David Coleman (Banks, Liberal Party) Share this | Hansard source

I cannot believe that those opposite have actually chosen to discuss the issue of tax for today's MPI. As I understand it, the idea of the MPI is for oppositions to raise issues that are favourable to them. And, on tax, the opposition's policies are absolutely appalling. There are so many examples to run through it is a very odd strategic choice. I know the shadow Treasurer has had a rough few weeks; he has been fluffing around on the bank tax, effectively running the lines of the banks and really failing to make any headway there. Maybe he has said, 'Look, we'll have the MPI about tax; it'll be really good for us.' But that was a really bad calculation, because the Labor Party's policies on tax are appalling.

One of my personal favourites of Labor's appalling policies is their extraordinary policy on capital gains tax. You will recall they said that, because of the housing affordability issues in Sydney and Melbourne, they want to raise capital gains tax by 50 per cent on everything. So the Labor Party, those opposite, propose to increase capital gains tax by 50 per cent on everything—not just housing investment, but also investment in farms, investment in factories, investment in cafes. They want to increase tax on all of those investments by 50 per cent because of issues to do with housing affordability in Sydney and Melbourne. That is an extraordinarily stupid policy and the impact of it would be to reduce investment. That is the last thing we want. What we want is more investment, particularly in small and medium businesses.

So we say, let's reduce the rate of company tax for small to medium businesses from 30 per cent to 25 per cent and, happily, the Senate agreed. The Senate, to its credit, supported that legislation. But what those opposite say is: 'No. That is bad legislation and it should not be allowed to occur for businesses with turnover of more than $2 million.' What that means—and this is very clear—is that those opposite are advocating a $30 billion tax increase on small to medium businesses in Australia. If my characterisation of that is not right, I would welcome any of the members on the opposition benches to say so, or perhaps the shadow Treasurer could come into the chamber and say that that is not the case and the opposition will not be increasing tax on small to medium business by $30 billion if elected. But he will not do that, because that is their policy. You cannot oppose a tax decrease without supporting a tax increase, and that is what they do.

They also think that businesses with more than $2 million of revenue are not small. I think a lot of them over there do not understand the difference between revenue and profit. Of course, there might be a business with revenue of, say, $2 million but its profit margin might be three or four per cent. There are a lot of small businesses with very small profit margins. So that business with $2 million of turnover might in fact be making $100,000 or less. It might be making the average wage.

Labor says that is a vast corporation which must be treated in a different way to small businesses and, as a consequence, should not be allowed to claim the $20,000 instant asset write-off. That is just an absurd policy, because plainly those small businesses of between $2 million and $10 million need that support. It is a very effective policy, the instant asset write-off. It encourages investment in local communities and those opposite say it is a bad idea, again betraying their lack of understanding in this area.

We also know that they oppose the government's sensible measure to fully fund the NDIS through an increase in the Medicare levy. They left us with this $55 billion hole in the NDIS system. They say that if someone is earning $85,000 they should not be asked to contribute to the National Disability Insurance Scheme funding, but if someone is earning $87,000 they should. So someone earning $87,000 is apparently rich and able to contribute and someone earning $85,000 or $86,000 is not. That is an absurd policy; it makes no sense at all. It is entirely appropriate for all Australians to contribute.

We know, of course, about their failure on the multinational tax legislation, where they shamefully voted against the legislation which the government has passed and which has already raised more than $2 billion. So it was a very bad choice to raise this issue as it is of great vulnerability for the opposition and a great strength for the government. (Time expired)

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