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

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

The failure of the government to provide an economic plan for Australia’s future.

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—

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Three years ago my predecessor as shadow Treasurer responded in the MPI the day after the budget and he warned about growing debt and deficit and what a Liberal-National Party would do about it. He announced that to the House. Who would have thought that three years later—with the member for North Sydney retired to Washington to fight the age of entitlement from the ambassador's residence and replaced by the member for Cook—the member for North Sydney's successor as the Liberal-National Party Treasurer announces a budget which sees a deficit that the member for North Sydney forecast for this year tripled under a Liberal-National Party government, and a Liberal-National Party Premier outlines a budget balance off in the distance that is based on very optimistic presumptions and forecasts, and the budget sees Australia's net debt increase by $109 billion, from $217 billion to $326 billion. That is this government's idea of dealing with debt and deficit.

Is it any wonder that the Treasurer was asked this morning on radio whether the debt and deficit disaster was over and whether the budget emergency was over? He was very agile and nimble in his response, as you would understand. He said, 'That's a tired old argument.' 'That's old politics,' said the Treasurer. Of course, it is pretty difficult. He could hardly say that it was over with those figures. He could hardly say, with his unfunded and uncosted taxing plans and plans in his budget, that it was over. The Treasurer was caught out.

Even the figures that I just outlined in terms of debt and deficit are based on very optimistic forecasts from the Treasurer. Nominal growth, the most important growth measure in terms of impact on government revenue, is predicted to jump from 2½ per cent this year to 4.25 five per cent next year, and then five per cent over the forward estimates. Well, that is a relief. I am sure honourable members are relieved to hear that everything is okay. Nominal growth is going to just rocket up and fix the budget.

I read that forecast last night in the budget. I thought: 'That sounds familiar. I've read similar figures to that in the past.' I got out last year's budget from our old friend the former member for North Sydney and I found that he was forecasting nominal growth this year of 3.25 per cent, which was revised down to 2½ per cent, and 5.5 per cent for 2016-17, which is now revised down as well.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Heroic!

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

They have a plan to fix the budget but it is just that for the next year they have to put in a little adjustment to say, 'Actually, it didn't quite work out that way.' I wonder what we will see about these forecasts in coming years. We have a budget based on wages growth of 3½ per cent. As the member for Gorton well knows, wages growth of 3½ per cent might be called an heroic assumption. The Treasurer has decided that the recent up-tick in iron ore prices is permanent. It will also come as a relief to the House to know that with the temporary recent increases—which we all hope are there for a long time—the Treasurer has decided that it is okay. We can bank on those, and he will build his budget plans on them.

The Treasurer tells us that he has come up with a plan for jobs and growth. I have to admit—and I am going to give credit where it is due—this government's economic plan announced last night has done better than most of the economic plans announced by the Turnbull government. It has made it to day 2. It is a long-lived economic plan, this one, by the standards of the Turnbull government. The biggest reforms to Federation in our history did not make it to day 2. State income tax did not make it to day 2. The big sweeping broad tax reform that the Treasurer promised lasted a little while longer, but it certainly did not make it to budget day. Dealing with the excesses in negative gearing did not last too long either. So this plan is doing very well. By the standards of the Turnbull government, it is standing up very, very well to scrutiny. But what it is not doing well is standing up to scrutiny when it comes to its impact on the budget, because it is a 10-year plan.

What we have been told by the government is that we all have to live within our means. We all have to budget for the long term. What we have to do is make sure our decisions make the budget sustainable. So, of course, the obvious thing to do is come up with a 10-year plan and have a four-year costing. That is the obvious thing you do in this situation, isn't it? It makes eminent sense to everybody. The Treasurer thinks it makes eminent sense to everybody that you would have a 10-year plan, except not cost it over 10 years. Could you imagine what would happen if we proposed that? If we said that we had a 10-year plan but we were not going to cost it over 10 years, I think the Treasurer might have something to say about that. I think the Prime Minister might even decide to get himself excited about that. We have the centrepiece of the budget, the so-called jobs and growth plan—the plan for 10 years time—and the Treasurer cannot tell us how much it will cost over those 10 years. He managed to get costed over 10 years his cuts to schools and hospitals. That was important enough to cost over 10 years, but he did not bother to get costed the centrepiece of his budget—and he expects the House to endorse a 10-year tax plan, without knowing what it costs. He expects the Australian people to endorse a tax plan on 2 July, and he cannot tell them what it costs. This is fiscal recklessness, and we will not have a part of it. We will not be part of a 10-year tax plan which is unfunded and uncosted.

