Matt Keogh (Burt, Australian Labor Party) Share this | Hansard source

The people of my electorate of Burt sent me to this place to represent their best interests, and the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 has nothing to do with the best interests of my electors, let alone the nation, whatsoever. This corporate tax cut is not a plan for jobs and growth, as the government has continually tried to allege, in any way whatsoever. In fact, it's almost the opposite, and now it has this great new phrase about how 'better days are ahead'. Well, the only better days ahead that will confront this nation will be when we have the election of a Labor government. Jobs and growth are not what will be created here at all. The whole premise of what the government is trying to create here at this time is based on what we know as trickle-down economics—something that has been fundamentally shown to not work at all, in any way, by economists around the globe. Maybe it's not that surprising that a conservative government is relying on an economic strategy from decades and decades ago that has since been shown to not work in any way whatsoever and will have no positive impact on what we need to have happening in our economy right now.

The thing that we need to look at when it comes to these policy ideas and when it comes to the approach of the government is: what are we also giving up? What are the priorities that the government are setting out by establishing this tax agenda? It's interesting to see what approach this sits next to. In addition to deciding that they want to reduce the amount of tax that is going to be charged to corporate Australia—to large taxpayers—they've also decided that it would be a neat thing to not help those people who rely on Sunday penalty rates and to not oppose cuts to those rates. Instead they thought: 'That's okay, we'll let that go through. We'll let the lowest-paid Australians cop it in the neck and be paid even less, and while we are at it, we'll increase the amount of tax that they have to pay as well by increasing the Medicare levy at the same time for all people.' Instead of looking at those who are most able to afford to pay, they decided to attack those who are already being attacked when it comes to penalty rates. For those trying to make sure that they can get ahead further by getting a higher education, they will charge them even more to go to university, making it even harder for people to get ahead and to provide for their families.

It is an interesting contrast, when you think about it. They want to give a tax cut to big business that is going to cost the budget bottom line over the next decade over $36 billion. That's $600 million in just the next four years. I haven't done the proper maths, but that's about four or five surveys that you could conduct for that in the next four years. I'm worried what the government might do with that. But let's think about this. The government has come out and said: 'We are doing this to create economic growth. We are going to create jobs by having this tax cut.' Yet, there is absolutely no evidence to back that claim up. In fact, the Australia Institute is saying there's no evidence to suggest that lower rates will increase economic growth. The Grattan Institute has released a report that shows that this will have no positive effect on the Australian economy. The government is committing to a tax cut that's going to cost over $36 billion over the next 10 years when they are yet to deliver or explain any plan about how they are going to get the budget towards a trajectory of getting into the black. All this government has done, now in its fifth year of government, is preside over budgets that are making debt higher and our deficits worse. And their plan is to give a massive tax cut to make the budget situation even worse, when there is no evidence to suggest that this will actually help economic growth. At the same time, they are making the lives of ordinary Australians even harder by increasing the amount of tax they have to pay. For those that are relying on penalty rates, they are not helping or supporting them either.

One of the other arguments that the government likes to talk about is this notion of international competitiveness. They say that we need to cut the corporate tax rate for large businesses to ensure that we are an internationally competitive economy. I don't know if they've looked at any of the statistics, but there's clearly no problem in attracting international investment into Australia right now.

As we've seen, the Tax Foundation looked at this. They looked at our tax competitiveness and where Australia ranks in the OECD. When you take this into account, as this government clearly fails to understand when it comes to international competitiveness for investment, the headline tax rate is not the issue in question. You would think that, of all people, this Prime Minister, a former investment banker, would understand that the headline corporate tax rate is not, on its own, the issue that needs to be looked at when it comes to foreign investment. There are so many other rates of tax, costs and other factors that need to be considered—exchange rates even—by a foreign investor when it comes to working out if they want to make an investment in this nation. The headline tax rate is not the issue. Look at our competitiveness around the world, as the Tax Foundation did. When you take all of this into consideration Australia is ranked seventh among the 34 OECD member countries. We're not down in the thirties, we're not in some uncompetitive doldrums; when it comes to international competitiveness for foreign investment, we are at the top—as is plainly evident in any of the statistics that are published about how we manage to finance our growing economy in this nation.

That really highlights the problem and it shows how this government is really only driven by ideology and trying to pander to their on pre-selectors and supporters when it comes to the agenda that they're driving on taxation. The other thing that's clearly been ignored by this government when it comes to decreasing the rate of company tax is the impact on Australian shareholders and Australian investors. One of the things you need to think about is: who does this fundamentally benefit in any event?

Normally you might expect that companies pay company tax and that dividends, if they pay them, would be taxed in the hands of the recipient at the recipient's tax rate. However, in Australia we have this uniquely great thing called the dividend imputation system, which gives shareholders a credit for the company tax deemed to have been paid on that individual shareholder's behalf. What does that actually mean? For an Australian investor, this simply means that the amount of tax that is withheld on behalf of dividend recipients is reduced. So come 30 June—tax time—those shareholders only have to top up the tax liability based on their own income assessment. However, foreign shareholders stand to benefit from this great proposed tax cut for corporations because they will see the full benefit passed through to them.

There is no actual benefit for the local shareholder; it is all for the foreign shareholder. And, as I have just outlined, we don't have a problem with foreign tax competitiveness. Given the situation we are facing with unemployment rates around the country, especially in my home state of Western Australia where we have seen the mining construction boom come off the boil, we are trying to make sure that we are getting more and more people into employment. When you look behind the employment figure, you see that participation rates are a problem. We have people who want more work. But who's the government trying to support? Foreign shareholders. 'That's great, government. Thank you so much so much,' says the ordinary man on the street in the federal electorate of Burt, let me tell you.

When it comes down to these tax cuts, when they are properly assessed and considered, they are not helping people here in Australia at all. They are not going to make a difference to our economy. They are not going to create jobs. They are not going to help the people who need it most. It stands in contrast to the way that this government has approached pretty much everything it has done. It just goes to show—and it should be a reminder to everyone when they are thinking about these corporate tax cuts that the government is putting forward—that this government prioritises giving a tax cut to big business. This is a tax cut for big business. It is not a small business tax cut. This is a big business tax cut!

The government wants to give big business, foreign shareholders, a tax cut. At the other end, it wants to take away people's penalty rates, cut funding to schools and make it harder to go to university. It wants to increase the rate of taxation on ordinary working Australians and, to top it all off—and I'm sure the member for Fremantle, who is behind me, will agree with this point—it is doing nothing whatsoever to fix the GST situation for Western Australia. All it is doing is cutting taxes for foreign investors and big business. It is doing nothing for ordinary Australians. That highlights the wrong priorities of this government. It shows that they are doing nothing to support the people who need it most in this country.

What is the purpose of government? What are they doing? Why are they here? You really can't work it out, other than to say it is to help their big business mates. They are a shemozzle. As astounding as all of this is, it is not that surprising. That is why we cannot support this legislation.

See this speech in context