Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

In considering any budget that comes down, it is worth saying a few words about the economic circumstances in which it is received. Today in Australia we have record underemployment, fewer hours worked per Australian than ever before, higher rates of casualisation and insecure work and record slow wages growth. We have inequality at a 75-year high, homeownership at a 60-year low and incarceration at a 100-year high. And we have a government which came to office driving debt trucks around the country and now having increased the deficit tenfold and increased debt by $4,000 for every man, woman and child in Australia. Interest on government debt costs every Australian nearly $500 a year. That is the debt blowout we have seen since the government came to office.

I am indebted to the member for Rankin, who notes in an opinion piece in the Huffington Post today that, despite spruiking $75 billion in infrastructure investment over the next decade, the government's budget papers actually show that funding for infrastructure has been slashed, leaving Infrastructure Partnerships Australia, an independent expert body, slamming the budget and saying it 'sees infrastructure funding at its lowest level in more than 10 years'. So, while the government is talking about better days ahead and claiming to do something on housing affordability, in fact this is a budget that fails the job test, fails the Medicare test and fails the fairness test. The zombies are still alive. Medicare is still in the freezer for years.

We have heard from the previous speaker a suggestion that taxation is theft, but apparently that only applies when you are taxing millionaires. If you are proposing to put up taxes on the local plumber, cashier or cleaner, that is not theft at all! No, that is the government's money to take away from them! So, when the government raises the Medicare levy by 0.5 per cent on workers on average wages, a measure opposed by those of us on this side of the House, I am not going to hear anyone on the other side of the House claiming that tax is theft. It is only theft if you are taking it from millionaires!

We have heard also this guff from those on the other side that the personal income tax scales are now egregiously unfair if we leave them where they are on 1 July compared to where they are on 30 June, that if we leave the top marginal tax rate where it has been for two years then apparently Australia will fall into a terrible time of ruin. The member opposite repeated the comment of the Treasurer, saying that Labor will have you working one day for yourself and one day for the government. I have a couple of concerns about that. First of all, the Treasurer of Australia seems not to understand the difference between marginal and average tax rates. Also, the Treasurer of Australia seems to be eliding a little between his proposal and ours. Let's be clear. Labor's proposal, at the top marginal rate, would have a day's work for the taxpayer and 23 hours 46 minutes work for the government. The Liberal Party proposal has a day's work for the taxpayer and 22 hours 48 minutes work with the government. It does not sound like such a big difference when you put it that way, and that of course is because 49.5 per cent and 47.5 per cent are only two percentage points apart.

From this government, we have a proposal that someone on $1 million should have a tax cut of $16,400, while someone earning $65,000 will pay $325 more tax in two year's time. Meanwhile, someone working on Sunday, 2 July—as so many Australians around the country will do—will be earning weekend penalty rates. According to the analysis, they could lose up to $77 a week—the day after a millionaire has begun enjoying the fruits of their $16,400 tax cut, the day after a bank CEO has begun enjoying the fruits of their $170,000 tax cut coming to them under this government.

Members opposite have also spoken about company tax. One statistic you will never hear from them is where Australia compares to the G20, the world's 20 largest economies. If you listen to their rhetoric, you might imagine that Australia's company tax rate puts us near the top of that pack. In fact, according to the United States Congressional Budget Office's report conducted in March this year, Australia is in the middle of the G20 pack for our company tax rate. On top of that, we have dividend invitation, which gives back about one-third of the revenue. That means a company tax rate of 30 per cent, with imputation, raises about as much for the government as a company tax rate of 20 per cent without imputation—another fact you will not hear from those opposite.

And then we have the bank levy. When Labor proposed a bank levy one-tenth of the size of the one that is proposed by the government, the then Treasurer Hockey said, 'If they do this just before an election, imagine what they will do if they win.' Well, Australians do not have to imagine that because, as history records, the Liberals won the 2013 election. They do not have to imagine what a Liberal bank levy would look like, because they have one in front of them now—well, they will have if it ever comes out of secrecy. We know that a Liberal Party bank levy does not involve any consultation with anyone. In contrast to the proposal put forward by Labor in 2013, which followed a letter written by Reserve Bank Governor Glenn Stevens as head of the Council of Financial Regulators, this bank levy has no relationship to a financial stability fund. Labor acted on the advice of the head of the Council of Financial Regulators, a group including the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission and the Treasury. We acted on their proposal to put in place a bank levy much more modest than the current one and to allow the Australian Prudential Regulation Authority to collect the money and put it into a financial stability fund.