The Treasurer can lecture us about funding schools and hospitals and how it should be paid for, and we will remind him that his policies need to be paid for as well. He cannot pay for them, because there is a small little technical detail: to pay for something, you need to know the cost of it! That is how it works. You have to work out the cost before you can work out how to fund it. It is a pretty basic process, which the Treasurer seems to have forgotten. I understand he was rushing it. He had a week less than he thought. But he still could have thought to cost the centrepiece of the budget. This shows the hypocrisy of this Treasurer, who is simply not up to being the economics minister of a G20 economy, as we have been shown time and time again over recent days.

We also know that the Prime Minister promised substantial tax reform. He promised it last Sunday on the Chris Kenny show. He told us it was substantial tax reform. We have seen what substantial tax reform is—a $6-a-week tax cut if you are on $87,000. But, credit where credit it is due. There is some substantial tax reform in the budget. If your annual income is $1 million, you get a $16,750 tax cut. That is substantial—I grant you that. Sixteen thousand dollars a year—that is substantial. We give points to the Prime Minister for that. We acknowledge that that is substantial.

But we should not be too harsh on the Treasurer. It is his special day—his budget. It may be his only budget, so I am going to try and find things in the budget that I like, that we can endorse. I have looked through it and I have found some.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

Our policies.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

We can endorse them because we announced them! We can endorse them because they are Labor policies announced by the Leader of the Opposition, by me and by my colleagues over the course of the last two years to deliver budget repair which is fair, such as dealing with high income superannuation. Why don't we make $250,000 the threshold for the surcharge? Who thought of that? We did. The Treasurer personally led the campaign against it. He said it was an attack on the retirement of incomes of all Australians. He was going to fight to the last drop of his blood to oppose it. Last night, he announced it. That was his great big plan. We had tobacco. Of course, not only did the Treasurer oppose that, the health minister opposed increasing tobacco tax. The health minister said it was a tax grab. It is just unbelievable that a government could spend two years campaigning against things, announce them and then argue that this was their plan all along. What we saw last night was not a budget; it is was an alibi for the last three years. The last three years did not happen.

What we are told is that this budget is a plan for jobs and growth. I will tell you, Mr Deputy Speaker, what a jobs and growth plan would not do. A jobs and growth plan would not cut $1 billion from Australia's infrastructure budget. That is what a jobs and growth plan would not do. We were told that this budget was going to be great for infrastructure. It was going to have a cities policy—

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

Where is it?

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Apparently, the cities policies, at its core, was to take $1 billion out of infrastructure. That is their great plan.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

Bring back Jamie!

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Bring back the member for Mayo. He might have done better. The other thing you would not do in a jobs and growth plan is cut funding to schools for the future, to actually say to Australia's schools: 'You don't need that money.' Apparently money does not count. Well, tell that to the principals and the teachers in Australia's schools who are trying to improve their educational outcomes and using the resources that they have for good outcomes by doing good things under the Gonski funding model but who are about to have it cut. That is not a plan for jobs and growth.

A plan for jobs and growth would not have a second-rate and more expensive NBN, which is this government's policy. Who is responsible for that? A man called the Prime Minister of Australia, who has had the disaster of the NBN on his watch. It now costs more, takes longer, is more expensive and is less efficient than the plans left to him by the previous government. We will have an election based on plans for jobs and growth. We will have an election based on your budget. We will have an election based on our priorities. It is an election that you will regret.

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

Never could there be a more stark contrast opening up between a government and an opposition than in what we just heard from the shadow Treasurer. If you listened to the Treasurer last night delivering his economic plan for Australia, outlining, measure by measure, the confidence intervals that the government is putting into place so that businesses will continue to grow, so that we have a good plan for jobs and growth, and then listened to the shadow Treasurer opposite, it would tell you that the opposition has simply learnt nothing in three years and that they continue to be a reckless and negative opposition. You could not see a starker contrast.

This budget is clearing the path for economic growth and jobs in a stronger new economy. Listening to the Treasurer last night, Australians would be aware that this is a government that will stick to the economic plan that will make our economic transition a success. Australians know that the world is in difficult economic times. They know that we have to make this transition. Indeed, it is the households, the small businesses, the larger businesses and the ordinary Australians having a go that are making that transition every single day. This government is dedicated to producing and delivering on its economic plan to ensure that the government not only lives within its means, balances the budget and reduces the burden of long-term debt but also delivers real incentives for jobs and growth in our economy.

