Cathy O'Toole (Herbert, Australian Labor Party) Share this | Hansard source

I rise in this place today to ask the Turnbull government one very simple question. Is this government kidding, giving a $65 billion tax cut to big business? Is the Turnbull government so out of touch with the Australian people that it honestly believes that giving a big tax cut to big business is what this country needs to move forward? This government needs a reality check, and I am more than happy to provide it. Prime Minister Malcolm Turnbull and Treasurer Scott Morrison, listen carefully to these facts. Growing inequality in this country is one of our fastest growing concerns, and the government should be addressing it. Inequality is at a 70-year high. More than 105,000 people are homeless. One-third of Australian aged pensioners are living in poverty. Thirty-two per cent of unemployed people live in poverty, and the HILDA report showed that child poverty is growing. Wage growth hasn't been this low since the retention of records began.

The Australian Bureau of Statistics has collected data since 1975 on earnings inequality. Profits have gone up by 40 per cent, but wages have gone up by less than two per cent. Real wages have grown by 72 per cent for the top 10 per cent of earners—in 1975 they earned twice as much as the bottom 10 per cent, but by 2014 it was nearly three times as much. If low-wage earners had enjoyed the same percentage gains as the highest paid, they would be $16,000 a year better off. The richest one per cent of Australians own more wealth than the bottom 70 per cent of Australians combined. For every dollar a male earns, a woman earns 82c. A total of 678 corporations and 48 millionaires paid no tax. How completely messed up are the Turnbull government's priorities! It wants to give a $65 billion tax cut to big business and not address homelessness and stagnant wage growth or assist Australians living in poverty. What kind of government does that? It is an out of touch, out of its mind, incompetent, right-wing government.

And then there are the facts about my community of Herbert. We are a strong and resilient community, and we have experienced our fair share of knocks. But the Turnbull government is insistent on kicking us while we are down. Unemployment in Townsville is at 8.9 per cent. Youth unemployment is just under 25 per cent. To add to those very high unemployment figures, we also have a very high underemployment situation. Personal insolvency is amongst some of the highest rates in the country. We are drought declared and on level 3 water restrictions. Our electricity prices have skyrocketed, with some local businesses even choosing not to run their air conditioners in 33-degree heat. Yes, there are projects coming, and yes, there is light at the end of the tunnel. Even so, there is still serious concern over the potential lack of skills to deliver those projects, and that includes apprentices and trainees, a fact that is definitely not helped by the Turnbull government's more than $2 billion cut to TAFE.

Because of our community's get-back-up-and-get-going, never-say-die attitude, we will come through these challenges. But our success and survival will not come from the Turnbull government. It will come because we work hard and we are resilient. It will come from federal Labor backing and supporting our community with $100 million towards vital water infrastructure. The vision for our community will come from a federal Labor government, which has committed $200 million towards hydropower on the Burdekin Falls Dam. It will come from strong investment by the Queensland Labor government, which has also invested in water, infrastructure, roads and the CBD revitalisation. It will come from the local council and local community leaders, like Brad Webb, who have stepped up, united and worked collaboratively to assist in addressing these issues. Most importantly, our survival will be the result of the united Townsville community, who continue to support each other and local businesses through tough times. But assistance to Townsville, our workers, families and pensioners will not come from the Turnbull government's $65 billion tax cut. Interestingly, the assistance that is coming from the Turnbull government will aim to have Australians believe that giving big businesses a tax cut will eventually trickle down to workers' pay packets and create more jobs. The theory of trickle-down economics has been around for over 40 years. I, along with many other workers and families, am still waiting to see exactly what does trickle down, because, at this stage, the only thing that is trickling down is inequality.

The Turnbull government's $65 billion tax cut will have minimal economic impact. It's barely even measurable: one per cent of economic growth in 20 years time, and a $2 a day increase in wages in 20 years time. This is at a time when wages growth has flatlined at a record low of 1.9 per cent. Recently released economic data show that living standards that had been climbing have gone backwards in the last quarter. Australian families are facing a nasty cocktail of rising costs and electricity prices, stalling wages growth and resulting in record-high underemployment, and the Turnbull government has nothing to offer. Labor has long-held concerns about low wages growth. Without a doubt, the dwindling bargaining power of workers and their representatives has played a central role in the stagnation of wages growth and in rising inequality.

At a time when the government have also supported penalty rate cuts from 1 July this year, they also seek to raise income taxes on all taxpayers with an income above $21,000. A worker on $55,000 will pay $275 a year in tax, and for someone on $80,000 it's an extra $400 in tax. How is it fair that a worker on $55,000 a year will pay $275 more when big businesses are paying less. It's clear that, in the form of rising personal income taxes, low- and middle-income Australians are paying for the government's $65 billion handout to big business. This was confirmed by the Parliamentary Budget Office earlier this month, with the PBO saying that:

In addition to the effect of nominal income growth, average tax rates are projected to increase due to policy changes, most notably the policy decision to increase the Medicare Levy from 2019-20.

The PBO projects that the average tax rate on personal income will rise from 22.7 per cent in 2016-17 to 25.9 per cent in 2027-28. This is a government that has totally confused the Robin Hood message, because they take from the poor and give to the rich in the form of taxation.

If the Turnbull government is looking for ideas on how to spend $65 billion that would improve the situation in this country, particularly in my electorate, I have a very long list of ideas. Provide water security for Townsville and match Labor's commitment for $100 million. Provide hydropower generation on the Burdekin Falls Dam and match Labor's commitment of $200 million. Complete the rollout of Labor's NBN, as the NBN will be the greatest new infrastructure for regional, rural and remote Queensland—but only if we have fibre to the curb or premises. Reverse the $401.8 million in cuts to Queensland universities, in particular the $37.1 million cut to James Cook University in North Queensland. Reinstate the cuts to the Townsville Health and Hospital Service. Stop the $300 million in cuts to public dental services, where, across Queensland, waiting lists have blown out to 117,000 people. End the GP freeze on everything—an issue that is holding our doctors and medical practices to ransom. Stop the cuts to pathology. Re-establish Labor's Health Workforce Australia, which was working on retaining doctors in regional, rural and remote areas, because right now in Townsville we are facing a GP registrar crisis. Commit to ongoing funding for the Townsville Salvation Army for the youth drug and alcohol detox facility. End the more than $2 billion in cuts to TAFE. Stop the more than $2 billion in cuts to aged care. Don't raise the working age to 70. Don't cut the energy supplement. Spend more on infrastructure. Commit and sign off on even one project from the Northern Australia Infrastructure Facility. There are a number of ways that $65 billion could be better spent than on a $65 billion big business tax break that will contribute to the growing inequality divide.

Labor have the priorities right. We will ensure we deal with inequality in this country by properly funding needs based funding for schools; investing in job-creating infrastructure; establishing a fairer tax system; dealing with superannuation tax concessions, which is something that we announced late last year and yet somehow the government has now decided that it is a secret superannuation tax; levelling the playing field for first home buyers through reforms to negative gearing and capital gains tax; capping the deductions people can obtain for managing their tax affairs to $3,000; and imposing a minimum 30 per cent tax on discretionary trusts to deal with income splitting—dealing with something that has been in the too-hard basket for far too long.

In contrast we have a government that has its priorities all wrong. It is a government determined to reduce the tax on businesses—big business in particular—while at the same time increasing the tax on everyday working Australians who are just trying to get ahead. Only Labor will stand and fight to eliminate inequality, only Labor will stand up for workers, families and pensioners, and only Labor will deliver a fairer tax system for every citizen in this country.

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