's an asset write-off that delivers for all companies investing in Australia. It's a much more targeted policy, stimulating and supporting the economy, than an across-the-board company tax cut.

I'd like to place on record today in the chamber that work carried out by Victoria University suggests that if you're after investment, then the best bang for your buck of an investment guarantee of more rapid expensing is three times larger than a company tax cut. Labor's Australian investment guarantee also has the benefit for firms that it is permanent and permanently accelerating depreciation for all companies, thereby ensuring that we're able to improve the investment pipeline that businesses deliver. So while I reiterate Labor's support for the bill here in the Senate for the supporting Australian farmers bill that targets these asset write-offs to farmers, it really does demonstrate that the government should consider the need for such measures across other parts of the economy. Thank you.

Senator RUSTON (South Australia—Assistant Minister for International Development and the Pacific) (13:07): I thank Senator Pratt for her contribution, and commend the bill to the Senate.

Question agreed to.

Bill read a second time.

The ACTING DEPUTY PRESIDENT ( Senator Bernardi ) (13:07): As no amendments to the bill have been circulated, I shall call the minister to move the third reading.

Senator RUSTON (South Australia—Assistant Minister for International Development and the Pacific) (13:08): I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Senator PRATT (Western Australia) (13:08): The bill before the chamber this afternoon, the Excise Levies Legislation Amendment (Honey) Bill 2016, is to remove the requirement for purchasers of honey who intend on exporting it to provide the seller with a certificate of their intention to export the honey. For those who are listening to this debate today, technically the honey industry no longer issues, receives or relies upon these certificates when selling to a buyer who intends to export the honey. However, the Senate needs to note today that this legislation was originally introduced in the House of Representatives in December last year. It was a companion bill to the Agriculture and Water Resources Legislation Amendment Bill 2016 to remove this redundant regulation, but, for some reason that I don't quite understand, the government has chosen to split the bills. I hope we will find out why this has occurred and what changed.

So while we on this side support this legislation, we would like to urge the Morrison government to support the honey and bee industries by taking seriously the issue of properly testing imported honey. We have had reports that currently Australian honey testing does not pick up adulterated honey. This is of particular concern. We don't want to see impure honey come into Australia. We want to ensure that the honey that comes in is pure, not only from a biosecurity point of view but also from a consumer point of view. As a consumer, I want to know when I buy and eat honey that it is real honey and that it has not got sugar or other additives in it, which mean, frankly, it is not honey at all. We've seen the government move quickly on strawberry contamination—as they should—but the government must also prioritise action to ensure that honey being imported is not adulterated.

I want to note that bees are absolutely critical to almost all agricultural industries, and consumers need to be confident that they are buying pure honey that has not been adulterated. It is important for our biosecurity and it is incredibly important for the values that consumers hold. The bee industry, like us, is today asking serious questions as to why the Morrison government has chosen not to act so strongly for their industry.

Senator RUSTON (South Australia—Assistant Minister for International Development and the Pacific) (13:11): I thank Senator Pratt for her contribution and commend the bill to the Senate.

Question agreed to.

Bill read a second time.

The ACTING DEPUTY PRESIDENT ( Senator Bernardi ) (13:12): As no amendments to the bill have been circulated, I shall call the minister to move the third reading unless any senator requires that the bill be considered in Committee of the Whole.

Senator RUSTON (South Australia—Assistant Minister for International Development and the Pacific) (13:12): I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

The TEMPORARY CHAIR ( Senator Bernardi ) (13:12): The question is that opposition amendment (1) on sheet 8437 be agreed to.

Question agreed to.

Senator CAMERON (New South Wales) (13:13): I move opposition amendment (1) on sheet 8452:

(1) Schedule 3, page 10 (after line 29) after item 3, insert:

3A At the end of Subdivision 118-F Add:

118-455 Impact Assessment of this Subdivision

(1) As soon as practicable after 24 months after the Treasury Laws Amendment (Tax Integrity and Other Measures) Act 2018 receives the Royal Assent, the Minister must cause an impact assessment of the operation of this Subdivision and other related tax concessions to be conducted.

