Milton Dick (Oxley, Australian Labor Party) Share this | Hansard source

Here we go again. The government is once again trying to ram through its $65-billion big-business tax cuts, when we know that this has already been rejected by the Senate. We know that the government doesn't like listening. We know that the government—and the Prime Minister—has a tin ear when it comes to delivering economic reform, let alone energy reform. But, when it comes to the government having laser-like focus on an achievement, it is not reform of the energy, health or education sectors. It is the sole mission for and in the DNA of, it appears, every member of this government to do everything possible to give relief not to middle- and low-income working Australians—the hardworking men and women of Australia that I represent and that every single member in this place represents—but to large corporations and big business. That is their objective and clear intent. I know that, and my community and the people of Australia know that.

I want to remind the House of some of the actions of this government and what they've put on the table to pay for the legislation that we're dealing with today: cuts to families, through changes to family tax benefits; cuts to pensions, through scrapping the energy supplement, which I'll come back to; cuts to jobseekers, forcing them to wait for Newstart; cuts to young people, forcing them from Newstart onto youth allowance; and cuts to new parents and families, through changes to paid parental leave. The last time we debated this and the last time I spoke in the parliament about this—the very same week in which we saw tax cuts for millionaires and huge relief for large corporations—this government voted to cut the energy supplement for pensioners in this country. The same week!

I would sometimes like to give the government some advice about claiming fairness. Who can forget the leaked report about the budget that was brought down earlier this year—I guess it was from yet another hit inside the government; there are so many of them—revealing that the government had spent over $100,000 in market research testing about what should be in the budget. They didn't go to a town hall, like the Leader of the Opposition will do. They didn't travel the country, listening to what's happening to communities and small-business groups or what's happening on the ground. They paid for market research testing to tell them what to put in the budget. And you know what it found? The research, paid for courtesy of the taxpayer, showed that the word 'fairness' should be used. The government had to be told to use the word 'fairness' in a budget that delivered a tax cut to large multinational companies and millionaires in this country while increasing taxes—not even keeping them the same—for working people and people who are making do, getting by and keeping their head above water. So much for the Liberal-National Party being 'the party of low tax' and 'the party of small government'. That's rubbish; it's nonsense. In this budget, tens of thousands of people in my electorate, earning less than $80,000 a year, will get a tax increase. And, at the same time, they've got to watch a tax cut to large multinational companies. We know that when the big end of town says 'jump', this government says, 'How high?'

Despite this obviously extreme, right-wing agenda that has now taken over the government and that has been building up for the last four years now, what does the economic modelling say about the $65 billion handout? It says it's a waste of time and a waste of money. Not only are we seeing that the cost to taxpayers is a further $600 million over the forward estimates and $36.5 billion over the medium term, as outlined in the budget papers; on top of this, we're going to have annual, ongoing costs of $8.3 billion.

It doesn't stop there. New calculations show that this big-business tax cut will also cost the Australian people an extra $4 billion in interest charges. That equates to around $162 for every single man, woman and child in the entire nation. The total interest bill will hit over half a billion dollars in 2021 before blowing out to beyond $1 billion in 2023-24. These are simply staggering statistics. Surely, the government must have something to show for this incredible handout of taxpayers' money. Treasury analysis released by the government on budget night said that, as a result of big-business tax cuts, that the economy will be—wait for it—potentially one per cent bigger as a result. It is forgoing the revenue that would have paid for things like health, schools, adequate social security and family support, support for our ADF and support for a homelessness and housing strategy—let alone the NBN, but I don't have enough hours in the day to talk about the government's failure on the NBN.

What we're doing is asking this parliament—which has already rejected these cuts, as the Senate has rejected them—to then say, 'No, trust us; we are going to grow the economy, potentially by one per cent.' But that one per cent is over a decade. It's a bit like the latest so-called guarantee of the energy policy. The government is saying it's going to be a guarantee. There's no economic modelling to show that it is a guarantee, but the government is expecting us to agree when they say, 'We have all the answers. We know best. We are going to deliver, at best, a 50 cent reduction to the people of Australia in 2020.' This government is just going from the ridiculous to the absurd.

The one per cent is over a decade. But the decade I refer to begins at the end of the decade of tax cuts. That means the one per cent dividend claimed is actually around 20 years away. That's 20 years of waiting before the Australian people see growth of just one per cent, while the budget is $8.3 billion worse off per year and the Australian people are slugged with an interest bill of $4 billion a year.

We've already seen a Treasury research paper that predicts these company tax cuts are likely to increase company incomes by a mere 0.6 per cent over the long term. Further to this, the paper also suggests it will take 20 years for the economic benefits of these company tax cuts to have any long-term value, with half the benefit coming in 10 years. Given the large component of corporate tax cuts only starts to take effect in 2022, Australia will be waiting 25 years for a 0.6 per cent increase in incomes. While we're waiting for this to happen, a report by the UTS says more than 40 per cent of the $65 billion handout will go offshore to investors of multinational corporations and foreign tax authorities. This is even before I start on the big banks.

