Tony Smith (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for Fraser proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The Government's failure on tax policy.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

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

In 2005 Peter Costello said of the now Prime Minister:

Well, he didn't actually have a plan, he had 280.

Then he laughed and said:

So, you know, … if you didn't like one, there were 279 that you could look at.

I do not think Peter Costello was much of a Treasurer, but even a stopped Rolex is right twice a day. What Peter Costello nailed the member for Wentworth on was his inability to stick to a solid plan.

The plan that was put forward by the then member for Wentworth included a central proposal. Under that central tax proposal, the member for Wentworth suggested that people earning $1 million should get a tax break of over $100,000 but that an average worker should get a tax break of just $600. In Australia over the last 40 years or so, earnings for the top 10th have risen three times faster than for the bottom 10th. What was the member for Wentworth's answer to that? It was to give a $100,000 tax cut to the top and a $600 tax cut to the middle. He is a real nowhere man.

This economy requires some serious economic leadership. The member for Wentworth was right about that when he took the job of the member for Warringah. We now have unemployment going up, the deficit going up—it has doubled in just the last 12 months—and debt going up. We have confidence going down—consumer confidence is down eight per cent—disposable income is down two per cent, the share market is where it was a decade ago and capital expenditure is down 24 per cent. All the numbers that should be going down are going up and all the numbers that should be going up are coming down.

In that environment, we need economic leadership, but Australia is not getting it. This Liberal government has lost more ministers than it has had coherent tax policies—11 more, to be exact. The Liberals came to office in 2013 promising a tax white paper well within the first term. The member for Warringah said that that would lay out the plan for 'lower, simpler, fairer taxes for higher economic growth and better and more sustained services'.

Almost three years on, the government has certainly spent a lot of money on that tax white paper. More than $1 million has been spent on consultants, advertising and market research to find out what people think about tax. Unfortunately, what we do not have is any idea of what this government will actually do about tax. Yesterday in Senate estimates, the Secretary to the Treasury confirmed he is still 'waiting for direction' from the government about whether the tax white paper will proceed at all and what its tax priorities are. The finance minister called it 'stationary'. It is not clear whether he means a bit of paper you might throw in the bin or something that has stopped—either way, it is pretty clear it is dead as the dodo. This is of concern not just to Australians, who are looking for economic leadership, but to the more than 800 community groups and business groups that spent thousands of hours putting their ideas forward to the government's tax discussion paper.

The government talk about cutting taxes, but they are now running the highest-taxing government since the Howard years. When Labor left office, tax was 21.4 per cent of GDP. By 2018, tax will be 23.4 per cent of GDP. The government talk about boosting growth, but, on their watch, growth has slowed to the lowest level since the global financial crisis. They talk about better services, but they have cut $80 billion out of schools and hospitals funding for the states. Instead of working calmly and methodically through the challenges of the tax system, government ministers and backbenchers have floated thought bubble after thought bubble, running through them like little kids playing with a bubble machine, just watching them splatter on their faces. It might be entertaining for those of us who want to watch governments falling on their faces, but it is not the economic leadership that Australians were promised.

When it comes to multinational tax, we see one of the clearest divides of any area of policy. Labor's carefully costed plan was developed with guidance from the OECD and costed by the Parliamentary Budget Office. It closes legal loopholes that let companies use debt to shift their profits offshore. But the government do not want a bar of it. This is pretty consistent with what they did in opposition. When we brought forward a bill in 2012 that cracked down on companies overvaluing assets in offshore jurisdictions, the Liberals voted against it. When we introduced laws that plugged loopholes in Australia's transfer pricing rules and anti-avoidance rules in 2013, the Liberals voted against it. When we amended the Taxation Administration Act to bring in more tax transparency to make sure that giant companies are held accountable to their contribution to Australia, members opposite voted against it.

What is worse, on the final sitting day of last year, with the connivance of the Greens, the coalition rammed through this House a measure which gutted Australia's tax transparency laws, taking two in three private companies out of the transparency net. They did so after arguing that there was a kidnap risk to companies—an argument described by one tax expert as 'the stupidest argument for nondisclosure' he had ever heard. We had a Senate inquiry in which evidence was brought forward by a so-called astroturf organisation that turned out not to have any members. On winding back tax transparency, as Lenore Taylor put it, 'protecting tax transparency for the uber-rich is a strange thing to take a stand on'. It is the sort of idea that might have been dreamed up after the second cognac at the Melbourne Club. Thanks to Labor's tax transparency laws, we saw last year the information the Liberals did not want you to see. We saw that one in four public companies earning over $100 million pay no tax. But, sadly, thanks to the Liberals and their partners the Greens, we will never know what the comparable figure is for private companies.

The Liberals had a multinational tax plan in the last budget. It was a bit of a strange plan because we normally expect to have numbers in the budget; they had asterisks instead. It was not exactly costed, but we said we would support it. All we argued was that we wanted transparency as well. We said Australians deserve tax transparency. We would back their laws and, by the way, they might want to back ours. But they were unwilling to back Labor's sensible proposals to add $7 billion to the budget bottom line.

Yesterday in Senate estimates, there was some important evidence brought forward by the tax commissioner, Chris Jordan. He has made clear that he is going pretty hard on multinational tax avoiders. He said:

The excuses we hear from these companies are frankly over the top—how is it possible that companies known for their new-age technology and innovative products and services, fail to be able to furnish us with basic reports showing their business structures, their profits, how much tax they have paid and where? Their clear tactic is to delay and obstruct. They game the system.

