Cosgrove Clayton: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeCosgrove Clayton: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In Committee[Sitting date: 01 December 2015. Volume:710;Page:8451. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour): I want to pick up on Mr Robertson’s point but I just want to express some disappointment. This is a Supplementary Order Paper. Let us be very clear about it. In February of this year—on 26 February—the Government introduced the legislation. The process is that it goes before the Finance and Expenditure Committee. It was referred to the select committee on 11 March. The closing date for submissions was 30 April. The committee received the submissions heard them and the bill came back to the House. Throughout that whole period this particular issue relating to GST and bodies corporate was never raised with the committee by officials was never raised by Government members and we were never written to by the Minister of Revenue asking us to deal with this. The bill came to the House and I think it was 19 October when in a speech that I and other colleagues made we raised it with the Minister.That was the first time this issue was raised and we provided actually quite a detailed explanation as to the potential impact on small businesses if this hole was not plugged if the issue was not dealt with. It took the Minister then over a month on 17 November to get back to us. His opening line to me in his letter is: “I refer to your letter of 20 October 2015 and the matters you raised in your speech.”—blah blah blah—“I acknowledge your concerns about the historical uncertainties surrounding GST treatment of unit title bodies corporate. I agree that it is desirable to provide greater certainty to GST-registered persons and businesses that tax positions taken during this time will not be routed.” The bill was introduced in February after a whole series of departmental reports and research and papers to Cabinet what have you—that was February. It took him until 17 November when the scales fell from his eyes to actually realise that this was a problem and to do something about it.Hon Damien O’Connor: That was quick for him.Hon CLAYTON COSGROVE: That was quick yeah.My question is this: how on earth—I say to the Minister in the chair and forgive me the Minister in the chair is not the portfolio Minister but represents the portfolio Minister none the less and I am surprised that the portfolio Minister has not taken a call. He has not taken a call I think on these pieces of legislation at any stage this evening. This was a monumental stuff-up—a monumental stuff-up that would have cost small businesses goodness knows how many hundreds of thousands of dollars or millions of dollars across the board. We do not know. What I would like to know from the Minister because it goes to looking at future tax bills is what confidence do we have that there will not be another hole in another piece of legislation which maybe Opposition members do not pick up on to dig the Government out of the mire and it goes through? An explanation I think is warranted because it goes to the credibility and integrity of the Minister of Revenue and via the Minister of Revenue to the Inland Revenue Department itself.Why was this missed? Was it known about? The advice I have from industry is that it was known about for quite a length of time but nothing was done. If nothing was done was that because officials were negligent? Was that because the Minister knew about it and did not clear the paper on his desk between February of this year and 17 November? Did he not bother about it? Did he not care about it? Did he not think it was a big issue? Well he did think it was a big issue when it was raised in this House and I suspect he went back and went: “Oops we’ve got a major problem.” Why did it take a month to correct? Why was the Finance and Expenditure Committee not informed of this as we examined the bill? Because this is not just a small Supplementary Order Paper; this is a major one.As to Mr Robertson’s point it is fanciful that an arbitrary date of the date of introduction was proposed as the mechanism in the Minister’s Supplementary Order Paper. He does not give any explanation for why. He just says: “Well date of introduction so what?”. He does not acknowledge that there will be those who will be impacted by this in terms of being double taxed under GST and denied refunds unless we adopt the date that I have proposed which is 1 April 2016. If it is agreed that people are going to be double taxed under GST and denied refunds could a Government member—or maybe the chair of the select committee Mr Bennett who was running the show—tell us whether they are in agreement with that? Are they happy that that inequity will exist? Are they happy that people will be double taxed under GST? This is the party that purports to support small business.Is the Minister happy with that inequity? Is the Minister going to propose any other amendments to remedy it? We have done most of the work for him; it would be good if he took this point on. Perhaps the Minister in the chair could turn to the officials and ask them that question because there is no explanation as to why the date of introduction was chosen apart from you know finger in the ear. Maybe the Minister tossed a coin rolled a few dice or I do not know watched two flies run up a wall—Grant Robertson: Lotto numbers.Hon CLAYTON COSGROVE: —lotto numbers horoscope who knows? But this is a very serious issue because small businesses and others in this situation will be double taxed in respect of GST and will be denied refunds. If the Government is just happy to sit there and go “Tough” well that is OK; that is now on record. But I do not see any of the three—I think there are two members of the Finance and Expenditure Committee here. There is Mr Bennett the chair. No Minister—no Minister—has taken a call to answer any of these questions. It is bad law it is extremely bad process and it is extremely bad for the credibility and integrity of the Inland Revenue Department which I have got to say has generally been pretty good—up until a few recent incidents over the last Parliament—in terms of advice. But the Finance and Expenditure Committee got zero advice on this.Were the officials told by the Minister to provide no advice on this issue? There is a question that could be answered. Why was it missed? Why was it missed through the Cabinet process? Why was it missed through the Finance and Expenditure Committee in terms of advice? Why when it came back into this House from the Finance and Expenditure Committee and we were examining it did the Minister of his own volition not put a Supplementary Order Paper in to correct it? Why did it take a letter from me and pressure from Opposition members to get this thing corrected? There is not politics in this. This is an issue about the quality of advice the accountability of Ministers and whether Ministers are up to it—whether they are actually up to it whether they are reading the papers whether they are asking the questions. I am also advised that members of industry canvassed this issue with officials with the department and with the Minister and nothing was done not a thing—not a thing. Thousands of small businesses could be just thrown on the heap and impacted in respect of the GST.Well the Minister has provided a partial solution but it appears that the Government is still prepared to have people double taxed under GST and denied refunds simply because it plucked a date of February 2015 out of its head and put it in this legislation saying: “That’s the drop-dead date.” Could the Minister advise us as she is writing down the list of questions as to why that is fair why that is equitable? Is she prepared to revisit this issue and change those dates? If the Minister is not could she advise us as to why? If she feels it is equitable to have people double taxed and refunds denied could she provide us with an explanation? Could Mr McClay the revenue Minister who is probably hiding under a desk obviously because he has not taken a call on this—he is hiding under the desk or under the Table or somewhere I do not know. He has gone down a burrow somewhere around this Chamber. I would have thought given that he missed it—he did not punch the ticket—that he would actually be taking a call and explaining this. The courts of course do look at these debates if there is court action around this. They do actually look at these debates in terms of their evidential value.But it is arrogant for a Minister to say “This is what I want to do. I know there is an inequity inherently in this. I know people will be double taxed under GST.” I wonder whether Mr Scott the vintner down the back—who normally gets up and has a crack at us and says we are out of touch with small businesses we do not know what we are talking about and it is all nanny State and PC—is going to get up and tell us whether he is happy with people being double taxed under GST and businesses being denied their refunds. Oh there is silence—silence—silence from all those members over there even the one in the middle. There is silence. They are prepared to do this. They are prepared to see this inequity slide through. It will be interesting to see what the one in the middle does when he goes back to his constituents—whether he goes down a burrow in the electorate when people front up and say: “Hang on. Why I am being dealt to? Why for the guy down the road is it OK for them? They get treated fairly. But because of a date that that member’s party plucked out of nowhere I’m double taxed and I’m denied my refunds.”I wonder what Mr Scott’s explanation will be to small businesses. Will he be able to say: “Well here’s an explanation from the Minister.”? No because the Minister will not answer any questions. Maybe the member can. Maybe he can whip down the burrow follow the Minister down there and change his mind.