Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I rather enjoy the member for Griffith's interjections, because it shows how completely out of touch those members of the Labor Party are. I welcome any interjection from the member for Griffith—get it recorded, get it down, because I want history to record how out of touch and completely delusional the member for Griffith is.

The best thing about this budget is that we get back to basics. The basics of this government are about creating wealth for the nation and increasing the size of the pie so that we can afford to do all those social programs that we need. Unlike the member for Griffith, this side of politics understands that there is no magic pudding. We have to raise every single cent we spend. We need to raise that money. The way to do it is quite simple. We need investment and productive assets, and we need to encourage entrepreneurship, risk taking and experimentation, because that is what drives the innovation and the productivity increases and creates wealth in this nation.

I thought a quote from Steve Kates, Associate Professor of Economics at RMIT, was interesting. I thought that it was very worthwhile repeating. He said:

Growth and employment are the result of VALUE ADDING production. That is, the result of production where the value of what is produced will, within a reasonably short period of time, create an income flow even greater in value than the value of the resources used up. That is the meaning of value adding.

…   …   …

Growth comes from business. If you confuse personal spending with business spending you will never get these things clear in your head. There is personal consumption, which is the point of economic activity. And there is business activity which is continually trying to add value to the resources they use up.

He advises:

… stop looking for consumer demand to lead the recovery. It cannot be done.

I concur with those remarks of the professor. That is why this budget does exactly that. With a small business package, it is about creating investment in the productive assets of this nation and encouraging entrepreneurship. Small business need every help they can get. It is worthwhile noting that, for the six years that the Labor Party were running this country, the small business sector in this country lost over 500,000 jobs. Half a million jobs were lost in the small-business sector. We see the contempt the opposition have for small business. We saw the complete contempt of the Leader of the Opposition in his infamous pie shop incident in Melbourne. We saw the complete contempt of the previous Labor government with the crushing of 500,000 jobs in the small-business sector.

That is why this budget is so important. It gives small business the incentive to go out and invest. It gives them the incentive to invest in productive assets and take risks. The cost of those small-business tax cuts in the budget papers is about $350 million every year over the next four years. But I would like to make a prediction. My prediction is that those tax cuts for small business—reducing the corporate tax rate from 30 per cent down to 28.5 per cent—will not cost the budget one single cent when the final count is done. I will tell you why. It is because it is exactly what has happened every time in our nation's history when we have lowered the corporate tax rate. What happened under the earlier Hawke Labor government when the tax rate was lowered? Tax revenue did not fall; it actually increased. But more importantly it actually increased as a percentage of GDP. The lower the tax rate we have, it is highly likely that more tax revenue will flow to government. I will make that prediction. I believe that in several years time when we sit down and analyse the effect of these tax cuts for small business, they will have had a positive effect on the bottom-line of the government. The government of the day will actually be receiving more money in taxation revenue at a rate of 28.5 per cent for small businesses than they would at the rate of 30 per cent.

When it comes to investments in productive assets I think it is worthwhile looking at some of the terrible mistakes we have made over the past couple of years. Some of those terrible mistakes were actually put out in the Grattan Institute report on our solar rooftop schemes. The Grattan Institute equated this to a $10 billion net loss to the economy—$10 billion written off. They say that $18.7 billion will be invested up to 2030 in installing and repairing solar rooftops, and that will produce $7 billion worth of electricity. So if you invest and spend $18 billion but you only get $7 billion in return, I do not think that is a very good investment. That is a way to destroy capital and make the country poorer.

We have seen it through Labor states building desalination plants. Billions and billions of dollars wasted. In fact I think at the desalination plant in Sydney—one of the few desalination plants in the world—they had to bring in bilge pumps to pump the fresh water out so that they could lay the foundations. Then, unfortunately, we see the waste that has been forced upon this nation with the renewable energy target. We are going to see about $20 billion wasted on building around 2,000 additional wind turbines, at a time where we do not need a single wind turbine built, where a single wind turbine would not be built without this subsidy. This is waste. It is the effect it has on the poorest people of this nation when we have this absolute waste of money.

Ms MacTiernan interjecting—

I hear the member interjecting over there. How many wind turbines are you volunteering to have set up in your electorate?

Ms MacTiernan interjecting—

Maybe there are some nice places in Perth you could volunteer. Very nice.

Ms MacTiernan interjecting—

Yes, you will vote for them, yes, you like them, but you will put them in other people's electorates so that they can bear the burden.

Ms MacTiernan interjecting—

If the member for Perth really believes these turbines are excellent—

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