Andrew Giles (Scullin, Australian Labor Party) Share this | Hansard source

It is clear that the reactionaries who run today's Liberal Party, and their boosters in big business, have only one idea when it comes to securing Australia's economic future. It's an old idea and a very bad one. They remain disciples to trickle-down economics. Their only idea is to give more to those who already have quite enough, in the hope—the hope, not the expectation—that some of that may flow through to others and boost economic growth generally. This is despite the fact that these ideas, these policies, have been discredited over the last 30 years—in particular, since the global financial crisis.

But I will say one thing for the person who presently leads the Liberal Party and the government, the Prime Minister. He has been inconsistent, as we know, on just about every matter that he has expressed a view on—on energy, as we are seeing right at the moment, and certainly when it comes to marriage—but he has been a true disciple to neoliberalism. Throughout his political career, he has been a booster of inequality, and we are seeing that most clearly in this bill before the House today, the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017. That's something that serves this parliament poorly, and it would serve Australians poorly but for the firm opposition of the Labor Party—in this place and in the community—to this narrow, bleak agenda for Australia. There is only one idea this government and its boosters have, and that's why Jennifer Westacott, the leader of the Business Council of Australia, has said of this package that there is no plan B—because they can't conceive of one. They can't conceive of a different way forward, of a pathway to inclusive growth, to a more equal Australia. That is what the Labor Party are committed to.

In opposing this legislation, I want to make out the case for that pathway—for sustainable economic growth which is to the benefit of all Australians, not just the few. There is a plan B. There has to be a plan B. The failure of this government to consider alternatives, to consider the evidence, is something for which they stand condemned. When we consider this legislation before the parliament now, we are thinking about what's happening in the Australian economy at the moment. There are three things that are going on that I think are critical to this debate. Firstly, there are record-high company profits—a matter the member for Oxley just touched upon. Secondly, despite this, there are very low levels of reinvestment by those profitable businesses back into their businesses. Thirdly, and most troublingly for me and for most of us on the Labor side of the parliament, there is record-low wages growth.

What does this set of circumstances require? Policies to boost profits further while doing nothing for investment, and certainly nothing to secure reasonable wages growth, are the cornerstone of a plan to increase and exacerbate inequalities of income, wealth and power. That is what this bill represents—a continuation of that extreme neoliberal agenda. We know, on the basis of Treasury modelling, that this plan will also do nothing to secure economic growth. The growth dividend is negligible and almost laughable.

As we debate this bill today, we do so in the context of the warnings of the IMF that Australia has one of the fastest-growing levels of income inequality in the OECD. This is a problem that, on this side of the House, we are determined to solve. But this bill will only exacerbate it further. For me—and, I believe, for my colleague the member for Oxley—this is something which is bad morally. We think extreme levels of inequality are, in themselves, wrong. We also know—and this is what makes this bill and the government's approach so galling—that this isn't simply a question of how we see the world; this is a question of the evidence. We now know that the level of inequality that this bill will advance is actually a drag on economic growth. It's bad for everyone, not just those individuals being left behind by this cruel agenda. This is why there has to be a plan B. This is why I'm so proud to be part of a Labor team that has started to articulate an alternative way forward for the Australian economy and for Australians.

Before I get to some of the elements of that, I want to talk a little bit about the Treasurer, who in this bill—and, indeed, across his handling of his responsibilities—is all over the place. It's so confusing—and, again, also galling—to read reports about how he's embarking upon a new vision to secure inclusive growth. Wrapping himself up in the words of a Labor approach to economic management will not secure that approach. This bill—the narrowness of its vision, the bluntness of its application—underlines exactly that point. I read this morning his second reading speech. He said, 'I will not rest until this agenda has been prosecuted. I will not rest.' He said that on 11 May and we are now in October. Not even in this corner piece of the government's agenda to secure jobs and growth can the government effectively articulate its agenda. We know the commitment is real—we know it is visceral—to push Australia down this path to inequality. But, even on this core item of business, the government can't bring itself to advance its agenda/ Such is its level of dysfunction; such is the level of incompetence and incoherence by the Treasurer and all of the government's economic team.

I touched briefly on the warning the IMF delivered to Australia about the rapid increase in income inequality in Australia right now. I also touched upon the concern that this is not simply a question of the impact on individuals; it has a broader consequence in terms of the managing of our economy. I note again that, very recently—in September, in fact, when I last thought I was going to have the opportunity to speak on this bill, this centrepiece of the government's economic agenda—the Fairfax-Lateral Economics wellbeing index report revealed that the yearly drag on national wellbeing caused by income disparity across the economy had grown by $62 billion over the past decade. This is something which is getting worse, not getting better, even before this approach is legislated. I obviously hope it won't be legislated. Inequality is, as our leader, the member for Maribyrnong, has said, 'the biggest threat to our health as an economy and our cohesion as a society'. That's why we reject the agenda set out in this bill.

