Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Hansard source

Well, there is certainly no doubt that you do not support small business. These measures are very important for small business. These taxation amendments do a number of things. Schedule 1 covers the government’s announcement of December 2008 and reduces PAYG instalments to provide relief for small businesses—a very important aspect of this bill. Schedule 2 provides greater coherence and consistency on unclaimed superannuation for temporary residents. Schedule 3 gives effect to the reforms to income tests announced in the 2008-09 budget.

These are very important reforms. Millions of small businesses will benefit along with other taxpayers. However, before I go into the detail of the bill, I would like to make some broader remarks about taxation, and I believe the content of this bill facilitates those conversations. Firstly, as a new member of parliament, someone who was elected at the 2007 federal election, I think it is important that I make some in principle remarks about my views on taxation generally. I would like to make some clear statements on the core issues so that people know where I stand on these types of matters.

The word ‘taxation’, as it has developed in much of the Western world, has become a byword for bad. That is something that I have never understood. In my view, taxation is a manifestation of civilisation. Fundamentally, it is about people making a contribution to their community and to people who are less well off. Certainly, some countries have structured their economies in such a way that taxes are used for purposes that they should not be, and there are tax regimes that drive inefficiencies and reduce incentives and productivity. But taxation is often, in large part, a sign of the generosity of a society or culture. For example, I believe taxation revenues that are used to help out the needy or the disadvantaged in a targeted and useful way is a very important thing for a society to be doing. In fact, I would go as far as to say that unless a society sets its tax levels such that it can build quality education systems and quality schools and train and pay quality teachers then the society is doomed in a modern world. Tax revenues directed towards education are in fact a most worthwhile investment and can make a contribution to the set of financial circumstances that we have.

It is inherently good for a society, in my view, and inherently in the economic interests of society to have a modern taxation system. Nevertheless, despite the fact that there are so many positive arguments and examples as to the good use of taxation and the necessity for taxation, much negativity has been associated with taxation, and that is in large part because of the ideological jihad that has been waged on taxation by the neoliberals and others of conservative origins. The neoliberal mantra which exists, despite all of the evidence, has been that there is one economic policy solution for everything—tax cuts, tax cuts, tax cuts. It is more of a theology for those people than an ideology, in my view. No matter what is happening in the economy, the refrain today from the Liberals and the conservatives is always the same. The foolishness of this blind adherence has never been better illustrated than it was today by the member for Moncrieff.

Let us compare the difference between the economic predicament of the United States of America today and that of Australia today. Whilst there are clearly a number of economic factors at work in the meltdown of the American economy, in my view, one of the most important contributing factors has been the policy the Republicans continue to take to the electorate—that is, of course, tax cuts, tax cuts, tax cuts. This has plunged America into unprecedented levels of debt. Significantly, Americans had a massive level of debt when the financial crisis arrived over the last year or so. The pot of gold at the end of the rainbow, the Republican tax-cutting rainbow, never materialised. It was an illusion and it always has been. The theory went: if you cut taxes you grow the overall economy, so the overall tax take increases. That just never happened—certainly not to the level created by such a healthy economy. The reckless Republicans kept cutting taxes, especially for the rich, but their economy never responded the way that they expected. Year after year, despite mounting evidence that the theory was less credible than the tooth fairy, they kept believing in it. Debt levels rose and rose. Demands for services of course continued. Revenues were not there to pay for those services. As the lack of investment in social infrastructure continued and the need grew, so did the US deficit. There was a massive US debt to pay, a huge mismatch in social infrastructure and need, and a lot of scepticism in the US economy.

See this speech in context