(2) The impact assessment must:

(a) examine the operation of the tax concession regime for:

   (i) investments made through a *VCLP, *ESVCLP or *AFOF; and

   (ii) investments made directly by foreign residents registered under Part 3 of the Venture Capital Act 2002; and

(b) be conducted by the Department and Innovation and Science Australia; and

(c) make provision for public consultation.

(3) For the purposes of conducting the impact assessment, the reference to Innovation and Science Australia in item 6 of the table in subsection 355-65(4) of Schedule 1 to the Taxation Administration Act 1953 is taken to include the Secretary of the Department.

(4) The Minister must cause a written report about the impact assessment to be prepared.

(5) The Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the day on which the report is given to the Minister.

This amendment requires the minister to instigate an impact assessment of the venture capital tax concession provisions overall, including the measures in schedule 3 to this bill, to ensure they're operating as intended. This impact assessment would be conducted by Treasury and by Innovation and Science Australia, and would be required to commence 24 months after this bill receives royal assent. Labor's position strikes the right balance in supporting this particular measure but also requires the government to conduct a comprehensive, transparent review of the venture capital tax concession framework.

Senator SESELJA (Australian Capital Territory—Assistant Minister for Treasury and Finance) (13:14): The government will be supporting this amendment. Schedule 3 of this bill delivers on a key commitment in the government's FinTech statement. It clarifies that early stage venture capital limited partnerships and venture capital limited partnerships can invest in innovative Australian FinTech businesses.

The opposition's amendment would require Treasury and Innovation and Science Australia to conduct an impact assessment of the operation of the tax concession regime in relation to venture capital investment. This would be undertaken 24 months after the bill receives royal assent and would include consultation. The report on the impact assessment would be tabled in parliament.

The government is willing to support the amendment proposed by the opposition, despite the likely limited benefit a further review would have. We've already made changes as part of our National Innovation and Science Agenda to the tax treatment of ESVCLPs to make them more internationally competitive, to attract greater levels of venture capital investment and to incentivise investors to support early-stage innovation companies. This bill highlights the government's commitment to support innovative businesses in Australia and build a culture of entrepreneurship and risk-taking. Passing this bill will provide greater certainty to venture capital investors, improving access to capital for innovative Australian fintech businesses so that they can grow and succeed.

Question agreed to.

Senator STORER (South Australia) (13:15): I move amendment (1) on sheet 8454:

(1) Schedule 2, item 2, page 6 (line 12), omit "either:", substitute "if you do not satisfy the maximum net asset value test (see section 152‑15)—either:".

Through discussions with Business SA, and as per the discussions of their members with Treasury, my amendment deals with a mischief that the bill intended to address where a tax-paying individual shareholder in a company with significant assets and turnover does not satisfy the maximum net asset value test but qualifies for the small business CGT concessions under the $2 million turnover test. This might be achieved where a shareholder carries on a business in their own right that has a turnover not exceeding $2 million and that is entirely independent of the business of the object company—essentially, the taxpayer starting unrelated small businesses to access the concessions. However, the proposed changes in the bill go too far and include taxpayers who should sit outside the group of taxpayers the government wants to tighten integrity measures for.

While there may be outcomes under existing law which are inequitable, the proposed changes punish the many for the sins of the few. This mischief identified could be easily overcome without creating a disincentive for collaborative investments by requiring that the shareholder satisfies the maximum net asset value test and cannot rely on the $2 million turnover test. This is a simple way of addressing this mischief without it creating unintended consequences. Therefore, my amendment on sheet 8454 is a simple omission in schedule 2, item 2, page 6, line 12 of 'either' and substituting it with 'if you do not satisfy the maximum net asset value test (see section 152-15)—either:'. These new restrictions mean that they do not apply to genuine small businesses that do satisfy the maximum net asset value test. Therefore, I seek the Senate's approval of this amendment.

Senator SESELJA (Australian Capital Territory—Assistant Minister for Treasury and Finance) (13:18): The government won't be supporting this amendment moved by Senator Storer. The government announced, in the 2017-18 budget, an integrity measure to ensure that the small business CGT concessions are appropriately targeted to genuine small businesses. Senator Storer's amendment would mean that taxpayers with less than $6 million in net assets could still benefit from the CGT small business concessions for the disposal of their interest in large businesses. Therefore, the government does not support this amendment, which is inconsistent with the policy intent of the small business CGT concessions. These concessions provide genuine small businesses with valuable relief from taxation on capital gains on the disposal of assets related to their business, allowing them to reinvest and grow as well as contribute to their retirement savings.

