Simon Kennedy (Cook, Liberal Party) Share this | Hansard source

I commend the member for Fraser, whom I hold in high esteem, and I agree with all of the content of his speech. I think this is an area of bipartisanship. We need a global approach to tax, and we need multinationals to be taxed where their activity occurs. We need to stop profit shifting; it hurts Australia and it hurts developing countries. We do not want companies to purely focus on minimising tax or avoiding tax in our country.

In the coalition, we welcome the continuation of the OECD's two-pillar solution to multinational tax avoidance. This was started by the coalition, very proudly, and has been continued by the government. We also welcome the government following our lead on tax avoidance. The coalition took extensive action on this nine years ago. As the host of the G20 in 2014, Australia played the leading role in the original Base Erosion and Profit Shifting Project. It was initiated in 2013 and delivered in 2015 under a coalition government. Under the coalition, Australia was an early and vigilant adopter of the OECD BEPS recommendations. These recommendations established the multilateral approach to prevent tax avoidance and increase tax transparency to tax administrators like our ATO. The coalition government's measures included introducing the diverted profits tax, which limits companies' ability to shift profits outside of Australia. We introduced the multinational anti-avoidance law, which ensured companies do not avoid a taxable presence in Australia. We strengthened the thin capitalisation rules, strengthened transfer pricing rules and doubled the penalties for tax avoidance. We also established the ATO Tax Avoidance Taskforce. This taskforce, which was created in 2016 under a coalition government, still enforces the existing laws and supports the current government's new tax avoidance measures, targeting these multinational enterprises, large public and private groups and wealthy individuals.

From July 2016 to November 2021, the ATO raised $24.2 billion in tax liabilities against large public groups, multinational corporations and privately owned and wealthy groups. This generated collections of $17.3 billion for the Australian taxpayer, to be spent on the Australian taxpayer. A total of $15.3 billion of the liabilities was raised against large public groups and multinationals. This $15.3 billion from multinationals was spent on Australians. A total of $13.6 billion of the liabilities and $9.5 billion of the collections are attributable to this taskforce, started by the coalition.

Our system of tax is undermined when people or organisations avoid or attempt to avoid their tax obligations. In my electorate of Cook, where there are many small and medium businesses, the fact that these multinationals avoid tax is a constant source of irritation for these hardworking everyday Australian small and medium business owners who can't park profits in tax havens. And it's uncompetitive; it's not a level playing field. Already these small and medium businesses are fighting these multinationals with one hand tied behind their backs. We don't need to give them a tax leg-up on top of that.

In my first speech I talked about the fact that small businesses hire in our economy while large businesses fire. Small and medium businesses employ 70 per cent of Australians. Small and medium enterprises were responsible for all the net job growth in this economy. That means, as a whole, large businesses fire more people than they hire, while small and medium businesses hire more people than they fire. But, unfortunately, under this Labor government up to 16,000 businesses have now become insolvent. Small business is doing it tough, and we need the government to do a better job of listening. Yes, we're thankful for the targeting of multinationals avoiding tax, but small and medium enterprises need more support than they are currently getting from this government.

This legislation, while good, highlights an important point: Labor have broken their tax promises. Jim Chalmers said at the election:

We've made it very clear … that we don't have any proposals for tax increases beyond working with other countries to make the multinational tax regime fairer.

If only this were true. This promise before the last election to only increase tax on multinationals has been broken. It has been broken by Labor raising tax on superannuation. In time, this will capture one in every 10 Australians and young Australians earning average wages today. That is according to Treasury's own modelling. Labor are now going to tax unrealised capital gains. This is a wealth tax, which is unprecedented in Australia and unprecedented around the world. It's an assault on family owned businesses, it's an assault on people who own real estate or farms in their self-managed super and it's an assault on middle-class Australians. Labor are increasing taxes on franking credits, banking half a billion in taxes from Australian companies, Australian retirees, Australian super funds and Australian charities. Again, this is a tax on middle Australia. Labor have ended the small business tax concessions. They are getting rid of the instant asset write-off relied on by Australia's small businesses

Yes, it's great that we're taxing multinationals and reducing the amount of tax they avoid, but we need to provide more help for small businesses and more help for everyday Australians. These higher taxes will not help a cost-of-living crisis. These higher taxes will not solve our anaemic economic growth. These higher taxes will not solve the fact that we've been in a household recession for over a year. These higher taxes will not solve the collapsing productivity we've had under this Labor government. These taxes will not solve the fact that the Treasurer is not running this economy; inflation is running our economy.