He went on to say:

These companies have pushed the envelope on reasonableness—they play the game, they string us along, they believe we can be stooged. Enough is enough. No more.

I commend the tax commissioner on the hard work that he is doing, but let us be clear: his work is being hampered by the government's cuts to the tax office. He is fighting multinational firms with one hand tied behind his back, because the Abbott-Turnbull government have cut 4,700 jobs from the tax office, including around 1,000 jobs from the audit section. They are finally realising that sacking the staff who monitor tax compliance is no way of making sure that everyone pays their fair share.

Since March last year, Labor have laid out on the table clear, carefully costed plans, and all we have had from this government are thought bubbles. We have had the on again, off again GST game. On Sunday, we had the Prime Minister saying that he remained to be convinced. On Monday, we had the Treasurer saying, 'The government continues to consider all the matters that are before it on tax.' If Australians want to avoid a GST increase, there is only one way of doing it, and that is to vote Labor, because Labor will protect Australians against a 15 per cent GST. We know that a 15 per cent GST would see those on the lowest incomes pay 20 per cent of their take-home pay in tax, while those on the highest incomes would pay just eight per cent. If that money was offset through cuts to income taxes, NATSEM estimates that the poorest would be $33 a week worse off and the richest $69 a week better off. When the economy is fragile and inequality is at 75-year highs is exactly the wrong time to be considering a GST increase, particularly when you take into account that Japan went into recession when it raised its GST from five per cent to eight per cent.

The Liberals have failed to put forward a credible tax proposal. Led by a Prime Minister who thinks it is okay to offer a $100,000 tax cut for millionaires and $600 tax cut for ordinary workers, they have all the credibility of a fake Rolex. They are a danger to the economy. In the words of Senator Heffernan earlier today— (Time expired)

Alex Hawke (Mitchell, Liberal Party, Assistant Minister to the Treasurer) Share this | Link to this | Hansard source

While I am sure that all of us in this House would love to hear the words of Senator Heffernan, I am not sure that unparliamentary language can be aired in this chamber in the words of Senator Heffernan.

If I were an aspiring Treasurer, shadow Treasurer or Assistant Treasurer—if I were a person who wanted to get into high office in the Treasury space in Australia today—I am not certain that I would start my contribution to a tax debate by attacking the record of Peter Costello. I have to say to the shadow Assistant Treasurer: I wouldn't go there. If I were thinking about building a bank of credibility on economic management, on tax, on the delivery into this economy, I would not start by trashing Peter Costello's record—when you are not Peter Costello's bootlaces, shadow Assistant Treasurer. He is the longest-serving Treasurer in our nation's history. He set up a Future Fund to fund the unfunded liabilities of the Commonwealth into the future—all of the Public Service liabilities, which you had no way of funding and no plan to ever fund. He left the Commonwealth with zero net debt. So I would say to the shadow Assistant Treasurer: don't go there. Don't attack this nation's best and longest-serving Treasurer, because you have no credibility to do so. You have no credibility when you look at the Labor Party's record on tax and no credibility when you look at the Labor Party's record on spending. To get a tax lecture from a shadow Assistant Treasurer trashing the record of the longest- and greatest-serving Treasurer in this nation's history is, I think, an appalling way to start. I think it is an appalling way to start your contribution by forgetting that this government, when elected to office, did some important things. It did what it said it was going to do. It abolished the biggest tax on ordinary Australians delivered by any government in Australian history, the carbon tax. It abolished the mining tax.

Here we have the shadow Assistant Treasurer bringing a matter of public importance today on tax design and structure, bemoaning white papers and green papers, telling this government that we have got a terrible record of axing taxes. Cast your mind back just two years ago. We abolished the carbon tax, we abolished the mining tax—perhaps the single greatest exercise in tax design stupidity in world history. We have got the former Treasurer here to agree with it. We have the former Treasurer here on the front bench, making his return to the front bench. I would say to the member for Swan: he should get up and make a personal explanation about what a great design it was to introduce a mining tax that brought in no revenue. Give us a personal explanation about it.

Not only did they bring in a tax that brought in no revenue; not only did they bring in a mining tax that was supposed to tax superprofits—the superprofitable mining sector—that brought in no revenue; they also had an expert on tax, Ken Henry, give them many, many recommendations about tax. Of course, we know the previous Labor government ignored every single one of Ken Henry's recommendations about our tax system, except for a mining tax which brought in no revenue. That is really a great start to your tax debate, I would say to the shadow Assistant Treasurer.

I would also say to the shadow Assistant Treasurer: it is not a tax plan simply to spend and spend more money, when every single day everybody here who is listening, everybody out there who is listening, everybody who understands the Commonwealth budget, understands that the government borrows money every single day to fund the ordinary services of government. It is not a plan to continue to spend and spend with no way to fund it. What do we know about the Labor Party's plans if they are elected to office in a few years time? What are their plans? Let us have a look at them right now. We know that so far they have promised to raise $7.6 billion over the forward estimates—just in new taxes and charges. Of course, if you missed it, David Speers conducted an amazing interview with the shadow Assistant Treasurer just recently about the mix of taxes and spending that the Labor Party's plan comprises. We know that, whilst they are bringing in $7.6 billion in new taxes, over the same period of the forward estimates they are planning to spend $44 billion in new expenditure. So we have over $7 billion in new taxes and charges and $44 billion in new expenditure plans.

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

You're making it up.