We all know that giving corporate tax cuts really pales into insignificance when compared to the protection racket, as I like to call it, that this government operates around big banks. Just recently, the Commonwealth Bank reported a near $10 billion profit—and this Prime Minister and Treasurer think that they deserve a handout from the Australian taxpayer to further enhance the bottom line of the CBA. In the same week that this occurred, the financial intelligence agency AUSTRAC filed claims in the Federal Court which state that the bank broke the law up to 54,000 times by failing to report suspicious transactions on time.

We know that the government is out of touch, and the community is seeing this. You only need to look at Newspoll, which has shown consistently 21 times why this government is out of touch and why this Prime Minister is losing support across Australia. We know that the plan to cut payments to families, pensioners, new parents, young people, students, people with a disability and jobseekers is on one side and on the other side is the plan to ensure that large corporate Australia somehow, magically, mythically, will deliver a trickle-down approach to provide long-term economic reform. With all this money being splashed about by the government to big business, it's clear for everyone to see where the government's priorities lie. I'll tell you it's not with Australian families, pensioners or any person needing a hand; it's with big business and the banks. To pay for the corporate handout, we know that there will be a whole range of cuts. For a government that's been in power for over four years and promising Australians that there are better days ahead, well, my community and the rest of Australia would like to know where are the better days ahead? It's certainly not in energy policy. It's certainly not anything to do with the NBN. It's not certainly to do with jobs or wages growth. And it's certainly not anything to do with inequality, which we're seeing at a 75-year high.

We have recently seen wages and salaries grow by just 0.7 per cent in the three months to June and by only 2.1 per cent over this year. We know that this increase, however, was driven by a jump in the number of hours worked rather than pay increases. The true figures show that the average compensation of employees declined 0.1 per cent for the quarter and climbed just 0.1 per cent over the year. Real net disposable income per capita—the best measure of potential living standards—slipped by 1.4 per cent. What did the Treasurer make of this? He said, 'Well, a substantial lift in wages would have to wait until a sustained improvement in profits.' If the Treasurer bothered to check, he'd know that earlier this year company profits rose by more than 30 per cent in the year to March, the best result in 33 years; while wages rose only 1.5 per cent, leaving the share of wages and national income at 51.5 per cent—the equal lowest level since the early 1960s. On top of this, new data released in the June quarter found that annual growth in compensation per hour fell over the June quarter from 1.1 per cent to minus 1.3 per cent—the weakest growth in 25 years.

While the government can claim that more jobs are being created, they are also coming with record low wages. Capital Economics chief economist Paul Dales said the wage figures were even worse when broken down to average employee compensation per hour and that 'there is no evidence whatsoever that wage growth has started to rise'. What does all that mean? Out in the community people are struggling. People are finding it hard to make ends meet with the rising cost of living and the rising cost of energy prices. The government's solution to the energy crisis is to give a 50c per week reduction in energy costs—pushing out to the 2020s. I don't know about you, Madam Deputy Speaker, but when I return to the electorate of Oxley this weekend and when I visit community groups with the big headline news that the energy policy of this government will deliver a saving of 50c a week—perhaps by 2020—I don't think that's going cut it. In fact, I know that's not going to cut it. When I go to small businesses and say, 'The great energy policy unveiled by the Turnbull government this week will deliver you a reduction of 50c a week,' I know that's not going to cut it. I know that people will say to me: 'You've got to be kidding. That's as good as it gets?'

With the package of bills before us today, we know that, when it comes to the government's priorities, it is not about delivering real reform for the economy; it is not about dealing with inequality; it is not about tackling the low wages growth that we are seeing year-in year-out. But we do know that small business needs support. Labor has supported the cut in company tax for small businesses to 28.5 per cent and will support a further cut to 27.5 per cent—covering all small businesses, who represent 83 per cent of Australian companies. Labor is very clearly on the side of genuine small business. I come from a small-business background. I know what it's like because my parents ran businesses. I know what it was like because I saw the struggle that they went through. We need to do more to support small businesses. I recognise that the 8,748 small businesses in my electorate are the backbone of our local economy. I know, from my parents and from when my father ran a business, how critical it is for government to be there when it's needed but also to get out of the road for businesses to be able to grow, to support the local economy and, more importantly, to grow employment in the local economy. But billion-dollar corporations and businesses do not need, at this time, a handout. They do not need assistance. When I speak to the people I represent, including community groups and chambers of commerce, and I say, 'I'm on your side; I'm supporting a tax cut for you; I don't support large, multinational companies getting a tax cut,' I know where they stand.

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