The government's bill will ensure that these concessions can only be accessed in relation to assets used in a small business or ownership interests in a small business. Ensuring that the concessions are appropriately targeted ensures that they can continue to be provided to those businesses that need them the most—genuine hardworking small businesses—and, for those reasons, the government can't support this amendment.

Senator CAMERON (New South Wales) (13:19): Labor also opposes Senator Storer's amendment. As noted earlier in the debate on schedule 2, stakeholders have informed Labor that the additional conditions for eligibility for the capital gains tax concessions are detailed in a way that makes the changes more akin to a policy change than an integrity change and, as such, catches taxpayers who engaged in good faith according to the intent of the concessions.

We believe that the amendment to move the start date to 8 February 2018 deals with unintended consequences that arose when the exposure draft was released—that is, we accept the interpretation of many stakeholders that this went beyond just an integrity measure and had elements of policy change, capturing those who structured their affairs before the exposure draft and in good faith.

By removing retrospectivity, as the change in the start date does, we are comfortable with the bill passing. Nonetheless, I do want to note that Senator Storer and his staff engaged with us on this matter in a considered, thoughtful and constructive manner.

Labor is sympathetic to some of the broader concerns that this measure and the intent of Senator Storer's amendment has raised—that is, what can be seen as a policy change as put forward just as an integrity measure. That does raise broader issues on how government and parliament address process issues around what defines an integrity measure. So, while we won't support the senator's amendment today, I think it's important to reflect on the broader issues that Senator Storer is addressing, and we thank him for his constructive approach.

Question negatived.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.

Senator SESELJA (Australian Capital Territory—Assistant Minister for Treasury and Finance) (13:22): I move:

That this bill be now read a third time.

Bill read a third time.

Senator BERNARDI (South Australia) (13:23): I seek leave to put a brief statement on the record.

The ACTING DEPUTY PRESIDENT ( Senator Sterle ): Leave is granted.

Senator BERNARDI: Regrettably I wanted to participate in the committee stage of the previous debate, on the Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018, but I was in the chair. I had some questions surrounding Senator Storer's amendment. I wasn't able to pursue them, but I just wanted to get it on the record that that was the reason for my lack of participation.

Senator CAMERON (New South Wales) (13:24): I rise to speak on the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. Labor has always been on the side of consumers. It was Labor that introduced the Trade Practices Act in 1974 and Labor that created the new Australian Consumer Law in 2010. It was a Labor federal government which, in negotiating the 2009 intergovernmental agreement on Australia's consumer protection arrangements—which preceded the Australian Consumer Law—built in a requirement that the new laws be reviewed within seven years. The Australian Consumer Law review was commissioned in 2015 and issued an interim report in December 2016, with its final report to federal, state and territory consumer affairs ministers submitted in March 2017. When these ministers met for their annual meeting in August 2017, they agreed on 15 recommendations for implementation, while referring a number of the other recommendations for further review, consultation or policy work.

Labor supports this bill because it clarifies, corrects and strengthens Australia's consumer protection and product safety regime. The measures in this bill have been agreed by state and territory consumer affairs ministers, consulted on extensively both through the review process and in an exposure draft, and are so uncontroversial as to be almost boring. But these measures do not fully implement all the provisions agreed by the government with the states. Of the 15 recommendations agreed to, 10½ are in this bill, one has been legislated in a previous bill, and two will presumably be enacted through regulations.

The measures in the bill are important, sensible and measured. They include provisions easing evidentiary requirements for private litigants through an expanded follow-on provision, enabling them to rely on admitted facts from earlier proceedings; amending the ACL and the ASIC Act to extend unconscionable conduct protections to publicly listed companies; amending the definition of 'unsolicited services' to allow the false billing provisions to apply to false bills for services not rendered; clarifying that the unsolicited selling provisions can apply to public places; enhancing price transparency in online shopping by requiring that any additional fees or charges associated with preselected options are included in the headline price; strengthening the Australian Competition and Consumer Commission powers to obtain information about product safety by broadening the power to apply to any person, including a consumer likely to have relevant information rather than just the supplier; enabling regulators to use existing investigate powers to better assess whether or not a term in a standard form contract may be unfair; and amending the ASIC Act to clarify that all ACL-related consumer protections that already apply to financial services also apply to financial products.

