Jason Falinski (Mackellar, Liberal Party) Share this | Hansard source

I always love listening to the member for Shortland. He is a member of a party that has never found any reason to cut taxes for anyone ever—except for foreign backpackers. That is the only time the Labor Party has ever supported a tax cut in this House.

We have built a successful nation—a nation that has created a modern and dynamic economy, brought people from all over the world and created a cohesive community, one in which you can achieve whatever you aspire to. We have done this peacefully. There has never been a war on our soil. We are part of one of the greatest global networks for peace in the history of humanity. We did all of this and more as individuals working together as a community—not as a government imposing these things upon us. At the heart of this question—at the heart of this bill—is whether you believe our community is better off with an overreaching government or you believe empowering individuals and communities delivers a more prosperous and just society. We on this side have always known that there is no social justice without economic growth and that work can provide meaning and dignity in life.

Those opposite speak of companies as if they are a cancer on our society, something that must be eliminated, something that must be stopped and something that must be purged from our economy and our country. When on its fourth go the Fair Work Commission created and selected by Labor decided to reform penalty rates, what was the response from those opposite? Apparently business owners are not workers. Apparently business owners are parasites living on the toil and sweat of those working for them.

Nothing has upset people in my area more than being told that, when they work on Sundays because they have to pay their mortgages, pay rent and pay for electricity and they bring their partners, parents, cousins or uncles to work because they cannot afford to employ people on penalty rates but they cannot afford not to open, they are not workers. They have put their houses and their financial futures on the line and they are told that they are not workers. Nothing has upset them more than that.

The reality is that real wages have not been growing in this country. That is an economic reality for a lot of Australians. Not everyone has felt the positive effect of our move towards globalisation, and there are some, shining a light on the glory of the past, who wish for us to regress, to move to protectionist policies when it comes to the economy. At what a risk? At what cost? When in the history of the world has going backwards ever taken us forward? I would ask those advocating for this shift: when have policies such as free trade ever harmed our people?

Take companies like Incat Crowther in my electorate. This is a company that designs boats and has won many international contracts for the delivery of equipment to offshore oil and gas platforms. It is currently bidding with another Australian firm for a $750 million contract with the US military. These are companies that have benefited from globalisation and, in benefiting, have been able to employ more Australians and pay more tax in Australia. Going down that path of turning our backs on globalisation is a slippery slope towards economic disaster.

That does not mean that we should ignore the reality we are faced with. The mining investment boom is over. The days of a society flush with cash and blessed with high commodity prices and low interest rates are coming to an end. Simply ignoring economic reality, demanding ever higher subsidies while accepting ever lower standards, like those opposite like to do, is living in fantasy land. We need to find policies that work. If we can grow the economy, that means more jobs for Australians. More jobs for Australians means Australians can spend more money in our economy.

There are companies in my electorate, such as Dematic, that manufacture here in Australia and are employing more Australians because of the investment that they have been able to make in capital equipment. These are companies that are making a huge contribution to our economy. The more Australians they employ the more Australians who are no longer unemployed or underemployed and the more Australians who are actively contributing to our society and can support their families and communities. That is social justice.

There are Australians who temporarily fall on hard times, often through no fault of their own. There are Australians who are not able to participate in the workforce because of mental or physical impairments. There are people who simply need help and, as a community, we cannot ignore that. That is why we have a welfare system. But we also cannot ignore that money does not fall from the sky. We need to find ways to sustainably fund our welfare system. Endlessly borrowing money which our children and grandchildren will one day need to pay back is not a solution. Debt is nothing more than delayed taxation.

Ultimately, this bill aims to do just that. It is our proposal to grow the economy, to grow jobs for Australians and to sustainably fund our welfare system. In my electorate, companies such as PharmaCare have made massive improvements because of investments they have been able to make in their companies. Those investments have allowed them to employ more Australians, to grow their businesses and to ultimately pay more tax.

While at first glance it seems like reducing the corporate tax rate may mean less income for the government and so less money for social welfare, that is a short-sighted conclusion. That is why the Australian Chamber of Commerce and Industry has pointed out that the last three corporate tax cuts have already more than paid for themselves in economic growth and income.

Mr Conroy interjecting—

I see the member for Shortland is still hanging on to the delusion that the Grattan Institute is not a Labor front. I will leave him over there to do that. In the long term, cutting taxes now means companies investing more to grow so their turnovers increase and, in real terms, they end up paying more tax. That is more real dollars that can go towards funding essentials for all Australians such as schools, hospitals and disability schemes. If you take that net gain and you combine it with the increase in overseas investment we will see because of a more attractive and competitive tax rate, as well as the crackdown on profit shifting by multinationals which has already netted this government over $2 billion, I am hard pressed to find any argument against this bill.