Alex Hawke (Mitchell, Liberal Party, Assistant Minister to the Treasurer) Share this | Link to this | Hansard source

No, that does not add up; I concur with the shadow Assistant Treasurer.

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

Making it up.

Alex Hawke (Mitchell, Liberal Party, Assistant Minister to the Treasurer) Share this | Link to this | Hansard source

Oh, making it up. You are right. You are doing both. David Speers asked some important questions of the shadow Assistant Treasurer about the mix of your new taxes and spending cuts. He said:

… you won't go ahead with the emissions reduction fund, and the baby bonus element—but the lion's share, the bulk of what you're talking about here, is higher taxation.

The shadow Assistant Treasurer said:

We've got a mix of taxes and spending cuts. That's as it should be.

David Speers responded:

What's the mix? 80/20? The bulk of it is higher taxes.

The shadow Assistant Treasurer said:

You're right to say the majority comes from tax.

A majority, of course, is 50 per cent plus one, so we are already over 50. What is it? Of course, the interview went on, and the shadow Assistant Treasurer refused to answer what the tax mix was. That is because we know it is not just a majority; it is $7 billion in new taxes on the Australian people, with $44 billion of expenditure. It does not add up; it is not a tax plan when you are increasing expenditure at four times the rate that you are bringing it in, when we are already saddled with one of the strongest Commonwealth gross and net debts we have ever had and we have a deficit. It is not a tax plan to spend four times what you are bringing in over the forward estimates. It is not a tax plan. To bring this MPI to us today and say, 'Labor has a tax plan,' when it is a tax plan that relies on increased taxation of cigarettes at its core, really does not do it and will not provide for the budget. Let us have a little look at this, because the Labor Party is saying to the Australian people: 'Elect us to office and we will increase the taxation of cigarettes to fund our new promises.' Let us just see what a few people had to say about the taxation treatment of cigarettes. It really does not matter what side of the economic equation you fall on; economists all over the country universally came out to condemn the Labor Party's plan to increase the taxation of cigarettes to fund hugely increased amounts of education spending. Even economists such as Stephen Koukoulas, a former adviser to the former Prime Minister, Julia Gillard—

Paul Fletcher (Bradfield, Liberal Party, Minister for Territories, Local Government and Major Projects) Share this | Link to this | Hansard source

The Kouk!

Alex Hawke (Mitchell, Liberal Party, Assistant Minister to the Treasurer) Share this | Link to this | Hansard source

@TheKouk, if you want to find him on Twitter—

Paul Fletcher (Bradfield, Liberal Party, Minister for Territories, Local Government and Major Projects) Share this | Link to this | Hansard source

What did The Kouk say?

Alex Hawke (Mitchell, Liberal Party, Assistant Minister to the Treasurer) Share this | Link to this | Hansard source

'What did The Kouk say?' I am asked. He said:

If the number of packets sold falls at a faster rate than the price increases, you won't quite get the revenue effect you were hoping for.

I think, being a fellow traveller of yours, that is very polite language for, 'Your plan won't work,' Shadow Assistant Treasurer. He is being very polite. He is mincing his words. He is watching his p's and q's. But he has got a very subtle message hidden in that: your plan to fund increased education expenditure simply will not work. It does not stack up.

It was not just The Kouk who had that to say about it. Of course we know: any single economist you look at, on whatever side of the fence they fall, says that. I will quote budget expert Stephen Anthony at Industry Super Australia. Let us go to Industry Super Australia. Industry Super even came out to condemn the shadow Treasurer's plans:

"We want to tax tobacco so heavily that its consumption in this country will fall," he said. "Therefore this revenue should not then be relied upon to fund longer-term spending commitments."

That is Industry Super.

Do not give us the mock outrage that this is a public health measure. This cannot be a revenue measure and a public health measure at the same time. If you want people to stop smoking, and they do and the revenue falls, you cannot rely on the revenue to fund future education expenditure. Everybody knows it. Every economist on every side of the fence knows it. So, as to the mock indignation over there, you have got a big problem with your plans. You cannot rely on a falling source of revenue to fund increasing expenditure. You cannot do it, I would say to the shadow assistant Treasurer.

It is of course this government that is having a conversation about tax with the Australian people. And we are having a good discussion about it and it is worth discussing. The government of course takes the view that there should be a lower tax burden on ordinary Australians, particularly those on average incomes paying more in income tax—it is a topic that the opposition has been completely and utterly silent about. They do not see it as a problem that average income earners are now in the second-highest tax bracket. We do. We see it as a critical concern—something that has to be addressed to ensure this nation's prosperity, and it is something we will address in the future.

I would say to the shadow assistant Treasurer: if you are going to come in here with a matter of public importance, you need to outline your plans. Do not start by attacking the longest-serving and greatest Treasurer this country has had; do not do it, because it really exposes the weakness of your plans and exposes your record on tax, which is a record of failure, and it exposes that you are simply out of touch with the ordinary concerns of Australians. Average income earners who are now in the second-highest tax bracket need tax relief; they need to be sure they have a government that understands that burden, and this is the government that will act on those challenges.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

It might be Thursday afternoon after a long sitting week, but the building is still very busy—particularly over in the ministerial wing, and particularly in your party, Mr Deputy Speaker Scott. When you go back to the office, you are going to have seven calls to return from the seven candidates for the deputy leadership of the National Party! So there is lots of activity going on over in the ministerial wing. But the problem is that the busiest people over there are the removalists. And the reason that they are so busy is that we have—only 145 days after the last reshuffle—four or maybe five or maybe six vacancies that need to be filled. It is not even 21 weeks since the last reshuffle, and the Prime Minister's ministry is a smoking ruin around him.

