Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Hansard source

As my colleague so ably said, the fact that the government is pursuing these big-business tax cuts shows how wrong their priorities truly are. Not only are they intent on continuing to push their big-business tax cuts; they also have gotten rid of the deficit levy whilst we have a deficit, so they're giving high-income earners a tax cut as well. At the same time, with their increase to the Medicare levy, they're giving ordinary workers a tax rise. They want to give big businesses $65 billion in tax cuts and they want ordinary workers who earn $21,000 to have a tax increase. How is that fair? How is it that this government thinks that this is okay? How is it fair that this government continually attacks working people in Australia? How is it fair that this government wants to believe in trickle-down economics and wants to believe in the jobs-and-growth plan that it keeps talking about, where businesses are going to employ more people if the government gets this through?

We saw the Business Council of Australia in the media today saying, 'We really need this. Australia has one of the biggest taxes on companies in the world. People won't invest and we're not going to get the jobs if this doesn't happen.' But the RBA Assistant Governor has belled the cat on that today. The Reserve Bank Assistant Governor, Luci Ellis, said that the corporate tax rate in Australia was 'irrelevant' for domestic investors because of our system of dividend imputation. Indeed, she said that the tax rate was only one of many variables considered by foreign companies who want to come and invest in Australia. She said that one of the things that actually impacts is the investment that we've seen in recent years over the mining boom because we have the resources. Multinational companies are coming here because we have the resources, not because of our tax rate, and we had that mining boom at a time when we had the tax rate we've currently got. Ms Ellis said that, when foreign companies are making these decisions on where to invest, they consider many variables, including the tax rate, the business environment, the rule of law, the educational base of the country and where the resources are. That's what international companies and companies that are going to invest in our country are making decisions on.

Not only that, the claim that we are one of the highest-taxing nations in the world when it comes to company tax is simply not true. If you look at the United States' Congressional Budget Office's paper, put out earlier this year, it shows that Australia is actually down here when it comes to corporate tax rates. That's what it says, because that is the truth. It says:

Because of their broader scope, average and effective corporate tax rates are better indicators of a company's incentives to invest in a particular country than is the statutory corporate tax rate.

It points out that, while there is a headline rate of 30 per cent in Australia in 2012, the average rate for Australian companies was 17 per cent. Because of the reforms that we supported, we're getting a bit of transparency now about how much tax some of these companies are actually paying in Australia. Some Australians are quite shocked when they see that published list. They see that some of the companies that are in Australia are actually paying very, very little tax. Indeed, some of them pay zero tax. To come in here and claim that these companies need this tax rate when some of them don't even pay any tax, and some of them pay very little tax, is ludicrous. To say that this is going to increase jobs in the economy is simply not true, but the government continues with these warped priorities and continues to insist that this is the only way forward.

We have our own priorities on this side. We're going to prioritise other things, like properly funding our schools, which is what the government said it would do. We all remember the government said it was on a unity ticket with Labor when it came to investing in children's education. The funding wouldn't change depending on who won government. We all remember it well. There were people out there with their signs saying that the government was going to invest in schools and education, just like Labor was. We now know that that's not true.

Another of our priorities is infrastructure. In my home state in Tasmania, we've seen no new infrastructure projects under this government—not one. The only infrastructure projects that have occurred in Tasmania are ones that were funded in Labor's plan in 2013 and ones that Labor committed to, and the government had to copy us in election campaigns. That is it. That is all the government has invested when it comes to infrastructure in Tasmania—no new plans, no investments.

On our side, one of our other priorities is having a real fairer tax system. That is, a tax system that leads to dealing with some of the inequities in the system. We have said very clearly that we want to deal with the superannuation tax concessions. We've said very clearly that we want to level the playing field for first home buyers through reforms to negative gearing and capital gains tax. Of course, we believe that the housing issue in Australia and housing affordability are a serious issues that need to be addressed by the government, and we've seen very little from the government in this regard.

Another one of our priorities in our fairer tax system is capping the deductions that people can obtain for managing their own tax affairs. We've also recently announced our plan to impose a minimum 30 per cent tax on discretionary trusts to deal with some of the issues around income splitting. So it's not like we're shying away from the hard decisions. We are making our tax system fairer. We want to do that. But, of course, the government is the one that is pursuing this $65 billion tax cut rather than investing that money where it should be—in infrastructure, in schools and in other areas.

If you want to talk about the government's inaction, there's no clearer way to do that than to talk about the portfolio that I'm the shadow minister for—ageing. The government in recent weeks has had a review into the Living Longer Living Better reforms that Labor instituted when we were last in government. It has had, for the first time, data about home-care packages—the packages for older Australians so that they can stay in their own homes for longer and get the support that they need. When the government released the David Tune report into Living Longer Living Better and it finally released the data that I've been calling for since March, what has become evident for the waiting lists for home-care packages is that more than 90,000 Australians—vulnerable, frail Australians—are waiting for care packages so that they can get support to stay at home. The sad reality is that those people are going to be waiting some time for those packages.