What does this package look like in greater detail? Step 1 is a reduction of the tax rate for small businesses to 27½ per cent. We all know, as we have heard it time and time again, that small businesses are the engine room of our economy. That does not make it any less real. In my own electorate of Mackellar on the Northern Beaches, there are over 12,000 registered small businesses. That is 12,000 businesses and 12,000 workers who would directly benefit from a reduction in tax—and that is just looking at the workers who run the businesses, not the ones who work in them. What does reducing taxes really mean for a business?

I ran my own business for 11 years. I know that I was ambitious and that I wanted to grow it as much and as fast as I possibly could. I took pride in the number of Australians I employed, and I strived to employ more. If I had had to pay less tax, I can tell you with absolute certainty that I would not have let that extra capital go to waste. I would have invested it back into my business, I would have bought that extra piece of software, I would have invested in that extra inventory and I would have hired that extra person for longer. I would have sold more, I would have made more profit and I would have ended up contributing more real Australian dollars to the tax system. I am not alone in that. Companies like VisionFlex and Chroma are currently developing on-site diagnostic equipment that will save lives and reduce the cost of running our healthcare system. They will be able to do more of that if they can keep more of the money they make. And, what's more, in my business I would have taken market share from offshore multinationals who enjoy lower tax rates overseas than I do in Australia. Would I have made more money? Absolutely, but what is wrong with that? When has striving to make more money to support someone's family become a bad thing?

Now, I know that what I would have done does not necessarily apply to all Australians who run their own businesses. Some run their own businesses simply for the flexibility and lifestyle it allows them to enjoy. They have no interest in growing their businesses and will be happy to pocket the cash. But let me ask you this: how many business owners do you know who do not want to invest in that extra toaster for their cafe, employ that extra salesperson to help sell their products or invest in greater skills for their workforce so they can better compete for customers? How many small business owners do you know that do not want to grow their businesses?

We are a country of go-getters. We have ideas and we want those ideas to become reality. We believe that we can make that better product and provide that better service, and that if we work hard we will succeed. Our job as a government is to get out of the way; it is to let every Australian who makes that courageous decision to go out on their own, invest their own money, mortgage their own home and put their own job security at risk to start their own business, to do just that. Governments do not create jobs; people do.

Step 2: by 2026-27, we will extend the tax rate cuts to larger businesses and bring it down to 25 per cent for all businesses. What does that mean? In effect, exactly the same thing, but at a greater scale and over a longer period of time. Yes, in the first instance, the extra cash might go to shareholders, but, at the end of the day, what do shareholders want? They want their share value to go up. Their share value only goes up when businesses grow. Businesses only grow when they invest in their assets: their infrastructure and, most importantly, their people.

Another reality we should not hide from is that we live in a global economy. That brings both challenges and immense opportunities. Over the years, we have seen large international corporates exploit tax loopholes and profit shift their way across the globe in order to minimise their tax bill at the expense of the nations they trade in. We all know it. They know it, and we know that they know that we know it. It must stop. It is why our Prime Minister and Treasurer have taken decisive action. Under our plan—not Labor's plan—big international companies are paying their fair share of tax and contributing to the wellbeing of all Australians. What we do not want is the behaviour of a few to taint the way we see all international companies doing business in Australia. The reality is that we want those companies to come here. We want those companies to invest in Australian infrastructure and hire Australians. We want them to do their research and development in Australia. We want them to choose Australia over any other place in the world where they could decide to go. To do that, we need to be globally competitive. We must remain a place that is attractive to foreign investment—and we are in a lot of ways. We have a highly skilled, well-educated and motivated workforce. Discounting the six years of Labor instability, we have one of the most stable governments in the Asia-Pacific region. We value and enforce the rule of law. They are all important factors for a company to consider before investing in Australia as opposed to somewhere else.

But our company tax rate is letting us down. We have become globally uncompetitive. Countries all over the world have understood that an attractive tax rate for companies plays a major role in attracting investment. So we, too, must face reality and adapt. We must accept that what might feel like a short-term loss is the only way to secure a long-term gain. There is only one way to secure our future prosperity, to make sure we have jobs, our children have jobs and we can afford to take care of each other, and that is to enable our local businesses to keep growing and remain open for business to the rest of the world.

The fact of the matter is a vote against this enterprise tax package is a vote for less work, not more. It is a vote for higher unemployment, not less. It is a vote for more people on welfare, not fewer. It is a vote for lower wage growth, not higher. It is a vote to stunt Australian businesses when all they want to do is compete internationally against the best in the world. It is a vote, frankly, for complacency. It is a vote for the very things that this parliament is meant to be against. It is a vote for removing the spirit of community that led to the creation of one of the greatest countries in the world.

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