Three other proposals agreed by the federal, state and territory consumer affairs ministers have been or are expected to be implemented through other legislative vehicles. These include ACLR proposal 18, to increase maximum financial penalties available under the ACL. Labor took this policy, a tenfold increase in maximum penalties for anticonsumer conduct, to the last election, and we have been calling on the Turnbull and now Morrison government to implement it as a matter of urgency. We were pleased when the government announced that it would adopt Labor's policy in the 2017 budget. Legislation to implement the increased penalties was introduced into this house on 15 February this year.

While we welcome this progress, 1½ proposals agreed by federal, state and territory ministers remain outstanding. The second half of one proposal, relating to unsolicited selling, is nowhere to be seen, while another recommendation to strengthen product safety recalls was featured in the exposure draft but removed from this bill for reasons known only to the assistant minister. This includes an important reform contained in ACLR proposal 7 to clarify and strengthen voluntary recall requirements by introducing a statutory definition of 'voluntary recall' and increasing penalties for failure or refusal to notify a voluntary recall, proportionate with other ACL penalties. These proposals were included in the exposure draft of this bill; however, they have been excluded from the bill as presented to the parliament. The government has not told us why or what happened to it. We don't know if the government has abandoned the change, contrary to the agreement it struck with states and territories last year, or if, like so many other consumer reforms, it has just kicked it off into the long grass.

This is not unusual behaviour from this government. The coalition is yet to explain why it took six months for a compulsory recall of deadly Takata airbags, leaving millions of ticking timebombs on our roads. The potentially lethal airbags have been found to have misfiring inflators capable of firing shrapnel through a vehicle's cabin, risking life and limb of the driver and passengers. They can turn a minor accident into a fatal crash. Missing Takata airbags are believed to have killed over 20 people worldwide, including at least one Australian. The alpha airbags have been identified as particularly dangerous, with a failure rate of one in two compared to a failure rate of one in 400 for other Takata airbag models. As early as August 2017, the Australian Competition and Consumer Commission told the House Standing Committee on Economics that the risks associated with Takata alpha airbags were such that they must be replaced immediately. ACCC chairman Rod Sims also revealed that, as the Takata recall was voluntary at the time, there was little enforcement action they could take to ensure everything possible was being done to replace the airbags. The following day, Labor called for the then minister responsible for product safety, the current Deputy Prime Minister, to use his emergency powers under section 132J of the Competition and Consumer Act 2010 to issue an immediate, compulsory recall for Takata airbags. This was done amid growing concerns about the inadequacy of the voluntary recall process and the renewed urgency around the alpha-type airbags. Then what happened? It took another six months, until February 2018, for a compulsory recall to be issued. What was the then Minister McCormack waiting for?

Maybe those opposite don't want to change the law around recalls, because they would prefer to bury their heads in the sand when it comes to product safety for Australian consumers. This is emblematic of the government's half-hearted approach to improving Australia's consumer protections and its constant duckshoving of the portfolio between different frontbenchers. Those opposite make the right noises, rolling around consumer reforms that are already in train through reviews that Labor started, but in the end they always squib it. We have seen the government drag its feet with the payday lending reforms, we have seen it try to flummox consumers around measurement labelling and we have seen nothing but talk in relation to improving consumer protections for retirement home residents. Labor, on the other hand, will always work to improve outcomes for Australian consumers, with or without the government.

Senator PATRICK (South Australia) (13:34): I rise to contribute to the debate on the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. I wasn't planning to speak on this bill. However, I observed some quite thoughtful and considered filibustering, particularly from those in the coalition, on other bills this week, so I'm sure the public will be pleased to see such considered debate on legislation that has bipartisan support.

