Craig Laundy (Reid, Liberal Party, Assistant Minister for Industry, Innovation and Science) Share this | Hansard source

The member for Batman yells out, 'I do.' I'll leave it there, David. I won't bite. I won't say what I should.

What do you say to the people in Perth? I was there last week. In suburbs in outer Perth, prices have decreased between 15 and 25 per cent in the last 12 months, not only on investment properties but on all properties. The shadow Treasurer, the alternative Treasurer of this country, will be, if elected, the Treasurer for every postcode in this country—not just those in Western Sydney and western Melbourne, where there are marginal seats that he wants to win, but in places like suburban Perth, where, if it weren't for the fact that banks in Australia have an Australia-wide loan book, you would have right now a subprime crisis. You have people who have bought into that market in the last five years who have negative equity in their homes. You have record numbers in mortgage stress around the country. Darwin is suffering from the lack of fly-in fly-out workers, with house prices down seven per cent year on year—and the shadow Treasurer thinks negative-gearing changes there would be a good move! You will rip the guts out of the housing market in places that can't afford it. In Perth, you will deadset have tumbleweeds rolling down the street. You have 25 per cent decreases in people's homes. A lot of people find themselves in a situation of negative equity.

With negative-gearing changes in those places, rural Australia included—in Western Sydney and western Perth, we have an issue, yes. However, you have seen on the front page of today's TheAustralian that changes by APRA to the ways banks lend to investment, coupled with clampdowns on foreign investment in this market, have seen declines. Harry Triguboff came out and stated that in New South Wales and south-east Queensland—the Reserve Bank governor adding south-east Queensland last week—you have the lag of supply following demand. But the sad part is that the measures that have been taken in the last 12 to 18 months have now curtailed demand. You will now see that glut hit the market, and that will be an issue for the broader market in its entirety.

But the war on business is not limited to opposing these tax cuts; it is a war on investment across the board, be it capital gains tax—the shadow Treasurer spoke about family trusts. What he completely neglected to point out—and no-one has yet pointed it out in this debate—is that the global financial crisis saw a change in the way businesses in this country employ people. They needed flexibility. You saw two things happen. You saw a casualisation of the workforce and you also saw companies disband their workforce and hire them back as contractors. Guess what the contractors did? They had to set up as businesses themselves to contract back to the companies. So what did they do? They went to see their financial advisers.

Mr Husic interjecting—

The member for Chifley yells out. I am explaining what the workers did. They would then set up their business with, usually, a proprietary limited company sitting out at the front of a family trust. Why? Because you have limited liability in the company and you distribute through the trust. The trust does not actually pay tax; it distribute to the beneficiaries, who pay top-up tax at their appropriate marginal rate. The growth that has occurred in trusts in the last five to seven years has been driven by how the workforce has evolved post GFC. Businesses are still shy. The economy is still soft. Underemployment sits at levels that are of great concern. Attacking business is not the answer; fostering business is the answer. Why? Because when businesses make greater profits—it has happened since Adam was a boy, and not just in Australia but worldwide—they reinvest in their business. What happens when they do that? They grow. What happens when businesses grow? They employ more people. We see it with small and medium-sized businesses all the time. They are interested in reinvesting in their business.

Mr Husic interjecting—

The member for Chifley yells out, 'What about the sacrifices the workers make?' SME operators through that GFC period—I have known many of them since before politics for me—paid their workers first and themselves last.

If they lost their job, they would most likely lose their home. They put their family home on the line every day. What do they do at the back of it? They employ workers. I can tell you this, coming from a family business background, and I have been lucky enough to have met with some success along the way. My family owns a number of assets. However, the most important asset that my family has at its disposal is our amazing workforce, our staff. Why? Because we can't open the doors without them, as all small and family businesses can't. I grew up going to staff weddings, staff christening and staff funerals. Why? Because the staff were part of the family. That's how it happens in small and medium-sized family businesses. That's the reality of what we're talking about here. That's what those opposite, sadly, don't understand, because they've never actually done it.

What we're talking about is fostering entrepreneurial flair, backing people who take risks, backing people who put their homes on the line to start small and medium-sized businesses that grow to be big businesses. The principle doesn't change, irrespective of the size of the business. If you reduce company taxation—and we have a policy that we're talking about today to do that—you will incentivise business to invest.

As the shadow Treasurer said in 2013, in today's highly competitive, mobile-capital world, you need to be competitive internationally. The shadow Treasurer, in his additions or amendments to the bill, spoke about tax cuts also for millionaires. Since when did $180,001 become a millionaire? They selectively choose the number they want, because it makes a nice political slogan. They want the top marginal tax rate in this country to be at 49½c in the dollar. That's not internationally competitive. You will lose people to places like Singapore and all through south-eastern Asia, where the tax rates are far lower and human capital is mobile.

He spoke about penalty rates and the fact that the Fair Work Commission has come up with a decision that we won't stand in the way of. However, last Saturday I worked on council elections—another day of my life I might not get back—and I stopped at a McDonald's on the way there to grab a coffee. As the barista was making the coffee, there was a young boy there sweeping the floor. The barista said to him, 'Are you new?' He said, 'Yes, I started last week.' I looked at him and I said to him, 'What's your name, mate?' He said, 'Shaun.' I said: 'Mate, what shifts do you work? What are you doing? You're at school, obviously.' He said, 'Yes, I am.' He said, 'I work six hours on a Wednesday after school; I work six hours on a Saturday and six hours on a Sunday.' Under the EBA that the SDA union has done with McDonald's—which is starting to come out in the Senate inquiry that is going on into this—Shaun will be short paid. He'll be paid $27 less this week than he would if he was on the award. That's 1,350 bucks a year that the union movement has ripped off a 15-year-old schoolkid. That's the hypocrisy of what we're talking about opposite. The SDA union, which has given $10 million—

See this speech in context