Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill represents the second part, the second tranche, of the government's overhaul of the Australian company tax system, and our commitment to businesses of Australia to drive growth, provide employment and grow exports to support more and better paid jobs in this country. It is designed to make our company tax system more competitive on the international stage.

The bill follows the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 to deliver the remainder of the government's plan to cut the company tax rate down to 25 per cent for all companies by the end of the decade—over the next 10 years.

This government will not rest until we have successfully fought to implement a company tax framework that sets Australia up to have more and better paid jobs in the future and for future generations. We cannot do that until we have a company tax rate that allows us to compete globally and allows our businesses to reinvest and hire more Australians.

On 31 March 2017 the government announced that it had Senate crossbench support to cut the company tax rate for companies with an aggregated turnover of up to $50 million each. The government successfully passed that bill in the House just a few days ago.

That is a great start. It impacts around 3.2 million businesses employing over 6.5 million workers. That is more than half the Australian labour force. However, we cannot afford to stop there.

Under this bill, which I am introducing today, the turnover threshold to qualify for a lower tax rate will be progressively raised to cover companies by 2024-25, before the company tax rate is reduced to 25 per cent for all companies by 2026-27.

While the cut in company tax for companies with a turnover of less than $50 million is a good start, Australia must continue with the second tranche of this reform to make the nation's company tax rate internationally competitive.

When Australia cut its company tax rate to 30 per cent in 2001, there were 19 countries in the OECD with a higher company tax rate. Now only four OECD countries have a statutory company tax rate higher than Australia's.

Furthermore, both France and, as President Trump announced recently, the United States have plans to cut their company tax rates below 30 per cent, and, in the US, to take that down to 15 per cent. While, in France, they are expected to cut the corporate rate with the new President-elect Macron, supporting a 25 per cent rate.

These developments intensify the pressure on Australia's corporate tax arrangements, because of the rates that are existing around the world. The prospect of Australia having the least competitive corporate tax rate in the OECD is not something that this parliament should allow to occur. That is why the government continues to put forward these measures.

The company tax rate is critical because it has a significant influence on business investment decisions. A lower company tax rate, compared with other countries, will raise the attractiveness of Australian investments—making it easier for companies to attract the investment they need to grow their businesses.

More business investment, such as upgrades to machinery and equipment, would make Australian workers, and support them in their efforts and their hard work, to be more productive and generate growth in real wages. This bill is about supporting increased wages for hardworking Australians.

Treasury's economy-wide modelling suggests a cut in the corporate tax rate to 25 per cent would generate a sustained increase in the level of GDP of just over one percentage point in the long term. Legislating the rest of the company tax cuts now will allow businesses to base their long-term investment decisions on a 25 per cent tax rate.

Critically, for the workers of Australia, the majority of the gains from a company tax cut are expected to flow through to Australian workers in the form of increases in real wages. This is why the government's Enterprise Tax Plan is essential to supporting Australian jobs and wages into the future.

Full details of the measure are contained in the explanatory memorandum.

Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

I move:

That the debate be adjourned.

And I ask that the question of the resumption of the debate be put separately.

Question agreed to.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The question now is that the resumption of the debate be made an order of the day for the next sitting.

Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

On the question that is now before the House, it is the view of the opposition that the next stage of these tax cuts are not affordable. The budget has made that clear. Therefore, it should be considered at a later date, rather than at the next sitting. I move:

That the words 'the next sitting' be omitted with a view to substituting '29 August 2019' as an amendment.

Tony Smith (Speaker) Share this | Link to this | Hansard source

Is the amendment seconded?

Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I second the amendment.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The original question was that the resumption of the debate be made an order of the day for the next sitting. To this the Manager of Opposition Business has moved an amendment. The immediate question is that the amendment be agreed to.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

The Australian public are sick and tired of the political games of the Labor Party, who are trying to stop investment in this country to support more growth for better paid jobs and more jobs for Australia. This is just another absurd stunt from the opposition, who are just not interested in engaging in a sensible economic discussion to grow our economy.

To do as they have proposed is an absurdity. It is important that Australian workers know that this parliament is getting on with the job of supporting long-term investment decisions that support wages now. The opposition does not seem to understand that if you are going to invest billions of dollars, 10 years from now you want to know what the arrangements are going to be for those investments. That is why a 10-year plan on corporate tax arrangements is the right economic policy. It is something the opposition used to support, but in their usual hacked political opportunist way they seek to undermine the investor confidence in this country in the way they have dealt with this issue.

It is pure and unadulterated hypocritical politics from an opposition that has no clue how to drive investment and support growth for more and better paid jobs in Australia. This is a pathetic stunt, and the opposition should grow up.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The original question was that the resumption of the debate be made an order of the day for the next sitting. To this the Manager of Opposition Business has moved as an amendment that the words 'the next day' be omitted with a view to substituting 29 August 2019.