Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

I'm speaking in support of the amendment that's been moved by the shadow Treasurer and in opposition to the substantive bill. The Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017, of course, institutes the government's proposals to provide further tax cuts for multinational corporations in Australia. It demonstrates just how this government believes our economy should be managed and who it should be managed for, because what this bill does is provide a massive tax cut for large multinational corporations, including the big four banks in Australia.

At the same time, this government is making it harder for pensioners, for families, for mums and dads and kids and for small businesses to get by. We see that every day in the explosion in electricity prices that small businesses and families have to deal with. Pensioners can't afford to put their heaters on at night, because they simply can't pay their energy bills anymore due to a lack of investment in the electricity industry in Australia, fuelled by the policy uncertainty generated by this government and the fact that it just can't agree on a clean energy target. By supporting cuts to penalty rates, it's talking about again making it harder for workers to make ends meet. It does everything in its capacity to make it harder for unions to collectively bargain and represent workers in particular industries, but it is willing to give a big tax cut to multinational corporations.

It's instructive that the minister that spoke before me in support of this particular piece of legislation was quoting the Business Council of Australia. I mean, are you kidding me? They're really in touch with the average pensioner, the average Australian worker and the Australian battling family in rural and regional Australia, aren't they? The Business Council of Australia! Of course they're going to support tax cuts for their large multinational members, and what these tax cuts mean is more profits for those businesses.

If you look at the profit share of income in Australia over the last decade, you see it's been growing for big businesses and it has been shrinking for wage earners. Big businesses have been getting more profits. For Australian workers that work their backsides off day in, day out, week in, week out to earn money for their families, their share of GDP in this country has been shrinking, and this bill will make it worse. This bill will exacerbate the inequality that exists in Australia when it comes to incomes. Is it any wonder that Australian pensioners, workers and their families are just sick to death? They are sick to death of the growing inequality in this country and feeling left behind by change and by government reform of this nature.

Schedule 1 of this bill amends the Income Tax Rates Act and progressively extends the lower 27½ per cent corporate tax rate to all corporate entities by 2023-24. The corporate tax rate would then be cut for all corporate tax entities to 27 per cent from 2024-25, 26 per cent from 2025-26, and 25 per cent from 2026-27. Schedules 2 to 4 make consequential amendments to the income tax laws to reflect the extension of the reduction in the corporate tax rate to all corporate entities.

This government has made no secret of its campaign to provide these tax cuts for big multinational corporations while people on low to middle incomes in Australia are struggling to make ends meet. You need look no further than the disastrous $65 billion company tax cut to see just how the Turnbull government likes and treats its mates in big business. According to Treasury modelling, the government's company tax cuts will generate 0.1 per cent—not one per cent—economic growth in Australia and will generate next to no jobs. This is the Treasury's own modelling. It shows that there is no economic benefit at all from these tax cuts. So you would have to ask the question: if you are about jobs and growth in this country, why are you doing this when there is no demonstrable benefit at all for our economy? The reason is those on that side of the chamber want to do all they can to back big business at the expense of hardworking Australian tax-paying families, workers and pensioners. It is about who they line up with and who they support. This policy and this bill clearly demonstrate that.

Some of the companies that will benefit from this, in fact, some of the biggest beneficiaries from this will be the big four Australian banks. And haven't they done a wonderful job over the last decade in providing quality services for Australian workers, their families and pensioners, restoring confidence in the Australian banking industry, taking care of Australians and ensuring that they are treating them with the respect that they deserve? We've seen scandal after scandal in the CommInsure scandal and the wealth management scandal that all the banks have been involved in. Most recently, we saw the allegations levelled against the Commonwealth Bank of Australia by AUSTRAC in respect of potential breaches of Australia's anti-money laundering and terrorism financing laws. Yet these are the people that this government wants to give and believes deserve a tax cut in the nature of five per cent over the course of the next decade.

What this government should be giving the banks isn't a tax cut; they should be giving them a royal commission. We should be getting to the bottom of what's going on in the banking sector and why the average Australian has been ripped off by the banks over the course of the last decade. Many Australian families have suffered much pain and indignity at the hands of the banks. Again, I notice that the shadow minister, in introducing his comments to this bill, didn't quote any small businesses. It was all about what big business associations want with these tax cuts, but not small businesses, because there are plenty of small businesses that have been done over by the banks in this country. They want a royal commission. They want their voice to be heard, their situation to be aired, and justice and compensation delivered. They're not going to get it from this government. What they are going to get from this government is a multibillion-dollar handout for big business in the form of a $56 billion tax cut over the course of the next decade.