If the chaos and confusion was limited to personnel, if it was limited to ministers, that would be one thing. It would be bad, but that would be one thing. It would be probably quarantined to that ministerial wing. But the problem is that all of this chaos and all of this confusion is contaminating the policy process in this country as well.

As to those opposite, I have never seen a more confused and chaotic approach to policy in this country, and nowhere is that more true than when it comes to tax. We heard the pathetic defence from the Leader of the House in the censure motion before; he said, 'It's okay; there is all of this mess around the Minister for Human Services, but we have a plan.' Nothing could be further from the truth. Let me give you one example, and that is when it comes to tax.

My colleague the shadow assistant Treasurer mentioned the tax white paper. The promise made before the 2013 election was that there would be a tax white paper well within the first term of the Liberal government. We are now 2½ years in. We have more than $1 million spent on consultants, spin doctors, polling and focus groups, but we do not have a white paper. And I think that, if there is one thing above everything else that describes the chaos in tax policy amongst those opposite, it is when the Treasury secretary fronted up to estimates upstairs earlier in the week and they asked him about the tax white paper, and the secretary of the Treasury—the main adviser to the government on tax policy—confirmed that he is still 'waiting for direction' from this government on whether the tax paper will proceed at all and what its tax priorities are. So after they have been 2½ years in government, the Treasury secretary fronts up to estimates and gets asked, 'Is there going to be a tax white paper as promised? And what will the priorities be?' And he says, 'I don't know.' I say to the Treasury secretary: don't feel bad about not having a clue about this government's tax policy—he is not alone. Nobody has a clue about where this government is headed when it comes to tax policy, including those opposite, including the Treasurer of this country and his Prime Minister—not a clue.

Everybody in this country is waiting for direction. They are waiting for the direction that the Prime Minister promised when he rolled the member for Warringah. Remarkably, 2½ years into their term—five minutes to midnight in this electoral term—we still do not know whether those opposite believe in a GST of 15 per cent or not. We do not know whether it is still on the table or whether it has splattered on the floor. That is the truth about the current state of the government's lack of direction when it comes to tax policy. As I have said, after 2½ years wasted, at five minutes to midnight, they still do not know.

Plan A was this GST of 15 per cent. That was plan A. That is what the Treasurer wanted and so many of the front bench wanted over on that side—a GST of 15 per cent. The only problem, in the Treasurer's own words, was: 'Then they wet the bed.' And when they 'wet the bed'—those were the Treasurer's own words, as he described his colleagues who did not want the GST of 15 per cent. The Treasurer called the member for Forde and others 'bedwetters'. The only problem for him and for his relationship with the Prime Minister is that the Prime Minister himself showed the tendencies of being a bedwetter. As we speak, they are changing the sheets at The Lodge! So that was plan A. Plan A is gone.

So, in a humiliating backdown from the Treasurer, we get to plan B. Plan B is to revisit all the things that he said he would never touch: negative gearing, superannuation concessions—all of those things that he said he would never touch. He stands up now and he says, 'No, I never said that we were against that. We are prepared to have a look at all that.' That was humiliation No. 2. He is now prepared to go down the path of all the things that he said he would never do.

If there is one thing that defines this government and this Prime Minister, it is that they say one thing and do another. They said they would deliver stability and they have delivered chaos. They talked about leadership and delivered confusion. They said they would deliver economic direction and there is more confusion than ever. While this Prime Minister dithers, while his economic credibility drains away and while his ministry self-destructs, the burden of policy development falls to this side of the House. We have shown that we are up to that task. We have policies on the table and there will be more to come. (Time expired)

Craig Laundy (Reid, Liberal Party) Share this | Link to this | Hansard source

I rise to obviously speak against this motion and follow on from the Assistant Minister to the Treasurer. I note, picking up on a theme that the Assistant Minister to the Treasurer went along with, that it has been a very ordinary two weeks for the shadow Assistant Treasurer. I watched David Speers completely tear him apart as he was unable to answer questions, but what the Assistant Minister to the Treasurer did not mention was his follow-up performance on the Peter Van Onselen's show, talking about 10 years of savings. But, when grilled repeatedly on how much of that was in the forward estimates, he could not answer the question. The shadow Assistant Treasurer is seriously standing here today raising an MPI that we have a failure on tax policy. He will present himself at the next election to the Australian people when he is quite clearly out of his depth and not on top of his brief. It was not just the fact that he rose to Churchillean heights and could not tell us what Bill Heffernan had said; it was that he was repeatedly asked, 'What over the next four years—the forward estimates—would you spend and would you save?'

As I was watching his inability to answer the question, my mind cast back to 2012 as a member of the public. I thought, 'I've heard this before.' The member for Lilley, whose right-hand man was the member for Rankin, I think, came up with the idea when things were spiralling out of control: 'Let's put things beyond the forward estimates so that we do not have to come up with the actual budget deficit, which, at the moment, is out of control.' They are trying to do the same thing again. They are seriously taking an approach they took to the last election and they were comprehensively thrown out on their backsides. They are trying to pull the wool over the eyes of the Australian people and the people of Reid. It was reported—I will not comment on the party room—that I termed the phrase 'verbal gymnastics'. What they are doing is fiscal gymnastics. There is one thing I can assure those opposite: the Australian people—in fact, the people of Reid—do not like being treated like fools. They do not like being told that you can do things in years 5, 6, 7, 8, 9 and 10 and not being able to answer the question of how you will pay for it.

