Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

I move:

That all words after 'That' be omitted with a view to substituting the following words:

'whilst not declining to give the bill a second reading, the House notes the Coalition’s failure to close multinational loopholes and its failure to improve tax haven transparency'.

Labor supports the Treasury Laws Amendment (Income Tax Consolidation Integrity) Bill 2018, which implements a number of sensible amendments to improve the integrity and operation of the consolidation regime. The measures, with the exception of the deferred tax liabilities measure and the securitised assets measure, were originally announced by the former Labor government in 2013-14. The bill implements recommendations made by the Board of Taxation in 2012 and 2013 and reflects consultation carried out by Treasury and the Board of Taxation.

As the second reading amendment makes clear, Labor believes that we need to go further in cracking down on multinational tax avoidance. One in five of Australia's biggest companies paid no tax for at least the past three years. We heard in Senate estimates last night that despite the besmirching of the careful work on the issue of corporate tax paying carried out by Emma Alberici, the ABC's economics correspondent, ABC executives were unable to identify any specific errors in that work.

It is of deep concern to many Australians that the government's biggest economic priority is a budget-busting corporate tax cut that will increase household income, on their own numbers, by 0.1 per cent in the 2030s. 0.1 per cent in the 2030s reflects another month's growth in household income. That is, according to the government's best estimates, the one-off benefit of their budget-busting big business tax cut.

Why does it deliver such small gains? It reflects in part the fact that Australia's corporate tax rate places us in the middle of the G20 pack, according to Congressional Budget Office analysis published in March last year. Our statutory rate places us 10th in the G20. Following the United States' recent tax cut we would be the ninth highest in the G20. But our effective rate places us in the bottom half of the G20 for corporate tax. We, unlike other countries, don't have state corporate income taxes. Unlike most other countries in the G20 or the OECD, we have dividend imputation, a system which gives back about a third of the corporate tax revenue. So from a fiscal perspective, the perspective that the government used to say that they cared about, a corporate tax rate of 30 per cent with dividend imputation raises about as much for the budget as a corporate tax rate of 20 per cent without imputation. Anyone who talks about corporate rate cuts and fails to mention imputation is being deeply disingenuous.

The Liberals said that they cared about the deficit when they were in opposition. Not only did they say it, the now Prime Minister was photographed in front of debt trucks with terrifyingly large numbers—terrifying for him back them, but about half of what he's produced right now. The fact is that the Prime Minister and the Treasurer really don't care about deficits any longer. The attacks on the deficit were all a smokescreen for the cuts to social services in the 2014 budget. They care deeply about the deficit if it's an excuse to take money away from the poorest Australians, but they don't care at all about the deficit when it comes to the debate over corporate tax. When it comes to a big business tax give away of $65 billion, they're not at all worried about the deficit. At least they're not worried now, but of course we know what will happen, because we've seen this playbook before. We know that as the deficit and debt continues to blow out as a result of these corporate income tax cuts, were they to get them through, they would be back in this parliament saying that the real problem with the Australian budget is that social services are 'unaffordable'. 'That's why we have to cut the pension, cut supports to people with disabilities and take money away from sole parents and students.' That's what they would be coming back and saying.

It is the 'starve the beast' strategy that we've seen under the US Republicans for so long. The Republicans in the United States have spoken so often about caring about debt and deficits. But if you look under Ronald Reagan or George W. Bush you see an increase in the deficit. The US Republicans care about debt and deficits as an excuse, a fig leaf, to take money out of the social safety net, but when they're talking about their own tax cuts suddenly they're not worried about debt and deficits at all. We've seen it with President Trump at the moment putting in place a corporate income tax cut which is going to massively add to that country's deficit. And we see it back here in Australia: a Prime Minister getting off the plane from the United States and saying that we need a corporate tax giveaway, we need to bust the budget—

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