Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

Here we have a government, which lectures the Australian people about the need for budget repair. They used to talk about a debt and deficit disaster and a budget emergency. Here we have a government bringing to this house legislation which is the single biggest hit to the budget bottom line we have seen in this term or in the last term. This government is proposing to the House a measure which will materially, significantly and structurally damage the federal budget.

This is the government's corporate tax cut. We know that this is an expensive piece of legislation because we asked about it in parliament earlier this year, and we would have thought the Prime Minister knew how much this measure would cost over the decade, but it took some considerable effort to get it out of the government. Remember 12 months ago when they announced this; they announced a big 10-year corporate tax cut plan but they couldn't tell us the 10 year cost. But 12 months later it was deja vu all over again, because we asked the Prime Minister in question time what was the new 10-year cost, given that we're in a new fiscal year, and in scenes which were reminiscent of a farce, the government engaged in four different figures in the space of just four answers in question time. We had $24 billion, $26 billion, $36 billion and $56 billion. Eventually we got the right answer and the Treasurer replied with $65.4 billion. I did say to the Leader of the Opposition: 'Stop asking the question, because it's getting more expensive every time. The nation can't afford this!' The nation can't afford this hit to the budget bottom line that this government is so intent on producing.

We know that the government's mantra is jobs and growth. They say this is the key part of their economic plan, even though it's being introduced now, some considerable time after it was first announced. In fact, it was introduced in May in this House and is only being debated now. But, of course, they are a one-trick pony. When it comes to economic growth, this is all they've got. Their one shot in the locker is the corporate tax cut. It's what they've got. It's all they've got. It's a one-point plan.

What does that one-point plan deliver? It delivers a one per cent bigger economy in 20 years time—by their own figures, not by my figures, not by analysis or by any other independent commentator. It is a one per cent increase in 20 years time and a $2-a-day increase in wages in 20 years time. At a time when wages growth has flatlined at record lows and in real terms has gone backwards, the government's big idea is a wage increase in 20 years time of $2 a day.

The economic data recently released showed that living standards continued to decline and went backwards in the last quarter. This, again, is the government's big answer to the cocktail of rising costs, electricity prices, stalling wages growth and record underemployment. They say: 'It's okay. We have a plan. It'll work in 20 years time.' We also have a government which is supporting cuts to penalty rates from 1 July this year.

And, of course, this is despite all the lecturing about tax cuts and the Treasurer getting himself in a lather, getting himself very angry every question time, I must say, about Labor's plans on tax. This is a government which is actually proposing in separate legislation to increase the tax burden on every working Australian who earns more than $21,000. So this isn't a government which believes in lower tax; it's a government which believes in different tax. It's a government which believes in lower tax for big business but higher tax for working Australians. There are two pieces of legislation before the House as we speak. The minister at the table says, 'We want lower taxes.' You are trying to increase them. You are trying to increase them on working Australians who earn more than $21,000, and we oppose that.

We actually would support legislation which would see a proper approach to these matters, but we've got the government lecturing people about tax when they are increasing the tax rate on working Australians. Every single Australian who earns more than $21,000 will pay more in tax if this government gets its way. A worker on $55,000 will pay $275 a year. For somebody on $80,000 it's an extra $400. So this is not a government which believes in lower tax; it is a government which believes in different tax.

And of course we need to have a view to the competitiveness of our tax rates. The tax rates are one thing which goes into investment decisions. The United States Congressional Budget Office put out a paper earlier this year stating that the corporate statutory rate is one of the many features of the tax system which influence corporate behaviour and we need to look at the average tax rates. We do have a headline tax rate in Australia of 30 per cent, but the average tax rate for Australia in 2012, which these figures were based on, was 17 per cent, and there was an effective tax rate of 10.4 per cent. Of course, in Australia we have dividend imputation—a great Labor reform—which means that every domestic payer of corporate tax in effect gets it back. We actually refund our corporate tax to our domestic investors, something which is quite unique around the world and often gets lost in this debate. If we are going to compare apples with apples, let's have a proper debate. Let's see our corporate tax rates being compared on a proper basis with our competitors around the world.

The other thing which goes to competitiveness is, of course, consistency of policy and we see very little of it from this government. We see the Treasurer falling over himself trying to make political points and trying to accuse this side of the House of being high taxing when in fact it is them who are increasing taxes on every working Australian earning more than $21,000. They are being opposed by us. The Treasurer is quite obsessed with this. If you do a search of his speeches and his transcripts, Bill Shorten and Labor get mentioned a whole lot more than Liberal, the government or any other government policy. The Treasurer is obsessed with those who sit opposite him—a Treasurer completely devoid of any of his own strategy or policy.

We saw this particularly a few weeks ago with the Treasurer. He thought he was very clever. He added up all the policies that the Labor Party had announced and threw in a few others the Labor Party hadn't announced and said that it amounted to $160 billion worth of tax rises. He told people that the Parliamentary Budget Office had done this work. I thought that was unusual. I would have thought if the Parliamentary Budget Office had done work like this I would be aware of it. I thought that this was a highly unusual course of events. But my mind was put to rest shortly afterwards when the Parliamentary Budget Officer Jenny Wilkinson said:

References in the media this morning to modelling being released today by the Parliamentary Budget Office are incorrect.…The analysis reported in the media this morning was not conducted by the PBO.

The Treasurer had said this was PBO modelling. Government ministers were out there saying it was PBO modelling, and they were caught out. It was not PBO modelling. It just goes to show how desperate this government is to say and do anything when it comes to the economic debate. Labor will continue to lead that economic debate. We will continue to make our announcements which the government can either follow or not follow, and we've seen this consistently.

Again, the government lectures us about tax. Labor took the difficult decision of dealing with tobacco tax in the last term. The government said that this was a tax grab and didn't approve of it at all. Then of course, they adopted it in the budget. We announced our superannuation tax measures. The now Treasurer, who was Minister for Social Services at the time, personally led the campaign against our reform. He said, 'Labor is going to touch your superannuation. Hands off super. This government won't touch your super.' Then of course he became Treasurer and adopted large measures of Labor's policy despite all the rhetoric that he had previously adopted. He didn't do it very competently. He got some of the details wrong, but nevertheless, he did at least realise that something had to give.

Then came the negative gearing and capital gains tax. Again, Labor led this debate and announced a detailed policy. The government thought about a scare campaign which went flat at its first outing, and has not taken off at all. We know, perhaps why that's the case, because later on, we read that the Prime Minister and the Treasurer actually support negative gearing reform but got rolled in the cabinet, so their hearts are not in the scare campaign. Maybe that's why it hasn't worked. And then of course Labor has announced our very important plans to deal with tax minimisation through a minimum 30 per cent tax on discretionary trusts. Again, Labor was leading the debate, doing things which had been in the too-hard basket for 30 years.

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