We're in a household recession, and our economy is shuddering to a halt. This is what everyday Australians are experiencing. Everyday Australians are experiencing their personal income rise by 20 per cent. Everyday Australians are experiencing prices rise by 10 per cent. Everyday Australians are experiencing real wages collapsing by eight per cent as they get poorer year on year. Everyday Australians are experiencing living standards collapsing by eight per cent. They're experiencing their household savings fall by 10 percentage points. A family with a typical mortgage of $750,000—and it's much higher for many in my electorate of Cook—are now $35,000 worse off under this Labor government.

Our inflation is now much higher than in most of the developed world. Australia is at the back of the pack compared to our peer nations. We have higher spending, higher interest rates for longer and higher taxes, with an extra $315 billion across three budgets. We have broken promises on taxes on super, franking credits and small businesses, and we have sneakily increased income tax. There are increases through bracket creep. These should be indexed to inflation. Changes to multinational tax arrangements in this bill do not make up for these taxes on aspirational, everyday Australians, for Labor's inaction on inflation or for the 12 rate rises in a row that have happened under Labor's watch. And changes to multinational tax arrangements do not make up for this economic warfare on everyday Australians.

Australians deserve a government focused on the challenges they face today. Yes; we agree with the government on this legislation. But we do not apologise for holding the government to account for their broken promises on tax, for the cratering productivity numbers and for their failure to fight inflation. In my community of Cook, people are concerned. They're concerned about a government spending more for longer and taxing more. They're concerned about inflation staying higher for longer, and they're working out how they will make ends meet. While the Treasurer spins that real wages actually are going up, we know that's not the case. Everyday Australians feel it, and they're paying the price.

Community groups are stepping in. In Cook, I caught up with St Vincent de Paul. They're helping people facing homelessness. They're helping people who can't afford food by providing food hampers and helping people pay their electricity bills. There are people in my electorate doing it tough. I'm listening, and we're going to hold the government to account to make sure they listen. The spending that this government is doing is resulting in people facing higher housing insecurity, because interest rates are higher for longer. The spending has resulted in members of my community looking to move interstate. I was just speaking with a school teacher last week. He's looking at moving himself, his wife and their family to WA because they can't make ends meet, and they can't afford a house in Cook. They'll be away from their parents and grandparents. We are ripping away the Australian dream of growing up with your family, paying off your house and spending your Christmases, Easters and school holidays with your family, because people can't afford it.

Labor's approach is to spend first and then ask questions about the inflationary impact. Expert after expert has called this out. Michelle Bullock commented:

… we've revised up our forecasts for demand growth and that's due to stronger forecast public spending …

Independent economist Chris Richardson said that the RBA's statement was 'as clear as they can be'. He went on to say there is extra spending in the system. The savings of hardworking Australians in my electorate are being eroded by inflation. The household savings ratio in December was revised down from 3.2 per cent to 1.6 per cent. What does this do to the retirement prospects for members in my electorate? It takes them away. It erodes their retirement savings. We can see that Australia is failing to control inflation by looking at our inflation compared to other countries. It's higher than in Sweden, the UK, Norway, Canada and the USA. 'Why?' must be the question. The answer is uncontrolled government spending. While the private sector is cutting back—cutting back on spending, cutting back on investment—the government has its foot to the floor on the accelerator with increased government spending. Australia is the only G10 nation with inflation going up. The question must be 'Why?'

How has this spending helped Australian households? It's $30,000 of increased spending for every Australian household. When I speak to the community members of Cook, do they feel $30,000 better off per household? They don't. They feel poorer than they did three years ago. So I ask the Labor government to stop the uncontrolled spending and give back the money through tax cuts to everyday Australians. My constituents can't afford more of the same. They can't afford another $315 billion over another three years. They can't afford more interest rate rises fuelled by inflation. They can't afford the Labor Party's ideological energy policy that risks driving up energy even more than it's been driven up already.

We know the former government consistently delivered lower taxes for families and small business and implemented more than a dozen measures to combat multinational tax avoidance. I welcome this legislation. I welcome the Labor government's multinational tax avoidance measures, building on what we did over nine years. But the current government voted eight times against delivering a bigger tax cut to small business in last year's instant asset write-off. Small businesses need more help. Yes, it's fine to punish large businesses, but we need to start helping small businesses more.

The current government's last multinational tax bill was so badly designed that it taxed Australian companies. Yes, this legislation is better, but it's taken a while to get it right. Since that election, Australians are now paying 20 per cent more in income tax because of sneaky bracket creep. The government has banked over $60 billion from everyday Australians in bracket creep. It's about time bracket creep was indexed to inflation.

Despite the promise to only raise taxes on multinationals, the government has broken promises, raising tax on superannuation, on unrealised capital gains, on franking credits, on personal income tax and on an end to the small-business tax incentives. Yes, this is good legislation, but Middle Australia and small-business Australia need more. I know the small businesses in Cook expect more action. I know we must ensure that small businesses keep more of the money they make. So, yes, let's tax multinationals, but let's give small business a leg-up too.

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