Tax reform needed to deliver better outcomes for regional Australia
Posted February 25, 2016
CATHY McGOWAN (Indi) (18:11): Tax has been the hot topic of conversation around the barbecues of north-east Victoria this summer. Tax—how it is raised, how it is spent and what the government does with it. It is time to get honest about tax and tax reform, and to get honest about the need for regional Australia to be included in any conversation about tax. Tonight I call on the government, the Prime Minister and the Treasurer to stay the course and to give us, the people of rural and regional Australia, the information we need about tax reform.
In March 2015, I tabled in this place my private member's bill, The Charter of Budget Honesty Amendment (Regional Australia Statements) Bill 2015. This bill called on the government to ensure that regional impact statements are prepared and accompany every budget, every year. This amendment bill addresses my election commitment to stand up for people who live in regional Australia; people who already pay their fair share of tax and have a vested interest in how this tax spent. Many feel they are disadvantaged, because of a lack of taxpayer money invested in regional public transport, regional mobile phone coverage, regional internet, regional innovative employment creation and regional educational opportunities.
The topic of tax and how it is spent goes to the very heart of regional living. The main purpose of the bill was to ensure that the framework for the conduct of government budgetary policy—which includes obligations on the government to provide regular financial reporting—should include regional Australia statements. These statements would be publicly released with each Mid-Year Economic and Fiscal Outlook report, as well as with the budget. The central pillar of my charter of budget honesty amendment bill is for people who live in rural and regional Australia to have the information to allow them to make an assessment of the impact of government policy decisions on regional Australia.
Such statements would acknowledge, and account for, the impact government decisions have on regional Australia. They would help improve the knowledge and understanding of the impact of fiscal and budgetary measures upon regional communities. This amendment would keep the government honest about the tax revenue coming in from regional Australia, and about reporting where the expenditure is going and the degree to which it benefits people, families, businesses and farmers in regional Australia. It is important to stress here that when I refer to 'rural and regional' I am not only referring to farming or agriculture; I am also referring to the over 80,000 of my constituents who live in rural towns and small villages.
Including these statements is not a new idea. It is my understanding that they have been a feature of every budget since 1996-97—except for 2006-07—until 2013-14. They need to be returned, because they have been missed and they are needed.
There is strong community consensus, in rural and regional north-east Victoria, around the broad framework and the justification of taxation. There is a strong understanding and recognition of the government's role and responsibility to collect and redistribute tax based around an agreed set of values and behaviours and, every three years, an opportunity for the people to elect the party whose policies are generally considered in line with the community's values and expectations.
As people gathered around barbecues on glorious summer evenings this year, they talked about the ramifications of an increase in the GST to health services, food and education. They talked of the need for fairness in the tax system and the sense of unease when the big companies, the multinationals, are seen to not be paying their fair share. They talked of housing prices and wondered whether negative gearing was having a negative impact on the housing market. They talked about superannuation and shared stories of people they knew who did not have enough and how hard things would be if you could not get a pension and had to work till you were 70 or were a self-funded retiree. They also talked about others who had very profitable schemes and could live very comfortably, thank you, on the interest gained from these investments. Surely they could afford to pay tax on those earnings, they asked.
The conversations also skirted around the role of government in delivering appropriate goods and services and if people would be prepared to pay more tax if that meant better services, better access to higher education, improved infrastructure, particularly trains, and telecommunications, mobile phones and internet. And no barbecue is ever complete without stories of government waste, poor decision making and frustration at poor administration. No-one wanted more of that. There was a belief that considered and productive reform is needed of our tax system. We need better outcomes. We do not just need to raise more tax to spend more money; we need outcome based taxation.
Against a background of general chatter, I have to say there is a level of discord—things are not going well, from the people's perspective—about tax, and the general belief is that reform is well and truly overdue. There is an interest—and from many people it is an eager interest—in improvement in the taxation system and the distribution of tax. There is also an interest in the process of policymaking. How about a green paper, a white paper, policy then budget? Processes would result in a fairer tax system, better targeted support and a government focusing on its core business, with particular focus on facilitating infrastructure, transport, telecommunications, education, defence, trade and managing foreign affairs as well as maintaining a fair social welfare safety net.
