Second Reading SpeechArthur Sinodinos (Liberal Party, Assistant Treasurer)
This Bill repeals the Tax Bonus for Working Australians Act (No. 2) 2009 ('Tax Bonus Act') to ensure that the Commissioner of Taxation does not make any further tax bonus payments, which are more commonly known as the '$900 stimulus cheques'.
The Government made a commitment to end this waste during the 2013 Federal Election, and this repeal Bill delivers on that commitment.
Tax bonuses were paid to Australian residents who paid tax in the 2007-08 income year and who met certain income tests.
The payments were designed to provide stimulus to the Australian economy at the height of the Global Financial Crisis ('GFC').
Eligible taxpayers received $900 where their taxable income was up to $80,000; $600 where their taxable income was over
$80,000 but less than $90,000; or $250 where their taxable income was over $90,000 but less than$100,000.
Most payments were made in 2009, but a number of payments have continued to be made because of either the late banking of cheques, or the issuing of an amended assessment for the 2007-08 income year.
In fact more than 480,000 payments totalling more than $400 million were made over the financial years following the original payment of stimulus cheques between July 2009 and the present, when we are now some four and a half years on from the GFC.
This includes the fact that last financial year (the 2012-13 financial year) in which more than 15,000 cheques were issued totalling around $13 million of borrowed money.
If it wasn't bad enough that the Government was borrowing money to pay for $900 stimulus cheques four years on after the height of the Global Financial Crisis, it is worse that these stimulus payments continue to be sent to taxpayers living overseas.
Since its introduction, more than 16, 000 stimulus payments have been sent directly to taxpayers living overseas, totalling around $14 million of borrowed money, all supposedly to provide stimulus to the domestic Australian economy.
Over 1,000 of these stimulus payments worth nearly $1 million have walked out the door in the four years since July 2009.
Worse still is the fact that stimulus cheques have been, and are still being made out to those who are deceased.
Since the introduction of the stimulus cheques more than 21,000 payments have been made to deceased taxpayers, totalling more than $18 million of borrowed taxpayer funds.
Of these 21, 000 stimulus payments which have been made to the deceased, over 2, 000 of these payments have gone out the door since July 2009.
This includes the payment of 40 stimulus cheques to deceased individuals so far this financial year.
The total amount of borrowed Government money spent on stimulus payments to date is estimated to be around $7. 7 billion.
At the time of introduction of the original legislation in 2009, the Government opposed the entire economic stimulus package, including payments to be authorised by the Tax Bonus Act, on the grounds that the package was poorly targeted, ineffective in supporting employment, and unaffordable.
Given that stimulus to the economy is no longer required and time has moved on since the GFC, the Government considers that further payments are not warranted.
This represents an opportunity to stop further government waste and is a step towards more prudent Budget management.
The ATO has ceased issuing cheques in most circumstances, except when it has been requested by the taxpayer.
Therefore, to ensure that further unnecessary tax bonus payments are not be made by the ATO, this bill repeals the Tax Bonus Act.
We can no longer afford to be borrowing money to pay for this type of spending.
In fact Government spending has never returned to levels prior to that of the Global Financial Crisis. In the 2008-09 financial year alone, real Government spending grew by more than 12%>.
The Government is now spending over $100 billion a year more than the final year of the Howard Government.
That is why this Government is proceeding with a Commission of Audit which has been tasked to assess the role and scope of Government, as well as ensuring taxpayers' money is spent wisely and in an efficient manner.
This Bill is a step in the right direction when it comes to ending waste in Government.