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

I am pleased to rise to speak on the Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Bill 2017. A little over 75 years ago—in fact, on 22 May—Sir Robert Menzies gave his famous 'The Forgotten People' speech. We need to put that speech and the messages in that speech into some context. It was only earlier that year, in February, that Singapore had fallen. Darwin had been attacked. The speech was given two weeks after the indecisive Battle of the Coral Sea. At the time the speech was given, the Japanese were planning an attack on Sydney Harbour. That is the historical background that these magnificent words of the 'forgotten people' speech were made. Sir Robert Menzies finished with the words—

Mr Conroy interjecting—

I see the member for Shortland is sitting at the table, and I hope that he listens and might learn something from these words. Sir Robert Menzies, to finish his speech, said:

Individual enterprise must drive us forward.

And he concluded with this last paragraph:

… what really happens to us will depend on how many people we have who are of the great and sober and dynamic middle-class—the strivers, the planners, the ambitious ones. We shall destroy them at our peril.

That is a warning that we all must be constantly aware of. Yet, sadly, we have seen in this parliament one side of the House determined to make it harder and harder for those strivers and planners—those who are prepared to take the risks, those who will drive our economy forward. Everything the Labor Party does drives those people out of business and destroys them. What they don't understand is the importance of incentives in the economy.

There are three dangerous factors, and the first is our nation's corporate tax rate. We simply have to have an internationally competitive corporate tax rate. We have had that in the past and wise leaders like Peter Costello understood that when he reduced Australia's corporate tax rate from 36 per cent down to 30 per cent back in the year 2000. Previous to that, even Paul Keating understood the importance of having an internationally competitive tax rate. As other members have noticed, previously Labor members understood and agreed with our proposition.

We face an international environment today where our major competitors have understood this and have lowered their corporate rate of tax. We see that the UK has plans to lower their corporate tax rate to 20 per cent and reduce it even further, because they understand that, if you lower that corporate rate of tax, you attract investment, you end up with more jobs and, at the end of the day, you end up with more government revenue. It is exactly the same in the USA, where President Trump has promised to reduce their corporate tax rate to 15 per cent. We have seen our Kiwi cousins over the ditch reduce their corporate tax rate to 28½ per cent. New Zealand is an interesting example to learn from. They lowered their corporate rate of tax—and guess what happened to taxation revenue? It was not a giveaway to big business, as members of the opposition like to say. At the lower rate of tax, New Zealand actually got more government revenue.

We do not have to look as far as New Zealand, we only have to look at our own history and we see that every single time from Paul Keating's time when he lowered the corporate rate of tax to increase our international competitiveness to Peter Costello's decision, we got more revenue flowing into the government. We grew the size of the economic pie. We created more jobs, we created more wealth, we created more prosperity. As a government, we had more revenue flowing in to pay for all the social service programs that all of us so desperately want to provide. Knowing the importance and knowing the history, we still have the Labor Party trying to block reductions in the corporate rate of tax. I would like to ask members of the Labor Party: how do they think our nation is going to compete in the years ahead if we are stuck with a 30 per cent rate of corporate tax and the US is at 15 per cent? What damage will that do to our economy?

The second important thing that we must look at is the highest rates of the personal marginal tax rate. If the Labor Party had their way, they would set the highest rate of personal marginal tax rate at 49½ per cent—effectively 50 per cent. What that would mean is that, when someone reached $180,000, if they decide that they want to take a bit more of a risk or if they want to work longer hours or if they want to try a new business idea, the government would take half of whatever income they earned. If they go and spend the half that is left, another 10 per cent would come out in GST. That becomes a disincentive for those strivers, those planners, those ambitious ones whom, as Sir Robert Menzies advised, we must always strive to protect.

There is also the issue of the international competitiveness of our highest personal rate of marginal tax. If one of the countless bright young ambitious Australians that we have went to Singapore, they would pay a personal rate of tax of around 15 or 17 per cent, yet in Australia it is effectively 50 per cent. How many great young Australians will take the opportunity to move overseas?

The third area that threatens to undermine those strivers, planners and ambitious ones is the cost of energy in this nation. It used to be our nation's competitive advantage. We have the coal-fired power plant right next to the coalfields close to the transmission grid close to the city so we in Australia can generate electricity cheaper than anywhere else in the world. That underwrote thousands and thousands of jobs—thousands of jobs in our aluminium industry and in countless other industries. That was our nation's competitive advantage.

Like in life, if you get a competitive advantage, you guard the thing with your life. If you are running a business or a corporation and you are able to develop a competitive advantage, you fight every single day to maintain it. Yet we have seen members of the Labor Party prepared to surrender our nation's competitive advantage purely on an ideological basis. They like the look of wind turbines. They think the wind turbines are wonderful. They very well may be and some people may like them, but they are undermining our nation's competitive advantage. They are destroying jobs today. They are white-anting our nation's economy.

We have seen the evidence from South Australia. We have seen how the South Australian Labor government have almost destroyed their economy. I see the member for Hindmarsh over there. He must apologise. He must see the pain that it is causing constituents in his electorate and he must see the pain it is causing industry. Yet where is the highest unemployment in the nation? South Australia. What do the Labor Party want to do? They want to copy exactly Labor's 50 per cent renewable energy target. You could not think of a policy that could damage our nation's competitiveness.

In a very small way this bill is important, because it helps those strivers, planners and ambitious ones. We understand and we want to give them every encouragement to go out into the marketplace, risk their capital and test their ideas. We know that most of them will eventually fail—that is the reality—but we need to give them the incentive to get out there and give it a go. If we fail to do so, we will simply go backwards as a nation.

Let us look at the measures in this bill. Firstly, schedule 1 increases access to losses. This measure was announced as part of the government's National Innovation and Science Agenda. It will relax the same-business test for assessing prior year company losses to other financial years and introduce a similar-business test. We want to encourage businesses to go out and try new ideas. If they try them and incur a loss, which many of them will do when they are experimenting, we want them to be able to carry that forward under the same business if they are doing something similar in the same business. That is a very simple thing.

In today's economy, when innovation is moving quickly and when we are seeing companies needing to be agile, mobile and able to change track quickly, we need to have the same-business test changed to a similar-business test. It may be only a few words, but it is a very important amendment because it allows the operation of the same-business test and allows loss-making entities to seek out new capital and new opportunities to, hopefully, eventually return to profitability. It proposes two elements.

Debate interrupted.

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