I watched in awe yesterday Simon Banks on David Speers' afternoon show saying, right before the member for Batman came on after him, that the $47 billion in tobacco excise over the next 10 years—and, by the way, we have had a $700 million write-down under our guys—looks like it will be out of whack by $7 billion to $8 billion. There he is, one of the Labor Party's top strategists, admitting that there is an $8 billion hole already and they have not even fired the starting gun. The member for Batman followed with Arthur Sinodinos and was torn apart because he could not answer the questions either about what was in the forward estimates and what was over the 10 years. But, on the $7 billion to $8 billion shortfall, the best he could come up with was, 'We've had this costed by the PBO,' yet they will not release any of it.

The people of Reid had enough of that lot over the last six-year period they were in charge. When things spiralled out of control, they looked to do things that were fiscally dodgy by putting them outside of the analysis reach of not only the Australian people but us, and left us with hand grenades. The NDIS will increase from $23 billion to $47 billion over the forward estimates. We have real challenges. We need a serious conversation on the nature and composition of our tax system. I unfortunately have operated in every jurisdiction of government in this country and paid truckloads of cash. I know the complexities of the system because I have spent my entire working life, prior to coming to this place, trying to navigate it. It is complex; it is complicated. In fact, I would argue it is set up to make small business people fail. Yet all you have from those opposite are plans to make it more complex and more burdensome. We need a serious conversation. We are an adult government. We are having it. The opposition opted out long ago. They can throw all the stones they want. They are big on rhetoric but short on facts. Every time the shadow Assistant Treasurer has stood in front of a camera recently has proved it.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

It has been a long and tough two weeks, especially for our friends opposite. At the end of those two weeks, we should have a bit of levity and start with a joke: Scott Morrison. Scott Morrison, as Treasurer, has been an abysmal failure in every respect other than one: I did not think it would be possible to make Joe Hockey look good; Scott Morrison has proved otherwise. Scott Morrison has proved that Joe Hockey did not do such a bad job. I never thought I would say that here. Now what do we have? We had a new Treasurer come in and he told everyone for ages that he would be way better than the former Treasurer, Joe Hockey. He had been eager for that job and wanted to come in and show us what he could do and wanted to be able to come in and make a big run for the GST. He thought he had it all sorted out—that the GST would come in through his superior advocacy—and what happened? Last week on Insiders it came to a shuddering halt, when even Malcolm Turnbull, who promised economic leadership, went backwards. He put the gears into reverse and went backwards, and you saw the credibility of the new Treasurer go down the gurgler.

It has also been an insight to see the way in which they have framed their response to the economic challenges facing this country. Mind you, when Labor was in government we said that revenue would not be able to keep pace with what was happening in the slowdown in commodities and the way that things were cooling off with the resources boom. Those opposite refused to believe it. Yet, when confronted with the same thing, it appeared to them as a revelation. They said to the country, 'Guess what! The resources boom is slowing down and we're not getting as much money.' No. We knew that was coming. We knew there would be a challenge.

There are two competing responses in this country to the challenge of that slowdown that is confronting the nation and what it will do to the budget. We have a compelling vision. The vision on the other side is that the way to face that challenge is to hit low- and middle-income Australia on so many levels—increasing the GST, which will increase the cost of living, and then basically reducing the ability of low- and middle-income Australia to respond to that by, for example, having an argument about cutting penalty rates. At a time when the economy is slowing down, they are taking away people's ability to spend in the economy and then also hitting them on top of that with a greater GST. That has been their response. The tax plan of those opposite has been to make life harder for individuals and then also shrink their earning capacity. That has been their response.

The compelling vision is the vision that is being put forward by Labor, which is that we all have a part to play, that we all should have a way to be able to meet that challenge and that we should all benefit as a result of that. We should not just have one part of Australia—low- and middle-income Australia—carrying the load. That is why we have said, for example, that multinationals that game tax systems all over the world and have the ability to pay should pay. When we said that wealthy superannuants who were earning more than $75,000 a year through superannuation should pay a little bit more, those opposite screamed that it was not right, that it was not fair and that we could not change superannuation policy. When we said, for example, that we should increase the excise on tobacco, those opposite suddenly discovered an interest in low- and middle-income Australia, saying, 'You can't tax low- and middle-income Australia.' Some of those people pay a heavy price through tobacco consumption as well. We said all along, 'We are happy to accept lower revenue if we see fewer people smoking. We have already factored that in.' We have a vision that is quite different to that of those opposite. We do not expect people on lower and middle incomes to wear the load that those opposite want them to carry. We think that people who have the capacity to pay should pay. That is the way it should be.

Now what is happening? Now that they have ditched the GST increase, what is happening? Those opposite are suddenly the big defenders of multinational tax reform. After telling us that they would not, they are now considering looking at superannuation change. They are also looking at negative gearing changes. All the things they spooked the country about and said should not happen, they are now looking to put on the table. It demonstrates that they do not have a tax plan other than taxing low- and middle-income Australia. (Time expired)

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

It is always terrific to stand in this place after a contribution from those opposite to see their collective amnesia. Six years of their lives have been completely wiped out, have disappeared and did not happen, apparently. It is actually this government that is spending its time repairing what happened in the six years that those opposite seem to have completely forgotten about. I would like to remind the member for Chifley that it was actually this side of the House that has already given the Australian people a genuine tax cut. That is because we abolished the carbon tax that those opposite introduced. They have waxed lyrical in the past about the fact that they increased the tax-free threshold to $18,200 but they always forget the other side of that equation. I remind the Australian people that it was only compensation for the introduction of the carbon tax. It was actually this government that repealed the carbon tax and left the tax-free threshold in place so that is already a genuine tax cut to the Australian people. Those on lower to middle incomes are the ones who have benefited most from the repeal the carbon tax.