By contrast, we have seen from the government no prior debate of this measure and we have seen no prior calling for it by expert bodies. It stands in contrast, too, with the British bank levy where there was around seven months of consultation allowed between the release of the consultation paper and the legislation passing the parliament, and in which long-term debt was explicitly exempted in an attempt to change the behaviour of the banks. This Treasurer is incapable of making a clear economic argument, which is why he has merely made political arguments for his bank levy and it is why he is now incapable of answering simple questions, such as why the levy does not apply to foreign banks.

We on this side of the House have a very different set of proposals. We have put forward a very clear set of packages aimed at closing debt deduction loopholes, which adds more than $5 billion to the budget bottom line over the medium term. It continues Labor's activism on multinational tax avoidance, including legislation passed during the last Labor government, the Tax Laws Amendment (Cross-Border Transfer Pricing) Bill (No. 1) 2012, which was integral to the recent Australian Taxation Office victory over Chevron. I mention that bill because the Liberals voted against it. Had the Liberals had their way in this parliament, the Chevron decision would not have been possible in the way in which it took place. So Labor continues to lead on debt deduction loopholes while those opposite continue to attend industry conferences and happily tell the big end of town that their loopholes are safe while there is a coalition government in charge, because they will not close the debt deduction loopholes like those that have been used by big firms around the world in order to avoid paying their fair share.

In his budget reply, Bill Shorten announced a package of measures designed to tackle tax havens. Tax havens hold trillions of dollars of the world's financial wealth. On one estimate, one-tenth of all of the world's financial wealth is held in tax havens such as the Cayman Islands, Panama and the British Virgin Islands. These islands, these 'treasure islands', as they have been referred to by Nicholas Shaxson, account for billions of dollars of lost taxes every year. As ATO Commissioner Chris Jordan recently noted:

Many of these matters involve deliberate tax evasion, often using overseas tax havens or complex corporate structures to avoid detection and recovery.

Yet the Turnbull government has shirked every opportunity to clamp down on tax havens. Labor will take a very different approach. We have announced the public reporting of country-by-country reports. This is high-level tax information about where and how much tax was paid by companies whose turnover exceeds a billion dollars globally. The reporting of this information is vital to ensure that we have transparency to see where firms pay their tax. The Senate Economics References Committee's report entitled Corporate tax avoidance part 1: you cannot tax what you cannot see made this a clear recommendation. I commend in particular senators Dastyari and Ketter for their hard work on that committee. Public disclosure allows other businesses, shareholders, civil society, academics and journalists to ensure that the big companies are paying their fair share.

Labor has announced a package of reforms on whistleblower protection and incentives. In our last term of government, we extended whistleblower protections in the public sector, and this now does so in the private sector, where it leads to an increase in the tax paid. It allows whistleblowers to collect a share of the penalty collected, capped at $250,000 or one per cent of the penalty figure, whichever is higher, and goes well beyond the government's proposals announced in last year's budget. Measures of this kind—these reward and incentive measures—exist already in Britain and in the United States in the form of the False Claims Act, and they sit alongside appropriate protection for whistleblowers.

Labor will put in place mandatory reporting of material tax risk if companies have tax haven exposure. The tax office would issue guidance on the types of activity and the detail that businesses are required to disclose. A list of tax haven jurisdictions would be of a similar design to the European Union's 'black list' and might well include jurisdictions such as Guernsey, Monaco, Mauritius, Liberia, the Maldives, the Marshall Islands, the Bahamas, Bermuda, the British Virgin Islands and the Cayman Islands.

Labor have announced that we would provide public reporting of AUSTRAC data—that is the international funds transfer instructions for every calendar-year.

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