Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018
House of Representatives, 30 May 2018
Watch Matt's Speech
As we look at the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018, which is about a crackdown on the black economy, what's at the heart of this? The government has worked out that, by cracking down on the black economy in Australia, it is able to skerrick together sufficient funds to almost bring its budget back into surplus. The Liberal government has worked out that by cracking down on the black economy, as well as tax avoidance and concessions, it should be able to bring its budget back into surplus—just—by 2019. That's because a significant portion of what's planned for this surplus will come out of the funding that the government believes it will get in revenue from this legislation.
Now, to be clear, the black economy in Australia is significant, it is complex and it is a growing economic and therefore also social problem. It is manifestly unfair to allow some to play by their own rules while penalising business, employees and customers who do the right thing in order to make sure that we can fund essential government services. Hiding under the black economy, workers can be exploited, criminal groups can flourish, and social capital and trusts are undermined. This task force that the government seeks to establish through these rules and laws will focus on minimising tax avoidance and on money launderers, while the illicit tobacco task force that has been created will investigate, prosecute and dismantle organised crime groups operating in the illicit tobacco industry.
In fact, through this process, the government has said in its budget that it will be providing additional funding to the ATO, Border Force and the Commonwealth Director of Public Prosecutions to pursue making sure that these revenues do come to government and those who are breaking the law do feel the full weight of the law. It's anticipated that many millions of dollars will come into the budget through revenue through these measures. As the Minister for Revenue and Financial Services has said, the illicit tobacco market is dominated by organised crime groups that use tobacco profits to fund their other criminal and black economy activities. The minister said:
These strong new measures will shut down the avenues that organised crime syndicates have to access illicit tobacco to fund criminal activity.
This is the fifth year of this Liberal government. It's better late than never, I guess, that they focus on this. But maybe there are some bigger, or at least other, eggs that also need to be fried.
Currently, the government is working with the banks to provide them with a $17 billion tax handout as part of its budget, whilst also defending—as part of this budget—its cuts to ASIC, which is the law enforcement body that should be tasked with holding the banks to account. That's not all, because the government has also reduced funding to the AFP and the Commonwealth Director of Public Prosecutions. Not only was this government dragged kicking and screaming to hold a royal commission into the banks; it's now rewarding those that have been the subject of this financial misconduct—those that have been creating it and that it is having a royal commission into—by making sure that they will be the biggest recipients of its corporate tax cuts. But, at the same time, this government is also ripping tens of millions of dollars away from the Commonwealth agencies, such as ASIC, that should be policing the banks. The government is taking millions of dollars off the Director of Public Prosecutions, which should be enforcing the law against the banks and against those whose misconduct has been revealed by the banking royal commission.
Then we find that the Serious Financial Crime Taskforce is not funded beyond the current year. So there is no funding in the budget in the forward estimates. The government tries to say that it will continue with this task force, but it hasn't actually allocated it any dollars. The Commonwealth Director of Public Prosecutions has revealed that there is no assurance that the funding for the Serious Financial Crime Taskforce will continue beyond June 2019.
This government needs to get its priorities right. It has funding to deal with a black economy but not to deal with the banks and the financial misconduct that has been revealed by the banking royal commission. It has specific funding line items in its budget for these very laws; yet—while we have a royal commission going on into the misconduct in banking and a Treasurer who has gone out in front of the media to say, 'We will throw the book at the people that have been responsible for this misconduct'—when we actually look into the budget, we see that the funding for the very agencies that should be doing that work has been cut! There's no special funding for them. If the government wanted to be taken seriously and show that it had some bite to go with its bark then it would also fund those bodies to follow up on the banking royal commission—just as it has, rightly, to make sure that this legislation is properly enforced as well. ASIC has been asking for five years for tougher penalties for this misconduct, and yet the government has done nothing.
And still it is doing nothing, but it is at least turning its mind to the black economy. So we've had nada when it comes to looking at financial misconduct and making sure that there's bite, but we are looking at the black economy. I guess it's a start, as I say.
But then look at this. We're going to make sure that those who are responsible for importing illicit tobacco face jail penalties. But what if you've ripped off your banking customers? What do you get? You just rock up at ASIC and enter into an enforceable undertaking for a nice little slap on the wrist—a few million dollars sent off to a charity, quite possibly tax deductible—and then you turn around and you keep going. Where's the penalty? Where's the enforcement? Where's the looking at what's happening to your financial services licence, as has been revealed by the ABC today? Effectively, ASIC says, nothing will happen to you.
We, on this side, have a different approach. Labor has committed $25 million to a special task force inside the Commonwealth Director of Public Prosecutions to pursue those who are found, through this banking royal commission, to have acted improperly. Only Labor will continue to work to ensure that the royal commission delivers justice to those who have suffered from the misconduct in the banking and financial services sector, and, importantly, that those who have been responsible are actually held to account for their actions, because it is only through that that we will see the cultural change that is fundamentally needed in our financial services sector.
Meanwhile, this government has worked out, it reckons, that it can cook up enough money out of pursuing the black economy to bring its budget back into a small surplus through the course of this budget. But, at the same time, it's going to hand over $17 billion in tax cuts to those big banks and $80 billion in corporate tax cuts overall.
Labor supports the proposals to reduce the amount of untaxed tobacco being smoked in Australia, to make sure that we're cracking down on the black economy. We recognise that unlicensed production and manufacturing of tobacco products not only significantly deprives the community of tax revenue but also puts Australians at risk. The measures to minimise tax avoidance will help ensure that businesses and employees and those people in Australia that are doing the right thing get the benefits.
But those in the Turnbull government do not have their priorities straight. They have allocated funds to help big business, through tax cuts, and they're helping their mates in the big banks by running a protection racket. Even when they finally concede we need a royal commission, they de-fund the agencies that will actually hold them to account.
In the scheme of things, these measures will not ensure that we're supporting low- and middle-income taxpayers and workers in Australia. They are a start, but they are a distraction from the main game. We need to do this, but we need to do so much more. Only appropriate regulation of the banks and our financial services, and funding for the authorities that will hold them to account, will ensure that businesses and employees that are doing the right thing benefit, and that they are contributing to the long-term and economic sustainability of our nation. Alas, this government appears completely incapable of delivering on such a mandate.