The member for Chifley touched on the amount of tax people pay. I will just remind the member for Chifley that in 2014 NATSEM showed that the top 10 per cent of Australian taxpayers pay about 50 per cent of income tax in this country. So I would like the member for Chifley to tell them how much more tax he wants them to pay. They are already paying their fair share of tax.

If you have a look at some work done by Adam Creighton, you will see that it shows that, for those in the lowest income threshold, for every dollar of tax they pay, by the time you take into account the social benefits and all the other things they receive, they receive a return of $324. Our social security system and our support system that we provide to those on lower and middle incomes are world leading and should be maintained and looked after.

All we have heard from those opposite in their three contributions so far is talk about increasing taxes. There has been no recognition of the fact that if you keep increasing the tax burden it does nothing for the economic benefit of this country. It does nothing to assist growth. It does nothing to encourage jobs. All it does is take money out of people's pockets and redirect it elsewhere. It does nothing positive. It does nothing to help this country compete on the international stage.

This is typical of those opposite, because that is all they ever talk about. When they were in government we heard them talk about 'saves'. They loved to bandy that phrase about and say that they had saved this and saved that. In reality, all of those 'saves' were tax increases. They were not savings at all. Those opposite were increasing taxes and putting a greater and greater burden on the Australian people.

It is only this side of the House that we see making a genuine attempt to improve the tax system, to reduce the burden on the Australian people and to ensure that we leave more money in their pockets. Every dollar we can leave in an Australian person's pocket will be spent more wisely by them than any government. We know the record of those opposite when it comes to spending Australian taxpayers' money. We are seeing that those opposite are committed and addicted to continuing spending ever greater amounts of money.

The Leader of the Opposition was asked recently in an interview, 'Where does bracket creep fit into your priorities for tax reform?' The Leader of the Opposition said, 'Well, in terms of tax reform, we are proposing today a way to find revenue and resources.' All they ever talk about is increasing revenue and finding more ways to take money out of people's pockets.

It was the last coalition government, under Treasurer Peter Costello, that announced and delivered tax cuts in 1998, 2003, 2004, 2005, 2006 and 2007. Not only that, as the Assistant Minister to the Treasurer at the table alluded to in his contribution, he also set up the Future Fund and paid off enormous amounts of debt left by the previous Labor government. So it is this government that is doing genuine work on tax reform. (Time expired)

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

In the lead-up to and in the wake of the last election, the Liberal Party made one of their principle policy priorities reform of our tax system. Two and a half years later, we are still waiting. We are still waiting for this government to announce one tax reform policy for the nation. Prime Minister Abbott and Treasurer Hockey promised tax reform; we are still waiting. Prime Minister Turnbull and Treasurer Morrison have promised tax reform; we are still waiting. This is a 'say one thing, do another thing' government that promised tax reform and has actually delivered tax increases. That is right: the inescapable fact is that when Labor left office tax was 21.4 per cent of GDP. It has increased steadily since that time. By 2018, government will be taxing at 23.4 per cent of GDP. That is an inescapable fact which hurts those opposite. Despite all their rhetoric about reducing tax and reforming our tax system, what have they actually delivered? They have delivered tax increases as a proportion of GDP. They have also increased government debt. They have also increased the budget deficit. Under them, the terms of trade have worsened and growth projections have flatlined. This lot are quite the economic managers!

When you pick up a newspaper these days and look at the headlines in respect of tax reform and this government's policies, you will see these words quite a bit: 'considering', 'looking at', 'on the table'—could, would, should! Two words that you will not see in a headline about tax reform and this government are 'decided' and 'doing'. They are two words that are absent from the rhetoric when it comes to this government. Now it has decided to float the idea of the GST. Let us not forget that Prime Minister Abbott said before the last election he would never, ever increase the rate of the GST. So what does he do when he comes to government? He gets the Premier of New South Wales, Mike Baird, to float the idea of increasing the GST. What a cowardly way to do policy in Australia—to get the leader of the state Liberal Party to go out there and float policies on your behalf. Talk about a conviction politician!

Then, of course, Prime Minister Abbott was rolled by the new Prime Minister, Malcolm Turnbull, who, in his first media conference, made new economic leadership a principle objective of his new government. New economic leadership is what he promised for the Australian people. The Australian people are asking: where is this new economic leadership that was promised by the new Prime Minister? The Australian people are still waiting. Both Prime Minister Turnbull and Treasurer Morrison put the issue of the GST on the agenda. I think it is worth reminding people of that. It was not the members on this side of the parliament that put the GST on the agenda. It was those on that side, and it was people like Barry O'Farrell, Mike Baird, Gladys Berejiklian, Scott Morrison, the new Prime Minister and the old Prime Minister. They are the ones that put this issue on the agenda.