Centre Alliance supports this legislation, which makes a number of amendments to the law to clarify and strengthen consumer protections. I won't be going into any further details about the provisions of the bill, as that's been fairly well covered, but I do want to take the opportunity to speak about an issue that relates to consumer protection, specifically protection for consumers from monopolies.

Many of you would be aware that the ACCC recently approved CKI's takeover of the APA Group. Senator Molan stood up in the chamber the other night and made a considered and measured statement in a speech on the adjournment debate which represented some people within the coalition and sent a signal to others within his party—although I'm not in any way suggesting that is the position of the party. Senator Molan's contribution—unsurprisingly, noting that he's a former general—focused on the national security concerns with the project. I share his concerns, but noting he's already traversed that topic and it's not relevant to consumer law, I'll steer clear of this aspect and focus on competition.

I have to put it on the record that on 3 July this year I wrote to the then Treasurer, Mr Scott Morrison, requesting that he exercise his powers under the Foreign Acquisitions and Takeovers Act to prevent this takeover from occurring. On 12 September, I wrote to the current Treasurer, Mr Josh Frydenberg, setting out the same concerns and suggesting that on balance the takeover should not be allowed to proceed. APA Group own 15,000 kilometres of gas pipelines across Australia that keep gas-fired power stations running, keep large gas-energy users in operation and provide domestic customers with gas. In the 2016 ACCC east coast gas market report, the ACCC indicated that there was 'evidence that a large number of existing pipelines have been engaging in monopoly pricing'. The ACCC did not name APA Group, but it is clear that they are the dominant gas player in the east coast market.

Switching to a recent electricity report, we note that in the ACCC's 2018 retail electricity pricing inquiry report the ACCC made a recommendation on the need for constraints on some further consolidation on generation ownership, given the existing levels of concentration in the market. They went so far as to recommend constriction on further concentrations beyond certain levels and mechanisms to force divestiture of assets or market share in particular circumstances.

There's a considerable economic concern for consumers in respect of APA's current east coast gas pipeline monopoly status. East coast businesses and consumers have only just finished experiencing the tops of gas prices, but they are still way too high. We certainly don't need any sort of reversal in our gas price fortunes. If this deal went ahead, particularly giving it reference to my constituents back in South Australia, we would see CKI in charge of 95 per cent of SA's electricity transmission arrangements—its wires, because they also own SA's power networks—and 85 per cent of its gas transmission infrastructure. The Grattan Institute's energy expert, Tony Wood, was quoted in the Australian Financial Review on 15 June as saying, 'You add APA to CKI and you get the mother of all gas monopolies; it will sit like a gorilla across the Australian landscape.' I note that he did go on to say, 'That doesn't necessarily mean that it shouldn't be approved, but it will be the ultimate test of our regulatory model.'

As we 're adjusting these laws, I want to suggest that the current regulatory framework also needs strengthening in other areas. Unfortunately, because of the way the law is defined, the ACCC was not able to recommend against the takeover because it was not creating a monopoly, simply preserving one. In my view, that's not good enough. Australia has many concentrated markets that are dominated by a few very big businesses, and our current competition law exists to prevent anticompetitive behaviour and misuse of market power. However, the ACCC is powerless to act if the transaction doesn't change the composition landscape.

We need to concentrate on the end state here. The consumer laws are designed to protect us against monopoly situations. We do not let companies merge to get to a monopoly situation. Once again, that is recognition that the end state is a bad place. So we shouldn't also let a circumstance develop where, in this case, a foreign entity, but perhaps even a domestic entity, is permitted to buy into a monopoly where the end state already exists. Perhaps there's a way of, in some sense, regulating against monopoly status by making sure boards understand that if they get to a point where they do have that monopoly status, there is a risk that when they sell the company the ACCC will order it to be broken up in some way. In some sense the CKI model does that, because the ACCC said to them, 'You simply cannot conduct this takeover if you retain existing pipelines in Western Australia,' because that would have increased the monopoly status. I would like to bring that to the attention of the chamber. When we're considering consumer laws, we act to protect consumers—that's the responsible thing to do. We need to think about how we protect from the end state of a monopoly supplier.