This would be a great investment from the government, rather than giving $65 billion in tax cuts to big business. This is the sort of thing a government should invest in. Not only does it actually save the system money; it's actually a better outcome for the individuals, their families and carers. It also creates jobs. One of the fastest sectors for jobs growth in this country is health care—and, indeed, aged care. We're going to need a lot more workers to look after our changing demographic and our population. So it would be a very sound investment. Instead, what we've seen is no further investment from the government, but they will release an extra 6,000 packages. So that's only 6,000 packages to deal with over 90,000 people waiting on that list. That's just one example of where the government could spend some of the $65 billion it wants to give away to business. That's what the government keeps talking about—this trickle-down effect. They say, 'It will create all the jobs. This is our priority.' But it's simply not going to work. It's not going to work the way we are in Australia at the moment—for today's economy and for the situation that we face in Australia today.

One of the issues that keeps getting raised when it comes to jobs in Australia at the moment is wages growth, or the lack of it. We've seen some of the big companies pay very little or no tax. Already, they're not investing in their people and their workforce to the level that they should. But we've seen a campaign to reduce penalty rates from some of the businesses in Australia. We've also seen people not willing to give workers the pay rises that they deserve. We've also seen—and this is really interesting—that the link between increased productivity and increased wages appears to no longer correlate the way that it used to. That is because of technology and the changing workforce as technology is occurring in our system. We need to deal with that. We need to find a way to ensure that Australians have secure, well-paid jobs so that they can function and have confidence in their own investments and in their own family life. It's a very serious issue that there are so many Australians in casual and insecure work. This is something the government could tackle. Giving $65 billion in tax cuts to big businesses is not the way to tackle it. It will not do anything to help those workers who are vulnerable in insecure jobs, who are out there working really hard and who are also having their penalty rates attacked. If the government wants to do something about wages growth, cutting people's actual take-home pay is not the way to go about it.

We have seen support from unions for workers in the High Court and the decision that has happened with the Fair Work Commission. On our side of politics, we've said that we would intervene to change Fair Work Australia's essential regulations to make sure that workers cannot have their take-home pay cut. We don't want to see workers who are already in casual and insecure work have their take-home pay cut when they're working unsociable hours on the days that other people don't want to work—the days that other people want to spend with their families. How is cutting their pay going to help the economy? These people are often 100 per cent consumers: everything they earn, they spend in their local economies, which creates jobs. I don't understand why the government wants to continually attack workers on the one hand, while, on the other hand, saying that, if we give big business a tax cut, we'll end up with more jobs for the workers. It just doesn't correlate.

Trickle-down economics has failed in the past. I don't understand why the government is so attached to it and why it thinks it's going to work in this instance. I really cannot see why the government is so attached to this big-business tax cut. I'm curious as to whether it thinks it's going to be able to get it through the Senate. Of course, we don't yet know what sort of deals it's doing to try and achieve that. Clearly, there are some issues, and the crossbenchers and Labor in the Senate have stated our position on this bill. We don't believe that big business needs this tax cut, and we don't think it's affordable, given Australia's current financial position. We have said very clearly that there are other priorities, such as investing in education and infrastructure. We've said very clearly that we have our own plan for a fairer tax system that ensures that Australians who are doing it tough are rewarded, not given the tax increase that the current government is proposing for ordinary workers who earn more than $21,000. We have a completely different plan to the government's.

It's interesting when you go out and talk to constituents, because constituents are awake to this. You go to any town hall meeting, community meeting or mobile office in your electorate and the constituents are really concerned that the government is continuing to pursue this big-business tax cut. They know it's the wrong priority, and I'm amazed that some of the backbenchers on the government side, particularly those who are sitting in marginal seats, are not telling the Prime Minister and the senior ministers this. I'm amazed that they are not hearing people in their constituencies say that this big-business tax cut is the wrong priority at this time. I would be very amazed if the local member over there doesn't hear it from his constituents. Think about what that $65 billion could do if it were invested in children's education, health or infrastructure. Those things would create more jobs and be more productive for Australia's long-term future than a simple big-business tax cut. That's what my constituents are saying, and I am really surprised that the backbench and the marginal seat holders on the other side are not telling their leadership that this is the wrong priority. Australians know it's the wrong priority, and I'm sure those members are hearing it out and about in their electorates. I would be very surprised if they could stand up in this place and say, 'I have no constituents that are concerned about whether this $65 billion tax cut is a good idea at this time.' I would be very surprised if their constituents aren't saying, 'That's the wrong priority.'

If you're going to give $65 billion away, don't give it to big business; give it to the little people. Give it to the workers. Give it to the kids in the schools. Give it to the patients in the hospitals. Spend it where it's really needed. This is not where it's really needed, and it won't make a big difference to these businesses at this time. As I said, many of these businesses don't pay the full tax rate anyway. Many don't pay the amount of tax that we believe they should and some are paying zero tax. We know that is not right. We need a fairer tax system for Australia, but this is not the way to go about it. It can be done in a better way, and the government should abandon this idea and do it properly.

See this speech in context