If the opposition wants to come into this chamber and lecture us on not having an economic plan, we can outline with absolute clarity what our economic plan is for Australians. I am going to speak to that plan once again so that the shadow Treasurer can get it, because he has missed it. He has not heard it. We have a plan that will ensure jobs and growth in Australia. It is multifaceted. It meets the needs of the economy and our people. It has policy settings that will not hold Australia back and will keep the nation's prosperity going. It includes an innovation and science program for start-up business and a defence plan for local high-tech manufacturing and technology. It has export trade deals, generating new business opportunities. It contains tax cuts and incentives for small business and hardworking families. This is a sustainable budget with crackdowns on multinational tax avoidance. It closes off loopholes. It guarantees funding—real dollars—for health, education and roads. It is based on real money that can meet these commitments.

Each of these six components in our economic plan targets affordable action. It will deliver lasting results. When we look at each facet of this plan, you can see what the Turnbull government has been doing from day one. The Turnbull government has been investing in innovation and science programs for start-up businesses. We are investing in new measures for different forms of capital, at the start-up phase of businesses and through crowdsourced equity funding—all the different new economy measures that will produce more start-up businesses with more innovation.

Our defence plan, as the industry minister said in question time, will leverage each and every single dollar of defence expenditure across the economy to ensure that we have that local high-tech manufacturing base and sustainable order cycles in our shipbuilding and ship enterprises across the country, ensuring that that investment in ongoing maintenance and sustainment of these vessels will be over the long term in Australia, with each and every single dollar that the government spends on the defence industry and in the industry portfolio. We have a real plan for jobs and growth using Commonwealth defence expenditure to ensure Australian industry is sustained.

It is also important to remember that we now have free trade agreements, thanks to this government, with all of our main export markets—something the shadow Treasurer did not mention in his speech. We have enabled free trade agreements with China, Japan, Korea and the USA—our top four export markets. The trade minister is working, and continuing the work of the former minister, to pursue a free trade agreement with one of the world's emerging economies, India.

We have a sustainable budget crackdown on tax. What you can see in all the measures are responsible measures on tax—measures that will ensure that we provide the right incentives to our economy and do not send the wrong signals to our hardworking small and medium businesses. We have a crackdown on tax avoidance through our new diverted profits tax, a successful measure out of the UK, and we have 1,000 ATO staff working on multinational tax to raise $3.7 billion. We have measures that have not been thought about before—whistleblower protections, penalties for nondisclosure and real action on multinational avoidance—that will deliver $3.7 billion. This is real money, costed by the ATO, not fantasy figures as we have seen in the opposition costings.

Importantly, the incentives in our tax plan are the real basis for growth and jobs in our economy. How else do you grow jobs in our economy except by providing incentives through our tax and innovation systems? How else can any government provide the right settings for small businesses to grow and become great medium and large businesses in Australia? That is why we are lifting the threshold for small business to $10 million immediately and reducing the rate of business tax to 27.5 per cent. All Australians who work in a small business—whether they run and operate a small business, want to start a small business or employ people in a small business—ought to pause and think very carefully about the settings that governments put in place for tax for small business across Australia. We are increasing the threshold to $10 million and we are reducing the rate.

What does the Labor Party have to say?

Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

Will you campaign on that?

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

I will take the Manager of Opposition Business's interjection. He asks if we will campaign on that. We will campaign on small business. We will campaign on tax cuts for small business. We will campaign on lifting the threshold to $10 million, and I will tell you why. While we lower the rate for small business, small businesses will be enabled to grow and add more workers. They will be able to access the instant asset write-off. They will spend more in our economy. They will enable more purchasing. They will enable their business to grow, adding more employees. Jobs and growth—that is why the coalition will campaign on tax cuts for small and medium Australian businesses.

It is the Labor Party that wants to deny a tax cut to 90,000 small and medium Australian businesses that are doing it tough competing against multinationals and other large competitors in Australia. It is the Labor Party that wants to deny a tax cut to those businesses. It says you are a large business in this country if you get $2 million of turnover. That is the Labor Party's position. It says you are suddenly a large multinational company if you have a turnover of $2 million or if you sell one sandwich over $2 million you are suddenly a large business and you do not deserve a tax cut. That is the Labor Party's position. We absolutely reject that notion. We reject it because we understand the real economy. We understand how hard it is for a small business to grow in this country. We understand what non-competitive rates of business tax do on the international stage when you want to export your goods, and we understand what they do to your ability to add an extra worker, to put on an extra shift, to grow your business or to invest in a new asset.