There is so much that needs to be done in rural Australia, so many areas where people experience disadvantage. This leads them to a belief that the taxation system is not working for them, that it is not fair. That is why the private member's bill calling for an amendment to the Charter of Budget Honesty Act by including regional statements is so important. It would provide the facts. It would give the evidence and ensure that policy is based on data. These facts would give us the information which would allow the assessment of the likely economic, social, cultural and environmental impacts on regional Australia of key government initiatives and of the progress made in implementing key government initiatives. These statements would tell us what impact is being had, what outcomes are being reached and whether we are successfully addressing the problems that we have identified.
The legislation calls for regional statements to have regard to the economic drivers of regional communities and the disproportionate effect that government initiatives may have in regional communities due to a lack of infrastructure, including, particularly, mobile phone coverage and internet connection; a lack of access to public transport; and a lack of access to government services due to cost and long travel distances and times. There is also the effect that lack of competition in regional communities has on the cost of living and, particularly, doing business in regional communities, and the cost and difficulty involved in complying with regulatory requirements for people and business.
There is one particular topic that I would like to bring to the attention of the House. The Family Assistance Legislation Amendment (Jobs for Families Child Care Package) Bill 2015 is before the House at the moment, and this morning we had Deloitte Access Economics give us the results of their analysis of the impact of this bill, particularly on rural and regional Australia. The impact is just enormous, but to me it seems just so wrong that we should have a private enterprise consultancy business doing this study. It should come out of the Department of Education and Training. The department are putting this bill up. They should be responsible for making sure that the negative impacts and the positive impacts on rural and regional people are noted and that people understand that it is going to have a huge negative impact on us.
In bringing this to a conclusion, I have to say that in 2015 the government did not ignore that bill. In the 2015-16 budget papers, there was a most welcome addition—the 'blue book', Partnership for Regional Growth. This blue book was a joint statement by the Hon. Warren Truss, Deputy PM, Minister for Infrastructure and Regional Development, and the Hon. Jamie Briggs, at that time Assistant Minister for Infrastructure and Regional Development. This blue book provides an overview of current and new initiatives, under the topics of Agriculture, Attorney-General's, Defence, Education and Training, Employment, Environment, Foreign Affairs and Trade, Health, Human Services, Immigration and Border Protection, Industry and Science, Infrastructure and Regional Development, PM&C, Social Services, Treasury and Veterans' Affairs. It is a great description of programs that are operating.
But, sadly, this blue book does not do what was really asked of it. What is missing? There is no detail of budget initiatives, no impact statements or analysis of the economic drivers of regional communities and the disproportionate effect that government initiatives have in regional communities due to a lack of infrastructure and associated problems. There is no mention of our ability to grow business. There is no mention of the impacts that we are trying to have. There is no mention of outcomes. There is no mention of whether we have had success. All there is is a description, then 'Here's the money,' and no accounting at all about what we want done with it.
There is an opportunity now, as we prepare for the next budget, for the Prime Minister, the Treasurer, the new leadership in the National Party and the relevant ministers to revisit the content of the blue book to review its contents and its relevance in time for the budget. To do so would be a wonderful thing.
It could ensure that as a community, as we gather around our fires in late autumn and winter, as we are discussing tax and tax reform, we look at how our hard earned money—our taxes—is being used to build our communities, to bring prosperity, to bring opportunity for all and how our taxpayer money and government initiatives are changing and making a difference and we have some form of accountability for the outcomes that we want.
In closing, my call to the Prime Minister and Treasurer is to stay the course on tax reform and to put in an overlay for rural and regional Australia, across all the proposals, and then communicate the benefits, the opportunities and the costs to the one-third of the population who live outside our capital cities.