Senator PATERSON (Victoria) (13:41): I'm delighted to rise to assist the Senate in its careful consideration of the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. I was listening carefully to the contribution made earlier by Senator Cameron. He said that this bill was so uncontroversial as to almost make it boring. I have two observations to share about that. Firstly, I would say that, clearly, Senator Cameron is his own harshest critic, because I didn't find his contribution to be boring at all. In fact, I thought it was a very good contribution. I would encourage him to be less harsh on himself in the future. Secondly, I say to Senator Cameron: challenge accepted. I hope in my contribution to this debate I'm able to maintain his and other senators' interest in this important piece of legislation.

One thing which I thought might be helpful in the consideration of this bill is to go through the key schedules in the bill. Schedule 1 is the admissions of fact, which relates to proposal No. 17 in the ACL review. This measure amends the Australian Consumer Law to ease evidentiary requirements for litigants through expanded follow-on provisions, enabling litigants to rely on admitted facts from earlier proceedings. This change addresses some of the difficulties that consumers and small businesses face when taking court action against traders under the Australian Consumer Law after the ACCC has already established a breach of law through the courts. Currently, what happens is that findings of fact made by a court in certain proceedings against a person may be used in certain other proceedings against that person under the ACL. This measure extends these existing follow-on provisions so that private litigants will now also be able to rely on admissions of fact made by the respondent in earlier proceedings as well as findings of fact.

An admission of fact brought across using this mechanism is not treated as conclusive proof in the new proceedings. It is prima facie evidence, which means that the respondent still has the opportunity to present evidence to rebut it. The measure will give consumers a better chance at successfully pursuing their rights against traders in court. The change will promote consistency with similar follow-on provisions in the competition law.

Turning now to schedule 2 of the bill, it's the listed public companies section of the bill, which relates to proposal No. 9 from the ACL review. The measure extends the unconscionable conduct provisions in the ACL and in the Australian Securities and Investments Commission Act 2001 to include publicly listed companies. The existing exclusion of publicly listed companies sought to confine the unconscionable conduct protections to those traders likely to lack the size and bargaining power to protect their interests. Public listing was seen as a reasonable indicator of a trader's size and ability to protect its own interests. However, public listing is not necessarily a reflection of a trader's size, level of resourcing or its ability to withstand unconscionable conduct. Where there is a significant imbalance in bargaining power, a publicly listed company could find itself subjected to conduct that is unconscionable. The unconscionable conduct provisions already protect some privately operated companies that may be, in fact, larger or better resourced than some publicly listed companies. Whether conduct is considered unconscionable will continue to be influenced by the relationship between the parties and the complainant's ability to protect their interests. The amendments improve both the clarity and the generic application of the unconscionable conduct protections by ensuring that they apply equally to all traders and support the ACL's objective of fostering effective competition and fair trading.

Schedule 3 of the bill is the unsolicited supplies part of the bill. This relates to the technical amendment A as proposed in the ACL review. This measure is a technical amendment to ensure a trader cannot demand payment for an unsolicited service that a consumer never asked for and never received. The ACL prohibits a trader from demanding payment for a service that the consumer never asked for. This is known as the false billing provision. However, the current interpretation of the false billing provision has made it difficult to enforce against suppliers of unrequested and unsupplied services, even where the supplier has falsely claimed they did actually supply the service. This measure helps to directly remedy this issue. For example, this has been a problem in the context of internet domain name services. Notices have been issued by resellers of registered domain names to traders with registered domain names asking for payment of a fee for renewal of that domain name when, in fact, it was for a variation on that domain name.

Schedule 4 of the bill relates to the unsolicited consumer agreements. That's relevant to proposal 12 in the ACL review. The ACL gives consumers certain rights when they enter an unsolicited consumer agreement. A typical example of this is door-to-door selling. This measure clarifies that those rights also apply where such an agreement is made in a public place. An unsolicited consumer agreement is an agreement which is the result of negotiations between a consumer and a dealer at a place other than the supplier's place of business. Certain other conditions need to be met, including that the consumer did not invite the dealer to come to that place. This is important because a consumer who enters an unsolicited consumer agreement gets certain rights, including a cooling off period of 10 business days, within which they can cancel their agreement. The original intention behind the unsolicited consumer agreement provisions was that public places would be covered. Nevertheless, there still has been some confusion about whether this is the case. This measure will stop that confusion. A consumer can be just as vulnerable in a public place as they are in their home or their workplace. They face the same risk of being subjected to high-pressure sales tactics and the transaction can be just as unexpected.