Government members describe this as 'the politics of envy', but that flies in the face of reality. It is a cheap and nasty rhetorical device that ignores those three factors that I set out earlier which characterise the Australian economy at the moment: record company profits, a very low level of reinvestment of those profits and record low wages growth. The last two are real problems. The second one, if businesses are doing well, is something that would be welcomed by the Labor side. But I don't think that welcome needs to be accompanied by an additional more than $36 billion handout at a time when our budget is in such structural disarray and when there is no evidence of any connection between those levels of profitability and wider economic benefits—particularly, again, when there is no plan to secure high levels of reinvestment in businesses. Indeed, we would suspect that much of this giveaway would simply be repatriated offshore. Also, there is not even an attempt to connect this to wage outcomes.

There are answers to the problems of wages. I spoke earlier about inequalities of powers as well as inequalities of wealth. Central to fixing this is to restore the balance in our workplaces, taking seriously what's going on in the world of work and restoring the power of workers to bargain effectively and to secure a fair share for their work. That is a problem that Labor is committed to solving, and the member for Gorton will be addressing some of the matters that will go to fixing this problem very shortly.

But we don't get any debate about a fair share from the world of work or from profits that companies are making. Instead we just get this blind adherence to the ideology of trickle-down. Its blindness is such that even voices that are very sympathetic—and very sympathetic, broadly, to this neoliberal agenda in perhaps a milder form—are casting very significant warnings. The government is heedless of the advice of the IMF, of the OECD, of even the World Bank, who are warning against this sort of reckless and irresponsible economic approach. Even the Reserve Bank of Australia has very recently cast very significant doubt—a position that government members should be mindful of—about the supposed benefits of this massive giveaway to big business. If the government isn't troubled by Treasury's advice about the measly growth dividend of the measure contained in this legislation, perhaps they could look beyond the helpful advice of the Business Council of Australia, or perhaps even ask the obvious question, which is: 'She would say that, wouldn't she?', speaking of Ms Westacott. Of course, she is in the business of securing a good deal for her members; good luck to her in that—except to the extent it causes a bad deal for Australians, for working Australians, and, indeed, for the Australian economy.

I think members should go beyond questioning Ms Westacott and should come back to the comments of assistant governor of the Reserve Bank of Australia Luci Ellis, in puncturing the arguments of the Treasurer when it comes to international competitiveness on corporate tax rates. Dr Ellis is a person that government members should have regard to, when she talks about the business environment—which is, of course, a critical factor for multinational businesses in choosing to locate here—the institutional framework, the rule of law, the macroeconomic outlook, and where the resources are. These are matters that are of deep concern to the Australian Labor Party's economic team in seeking to advance upon a race to the top, not a race to the bottom, in securing the future of the Australian economy; in supporting Australian businesses across a wide variety of sectors; in having a proper approach to infrastructure; and in having the confidence to invest in people and in skilling them through schools education, through training, and, obviously, through not short-changing our higher education system—as this government is continuing to seek to do in the face of all the evidence and in the face of great opposition.

On this legislation, the simple idea that it contains is in one sense very easy to rebut. The challenges that face the Australian economy and face Australian society are complex. The answers to them are complex also. But again, they are not to be found in giving more to those who already have enough, and continuing to have blind faith that these benefits will somehow be shared. If we simply look at the cost here, the cost to the budget is extraordinary at a time when we need to seek to effect significant structural repair of Australia's budget—a matter that used to be of concern to government members or, at least, seems to be of concern to them when they are in opposition. The massive giveaway without any dividend in return is extraordinary.

There's been some comparison to some overseas examples, and I want to say two things about that. Firstly, even Donald Trump in proposing company tax cuts sought to extract something in return; here, it's a freebie. It's simply to be taken on trust, and in spite of the evidence. Secondly, I would urge government members also to look to the United States and to have regard to the Congressional Budget Office's research on effective corporate tax rates. We on this side of the House are up for a proper debate about tax, but a debate that is grounded in fact. What matters of course is not the notional rate, but the effective rate. And I'd ask government members to give some consideration to that as they continue down this frolic. The cost is great. Again on the benefit: it is really blind faith that's put before us that this massive giveaway—this multibillion-dollar giveaway—to our biggest companies, at a time when they are enjoying record profits, will deliver return for anything other than the shareholders in those businesses, because we know the growth dividend is almost non-existent.

Lastly, let's also think about the implications of all this for the Australian economy—I've touched on the failure to articulate a pathway to sustainable growth—and for Australian society. We are confident in Australians; that is why we are committed to investing in them and to developing their capabilities. We believe that in the Asian century we can continue to thrive, based on our qualities, our capacities and our capabilities, if we support them with infrastructure, with investment in skills, and with recognising the real pathway to securing Australia's economic future—not this blatant grab; this handout to those who have enough.

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