They actively advocated for increasing the GST. They started talking it up. They started talking about the additional revenue that could be raised and the cuts that we could have in income and company tax. They got all their state leaders to get on board and to get out there and talk up the increase of the GST or the broadening of the base. They got the business community onside and asked them to go out and start talking about the GST, and then they dropped it—or we think they dropped it. Some say they have dropped it, but then again, maybe it is still on the table or in the mirror that they are looking into. We do not know, and that is the whole point of this government.

I thought it was quite insightful when Peter Hartcher wrote on the weekend:

What is the point of Malcolm Turnbull …

What is the point of the change of leadership, when the new Prime Minister promised economic leadership but has delivered nothing? In contrast, Labor has a fully costed set of plans for Australia involving cracking down on multinational corporation tax-shifting, involving new taxes on superannuation earnings above $75,000 and an increase in the tobacco excise, consulted, debated and decided—a clear plan for tax reform for Australia.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

It is great to hear that Labor have a fully costed plan, but it amazes me. I just cannot see that anyone on this side of the chamber—or anyone in Australia, as a matter of fact—would take that as a credible plan. We heard the member for Forde talk about the last six years and how they have conveniently forgotten the disaster that they imposed on the Australian public and the economy—

Opposition Members:

Opposition members interjecting—

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Order!

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

No, let them keep talking. They are having a fine chat over there. It is good to see that the member for Moreton is actually in the chamber for a change. He has spent more than 10 minutes here so it great to see him here.

The member for Forde mentioned the six years of the last Labor government. I know that the member for Moreton was in the chamber during that time and how much he cringed when he saw all those taxes being introduced. That was not tax reform; it was just a tax disaster. We heard about the four budget surpluses. They all cheered and stood up here and told the member for Lilley how great he was for providing four surpluses! They all put it in their newsletters and they sent it out to their electorates. The credibility factor we have heard about here today—

Dr Leigh interjecting—

Actually, I am impressed by the member for Fraser, who moved this MPI, because he is still in here. Most of the people from your side who move an MPI are straight out the door.

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

I wanted to listen to your words of wisdom.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I guess you wouldn't appreciate them, being an academic and not having actually worked in the real world where you have to get out there and dig ditches and earn a buck. You might learn something from someone who has had to do that—pay taxes and employ people.

Opposition members interjecting—

Isn't it great how they are reacting? One thing they have not forgotten—the assistant minister and the member for Gorton will remember—is the incredible time under Keating and Hawke and how great Labor's economic credibility was in those times. They left us with a $96 billion debt. When people like the member for Fraser come in here and start talking about tax reform, those on that side of the chamber should remember that they have no credibility on economic or tax reform or anything. I must admit that during the 25 years I spent in business, every time Labor came into power—bang!—businesses knew they were going to get smashed by tax reform. It was called 'tax reform' but it was just hitting the tax and spend ideology, which is still there. We see it today.

I want to touch on the tobacco tax, which has been talked about. As the chair of the health committee, one of the things that we have found with that tax is that it hurts the people of low SES, it hurts their children and it hurts the way they spend their money. They will continue to spend money on tobacco. The only people who will suffer from that are the children, who do not get proper food because people in those lower SES areas still continue to purchase tobacco.

All the contributions, one after the other, from the members of the opposition about tax reform got me thinking about the last time Labor tried to reform the tax system. It was not that long ago. You would think, Mr Deputy Speaker, that before submitting a public importance matter about tax policy the member for Fraser would have considered the recent record of his own party. I will take you back to 2008, when the Rudd government established Australia's Future Tax System Review. This became known as the Henry tax review on account of the then Secretary to the Treasury. It was billed as a root and branch review of the nation's tax system. If you can remember, it was actually a recommendation of the Australia 2020 tax summit—and how good was that? Who remembers the 2020 tax summit? It would be interesting to review the outcome of that 2020 tax summit and see what has actually been achieved. I suspect the coalition called it right at the time on that one.

Labor undertook the Henry review to examine Australia's tax and transfer system, including state taxes, and make recommendations to position Australia to deal with the demographic, social, economic and environmental challenges of the 21st century. Sound familiar? It was two years from the time it was announced by Treasurer Swan on 13 May 2008 to the government releasing the final report on 2 May 2010. This was a very comprehensive report. There were 180 specific recommendations in this report compiled by Mr Henry. So you would say that there were quite a few opportunities there for the Labor Party to implement some tax policy reforms. Almost the entire report was ignored, except for one thing—the minerals resource rent tax, which was just a cash grab from Western Australia, attacking the Western Australian mining industry. I can tell you that, when the next election comes around, the Western Australian people will not forget that tax grab and will not give any favours to the Labor Party for their economic reforms.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I notice that in a few weeks there will be a game of cricket between the politicians and the press gallery. I just mention that because every now and then in this chamber you get a slow full toss down the leg side, and that is exactly what the member for Swan sent down here.

Let's have a look at the economic record of those opposite and let's get a few facts out there. Cast your mind back to September 2013, when those opposite came to power. They are now five-sixths of the way through their term. Let's just cast our mind back to when they came to power: GDP was at 2.6 per cent and unemployment was at 5.7 per cent. At the time, the ASX was trading at a five-year high—look at it now. We have to go back 10 years to find the rate that it is trading at now. Government debt was $273 billion. They came in on a ticket. I remember former Treasurer Joe Hockey saying that they were going to return to surplus in their first year. That is one of the promises he made. Remember that? He was going to return to surplus in their first year. Now government debt is up an extra $133 billion, to $410 billion.