I now turn to schedule 5, the pricing schedule, which is proposal No. 13 from the ACL review. This measure amends the ACL to enhance price transparency by requiring that any additional fees or charges associated with preselected options are included in the headline price. This ensures that consumers are made aware from the start of the online payment process of the total possible amount they would pay if they do not opt out of the preselected options. Especially online, many traders preselect options attached to a consumer's purchase and it is up to the consumer to then deselect them before the end of the transaction if they do not want to take up these options. This has the potential to mislead consumers when they are unaware of the preselected options and do not have an adequate opportunity to opt out before proceeding to the payment. However, preselected options can be a legitimate business practice when they are not presented in a misleading manner, and this measure does not propose to interfere with that. For example, some businesses specifically offer and advertise bundled goods or services that include preselected options for the buyer's convenience. What this measure does is ensure that prices are transparent so that consumers are not tricked or surprised by hidden charges where traders preselect options on a transaction.

The next schedule, schedule 6, which is the disclosure notices relating to the safety of goods and services, relates to proposal 8 from the ACL review. This measure amends the ACL to strengthen the Australian Competition and Consumer Commission's powers to obtain product safety information by broadening the power to apply to any person, including consumers, likely to have relevant information, rather than only to the supplier. Currently, the Commonwealth minister, or an ACCC-appointed inspector, has the power to issue disclosure notices to obtain information about the safety of goods or services. However, these notices can only be issued to suppliers. Under current arrangements, the ACCC can only receive this information from third parties voluntarily. This may not always be possible or, indeed, appropriate, particularly where the third party may be subject to legal or confidentiality restrictions.

This measure broadens this power so that the minister or inspector may give disclosure notice to a third party if the minister or inspector has reason to believe that the third party is capable of giving information, producing documents or giving evidence in relation to the safety of the consumer good or product related service in question. The kinds of third parties from which the minister or inspector might require information include other traders; test laboratories; safety consultants; consumers who have purchased or have been injured by a hazardous product; or another person injured by a hazardous product. This amendment will help regulators respond to product safety issues in a more timely manner. It will also promote consistency with existing information-gathering powers for other ACL provisions.

Schedule 7 is the power to obtain information documents and evidence section, and it relates to proposal 11 from the ACL review. This measure amends the ACL and the ASIC Act to enable regulators to use their existing investigative powers to better assess whether or not a contract term is unfair. This will give the ACCC and ASIC the power they need to address the repeated or widespread use of unfair contract terms. Currently, the ACCC and ASIC are restricted in their ability to investigate compliance and take enforcement action with respect to unfair contract terms. This is because their investigative powers are triggered by contraventions, or possible contraventions, of the law. While the ACL provides a mechanism to void unfair contract terms in standard formal contracts, their use is not prohibited by the law. Therefore there are no contraventions or possible contraventions in relation to unfair contract terms.

Schedule 8 of the bill is the non-punitive orders schedule, and this relates to proposal 19 in the ACL review. This measure clarifies that a court may issue a community service order requiring a person in breach of the ACL to engage a third party at that person's expense to perform the service required in the order. A court may consider using the option when the person is in breach, is not qualified or trusted to carry out the community service itself. For example, a court could use this arrangement where a trader's conduct shows blatant disregard for the law, a trader has a history of mistreating consumers or it is evident that a trader clearly does not understand their legal obligations. An example of the type of community service order that might be made is the provision of financial counselling to consumers. Where a trader has used financial harm to low-income or vulnerable consumers, it may not be appropriate for that trader to provide such counselling. But it may be a very good outcome for the trader to engage a third party to provide the counselling. This is the kind of arrangement that this measure facilitates. This amendment will allow regulators to seek community services orders as a remedy to a breach in more circumstances because they no longer will have to rely on that trader to carry out the order but instead can now rely on a qualified third party.