Never mind the fact that the budget is in a perilous state, that the deficit is increasing year on year and that debt in Australia is increasing year on year. What happened to the so-called budget emergency? That's all forgotten about. With this particular measure, initially they said ripped about $56 billion out of the budget. Under questioning from the shadow Treasurer in question time, they admitted that it was closer to $64 billion. How is that money going to be replaced? Where is that money going to come into the budget to ensure that we're funding a decent education system so that we give kids the opportunity to get a decent trade and go to university? How are we going to be able to fund the additional healthcare services and aged-care places that we are going to need as our population ages?

The view of those opposite is, 'Don't worry. Don't worry. Trickle-down economics will kick in. We provide these tax cuts for big multinational corporations. They earn more money. Guess what? They start investing more and employing more.' The Treasury's own modelling demonstrates that that's not a cogent argument. That's a false argument. There is no economic benefit in these tax cuts at all. They won't deliver additional employment. This notion of trickle-down economics is utter rubbish. It simply does not work.

You only need to ask an auto worker or a middle-income service worker in the United States what they think about trickle-down economics, which the Reagan administration and the Bush administration specialised in. They've got nothing out of it. They haven't had real wage increases in the United States for the last 30 years, because of trickle-down economics, and this Turnbull government wants to introduce these policies here, into Australia.

Wages growth in Australia is struggling. For private sector agreements approved in the March quarter, wage rises fell to 2.7 per cent, and they fell to 2.4 per cent in the public sector. Wage rises in the private sector haven't been so low since 1991. Across both private and public sectors, wage increases have only been around 2.7 per cent. They've dropped from 3.1 per cent in the December quarter. We've got underemployment and an increase in casualisation, and living standards are stagnating. Apprentice numbers have collapsed. It's harder than ever for a young Australian to enter the housing market, and this government's plan to help people battling to get into the housing market is to provide a big tax cut for some of the big banks that have made it harder for people to get home loans.

The housing market in the area that I represent is out of control. It's gone through the roof. That's the case in Sydney and Melbourne. This government just wants to ignore the fact that many young Australians simply won't be able to enter the housing market. They simply will not be able to afford to own their own home unless they have rich parents, and that's the view of the Prime Minister: you should just get your mum and dad to give you a leg-up and to help you out with a deposit on a home. Well, ask a single mum living in Western Sydney with a couple of kids who's working on weekends who's about to have her penalty rates cut about whether or not she can afford to give a leg-up to her kids. Ask a family working in south-west Sydney who are struggling to make ends meet about whether or not they can afford to just hand on a deposit to their kids.

Again, if the government were serious about tackling some of the inconsistencies and the inequity in the housing market, they would tackle negative gearing and capital gains tax discounts, because the overwhelming majority of those tax concessions go to the wealthiest Australians. In fact, 70 per cent of the benefits of the capital gains tax discount go to the top 10 per cent of income earners in this country. That fact alone says everything about what is wrong with the Australian housing market at the moment, why it's an investors' market and why young families can't afford to buy their own home.

And the government want to give a tax cut to the big banks that are fuelling and financing that. It comes on the back of their strategy of giving millionaires a $16½ thousand tax cut in the last budget but making someone that's on less than $64,000 a year pay an additional $320-odd in tax.

We've seen that low-income workers who work in the hospitality sector and who work on weekends stand to lose up to $77 a week through the cuts to penalty rates, supported and cheered on by this government. In the electorate of Kingsford Smith, there are 11½ thousand retail and hospitality workers who stand to lose money and receive a pay cut because of that decision of the Fair Work Commission.

I was pleased to recently meet with a group of hairdressers, some from my community, who are fighting the fact that their industry is next on the chopping block. Their industry association is now using the precedent that was set by the penalty rates decision in the hospitality and retail industry to flow it on to other industries, including hairdressers. We warned people that this would occur, that it wasn't just confined to those industries. They're seeking now to flow it on to hairdressing, and you can bet your life that it will continue to flow on and that, despite what this government said, yes, nurses and, yes, emergency service workers, those people in vital occupations that rely on shiftwork, will be in the firing line in the future. There's no doubt about that if this Turnbull government gets its way and if its philosophy of taking money from hardworking Australians by cuts to penalty rates and other conditions is met.

In conclusion, this bill represents everything that is wrong with this Turnbull government in terms of its twisted priorities. Not only does it take about $60-odd billion out of the budget at a time when we've got an increasing budget deficit and increasing debt in this country but it also ensures that the biggest businesses, many of whom are unworthy of a tax cut, receive that tax cut. They won't pass it on in the form of new investment—

Debate interrupted.

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