Dr Leigh interjecting—

Perhaps it is because they have made all these cuts they are a low taxing government. If they cut all these services, get rid of the CSIRO, get rid of the climate change scientists, perhaps they will have a lower tax grab. When they came to power, the tax to GDP ratio was 21.4 per cent under Labor. The tax to GDP ratio now is not lower; it is 23.4 per cent according to their budget.

Let's have a look at tax reform and what Labor can do and the realistic record of those opposite. Today when we have a chance to talk on a matter of public importance about tax reform, what do we hear? From the member for Mitchell, we heard this long, drawn out love song to Peter Costello, which was really, really horrible to listen to. He did not mention the nearly $70 billion in assets sold by former Treasurer Peter Costello. He did not mention the fact that he was hit by a rainbow in the Treasury coffers from the minerals boom. He did not mention that—to paraphrase Paul Keating.

The reality is that those opposite are never prepared to do the heavy lifting when it comes to tax reform; it is a myth out there that they are. They sold off all of those Commonwealth assets. Admittedly, some of it started under Hawke and Keating. They took economic reform to the people; they had people talking about tax reform—an amazing thing to do under the Labor Party. What have those opposite done? Significantly? Really? The only thing that you could grab in the last 30 years would be the GST increase—a tax by those opposite that we saw here for five minutes until they ran out, scared. What is the problem with that tax? It attacks the poorest and the middle class first. I have been contacted in my office by pensioners who are already worried about the taxes they pay with the 10 per cent GST. If it were ramped up—a 50 per cent increase—to 15 per cent then that would be extra hardship for them. Let's have a look at it. Is it being proposed at a time when there is excessive wages growth in Australian society? Is that the situation? No. I think we have the lowest wages growth in real terms than we have had ever since they started keeping records—25 years or so. So it is not as if there is rampant inflation in wages growth.

The reality is that the economic leadership team opposite, the Barnaby-Malcolm team, is waiting in the wings to talk about tax reform. Remember the future Deputy Prime Minister is the guy that said that—let me get this right—Australia was about to default on our debts. Remember that? That was about five or six years ago. I think he even repeated that today. This is the guy who is going to be in charge of making decisions about the economic future of this country. The Barnaby-Malcolm team is waiting in the wings to take up from the Morrison-Turnbull team, making up for the Abbott-Hockey team. When Joe Hockey said that there was going to be a surplus in the first term, obviously he meant for him personally. He is on a good wicket with his government pension. He whisked off to Washington on taxpayer funding. So the surplus is a personal surplus for Mr Hockey, not his promise in terms of economic leadership at all. (Time expired)

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

In summing up, the coalition government recognises that, in order for the Australian economy to prosper in response to increasing competition from emerging economies in our region, our nation needs the right tax system to generate economic growth yet provide an equitable system of services and welfare for those in our community who genuinely need it. Australians want a tax system that will enable them to achieve their full potential rather than hold them back.

Since being elected, the coalition government has repealed the carbon tax and the mining tax which were affecting industry. There are more than 125 different taxes in Australia. The top 10 taxes raise 90 per cent of the revenue whilst the remaining 115 taxes raise only 10 per cent yet it is difficult to abolish some of these taxes because they are designed to curtail activities which have detrimental consequences, such smoking and alcohol consumption or have social equity implications such as taxes on luxury goods. The overall objective is to implement lower, simpler and fairer taxes.

Tax reform is linked to social policy. The Prime Minister has said that the objective of any tax reform is to ensure that Australia remains a high-wage, generous, social, safety-net economy that is creating jobs. Encouraging greater workforce participation and civic mindedness is at the core of delivering a lower tax burden on others. Hardworking Australians and small business owners must not be overburdened by taxation. The challenge is to generate growth and provide incentives to work, save and invest. Those on this side of the House want to create a better tax system, not a bigger tax burden.

The coalition government are adopting a methodical, consultative approach to taxation reform. We are not in the business of ruling individual tax measures in or out in isolation before proper consultation and debate can occur. The Prime Minister and Treasurer will seek a mandate for substantive tax reform at the next election. The government are involved in good-faith discussions with the states and territories on how we can improve our taxation system. In particular, in my home state of Western Australia, the allocation of a fairer share of the GST is a priority to support the provision of infrastructure over a vast area that services our export-earning mining, energy and agricultural industries. No decisions have been made to alter the GST.

The 2015 Intergenerational report indicates that, by 2055, the ratio of Australians of traditional working age to persons aged 65 and older will be less than three to one compared with the current ratio of 4.5 to one. This presents an emerging problem because Australia has a relatively high reliance on income taxes, higher than nearly all other developed countries as well as most of Australia's Asian competitors. Personal income tax accounts for 39 per cent of tax raised in Australia, while company taxes make up only 19 per cent of tax revenue. A dozen companies pay around one-third of Australia's company tax.

Many of Australia's international competitors and trading partners are reforming their tax systems to make them more competitive. The digital economy and globalisation present significant challenges for the effectiveness of the tax system. Capital is more mobile and highlights the need for a competitive corporate tax regime to encourage investment, promote higher economic growth, improve living standards and improve our international competitiveness. Comprehensive tax reform has the potential to lift Australia's gross domestic product more than any other government reform.

By contrast, Labor has little to offer the tax debate when it comes to trying to tighten the government's belt and actually cut taxes. Labor has, so far, promised taxes that will raise just $7.6 billion over the forward estimates period and announced spending worth $44.1 billion over the same period.

Tony Smith (Speaker) Share this | Link to this | Hansard source

Order! The time allotted for this discussion has now expired.