Schedule 9 of the bill guarantees the supply of services, and this relates to proposal 5 in the ACL review. This measure amends the ACL to clarify the scope of an existing exemption from the consumer guarantees regime for the transport or storage of goods where those goods are damaged or lost in transit. The measure clarifies that the exemption only applies where both the consigner and the consignee are a business. The rationale behind the exemption is that, if the buyer or intended recipient of the good being transported or stored is a business, an exemption for the shipper or transporter is appropriate because the commercial buyer should have insurance or other contractual protections. This rationale does not generally hold true when the recipient is a consumer. This measure will ensure that consumers do not bear the full risk in circumstances where they have no control over the shipper or transporter. It will also ensure that consumers are clearly able to seek remedy directly from the shipper rather than relying on traders to raise issues with the shipper.

Schedule 10 is the consumer protection schedule of the bill, and relates to technical amendment B in the ACL review. The ASIC Act contains consumer protections for financial services which mirror a number of provisions in the ACL. These mirror provisions largely use imported language from the ACL. This means that, at times, the language is inconsistent with that used more generally in the ASIC Act, and may also unintentionally limit the application of certain provisions. This measure is a technical amendment to correct inconsistent terminology in the ASIC Act for financial products that involve interests in land that could unintentionally limit their application.

Schedule 11 of the bill is the consumer protections schedule in relation to financial products, and relates to proposal 16 in the ACL review. Senators will be pleased to know that it's the final schedule. This measure amends the ASIC Act to clarify that consumer protections that already apply to financial services also apply to financial products. This measure is designed to address a source of unnecessary uncertainty. The current provisions explicitly cover financial services and indirectly apply to conduct related to financial products. This is because 'financial services' has a broad definition. However, the absence of an express reference to financial products creates uncertainty. Explicitly covering financial products is also consistent with ASIC's existing approach to compliance and enforcement.

I'd like to take the opportunity to thank the opposition for their indication that they will be supporting these important measures in this bill, and to also thank Senator Patrick, who spoke on behalf of Centre Alliance, for indicating his support for the bill. I commend the bill to the Senate.

Senator STOKER (Queensland) (13:57): I rise to speak in support of the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018. This bill is a measure to clarify and strengthen consumer protections relating to consumer guarantees, unsolicited consumer agreements, product safety, false billing, unconscionable conduct, pricing and unfair contract terms.

The protection of consumers is a critical role for government. The recently debated legislation to protect the strawberry industry—I'm sure we'll see more of that today—and the safety of consumers is another demonstration of how important consumer protection is. The fact that the government has moved so quickly on that issue is demonstration of the high value it places on consumers being able to trust that which they buy in the market.

The Australian Consumer Law commenced operation as Australia's first nationwide consumer protection law in 2011, replacing provisions in 20 Commonwealth, state and territory laws on consumer protection and fair trading with a single national law. This means that, for the first time, consumers will have the same rights no matter where they live in Australia. The Australian Consumer Law, which we already have some familiarity with, includes: a national unfair contract terms law, covering standard form consumer and small business contracts; a national law guaranteeing consumer rights when buying consumer goods and services; a national product safety law and enforcement system; a national law for unsolicited consumer agreements, covering door-to-door sales and telephone sales; simple national rules for lay-by agreements; and penalties, enforcement powers and consumer redress options for when things go wrong.

This has been an important micro-economic reform that has provided quite substantial benefits to all Australians. A national and consistent approach to consumer law and policy enables all Australian consumers to enjoy the benefits of consistent rights wherever they may be, and allows all Australian businesses to obtain some efficiencies through a single and simplified national law. This makes things easier for all Australians, whether they be consumers or in business.

Well-informed, confident consumers are a vital element of a strong and vibrant economy. The introduction of the Australian Consumer Law has been good for both consumers and businesses. Consumers are more empowered, business compliance costs have reduced and there are fewer disputes. This is because having one national Australian Consumer Law means that we have cut down on red tape. For example, before the Australian Consumer Law, businesses operating in more than one state or territory had to comply with different laws, wasting time and money and creating confusion.

The PRESIDENT: Order! Senator Stoker, you will be in continuation upon resumption of debate. It being two o'clock we will move to questions without notice.