These 90,000 businesses employ 2.2 million people. We should not understate the importance of this point. There are 2.2 million people employed in those 90,000 businesses that the Labor Party say are too large. These are Aussie small businesses working hard every day. This is turnover, not profit. Those opposite are making a big mistake with this, and I am happy to help them so. We will campaign on this every day. We will walk every street in every electorate and we will tell people: 'If you want to grow your business, if you want to get ahead in this country, if you want to add more people on, if you want to add an extra shift, if you want to add an extra worker, the Labor Party will stop you. The Turnbull government will enable you to grow your business and enable you to grow jobs.'

That is why this is a budget for growth and jobs. That is why this is a real economic plan. This is not a set of measures; this is a real plan for businesses to grow and adds jobs in this country—more jobs and more growth. We combine this with our measures in income tax. We are going to make sure that half a million Australians do not enter the second highest marginal tax rate. There could be no more important priority in the income tax spectrum at the moment than to prevent half a million hardworking Australians, average full-time income earners, from moving into the second highest category of income tax. There could be nothing more important.

Ms Butler interjecting—

I take the member for Griffith's interjection. 'Are we trying to insult people?' No. This is a fair budget for hardworking people and average full-time income earners are hardworking people, and they deserve a tax cut. They deserve to not move into a higher category of tax, and we have to do what we can afford at the moment. Given the debt and deficit legacy that we have been left with by Labor, these are all affordable measures. They are real money. They are real, costed measures that will deliver for Australians. It is our 10-year tax enterprise plan that will grow jobs, grow the economy and deliver the growth that Australia needs. It is the Labor Party that does not understand this economy and cannot be trusted with the serious job of running a serious economy.

Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

'Ultimately, the Prime Minister has not been capable of providing the economic leadership that our nation needs.' It was true when the now Prime Minister said that before he became Prime Minister, and it is still true now. What we saw in last night's budget was continuity with change. That is exactly what we saw in last night's budget. It was continuity with change, certainty with chaos, calm with fear—Turnbull yet Abbott. That is exactly what was presented to us last night. It is even affirmed in the documents that were given out last night.

The poor Prime Minister! Clearly, people had not told him what was in the budget. He was asked a question by the Deputy Leader of the Opposition about the impact of the budget on someone earning a million dollars a year compared to the impact on a single mum who is earning $87,000 a year with two kids in high school. The person earning a million dollars, after what was confirmed last night, will end up nearly $17,000 a year better off. The single parent working on $87,000 a year ends up $4,500 worse off. No-one told the poor old PM. On page 8 of the budget overview it said:

The Government is committed to ensuring that the $13 billion of unimplemented expenditure savings measures are passed by the Senate or alternative savings measures identified to continue on the path to a balanced budget.

What the Prime Minister needed to know is that that means the 2014 budget is still here and the 2015 is still here. The cuts that brought down the previous Prime Minister and caused the end of the Abbott government have all been adopted in black and white last night by the Turnbull government. The very least those responsible for these decisions could have done was tell the Prime Minister, but the poor bloke stood up today with absolutely no idea as to what has been put in his own budget. Not only that, those opposite have been getting up and thinking that the changes to the corporate tax rate that were announced last night were about small business. Nobody told them what was in the budget!

I reckon the Prime Minister did know about this one. I think it is fair to say that he was onto this. So desperate was the Prime Minister to provide a tax cut for big business that he decided to use small business as Trojan Horse. Not surprisingly, those opposite will only talk about what happens to the definition of small business in the first year.

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

You don't understand it.

Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

You might not understand what is here. If you do understand what is here, you are mad for supporting it. What they have done is all listed under the claim in the title of this document, Making our tax system more sustainable. The sustainable one is the one they have not costed. On page 17 of that document, they take the definition of a small business to one with a turnover of $10 million a year, in the first year. In the second year, it moves up again. It is not only in this document. It is here in the budget papers. The definition then goes up to $25 million. The definition of small business the year after that goes up to $50 million a year. Until we get to the 2022-23 income year, when the definition of small business is a business with a $1 billion turnover. As an attempt by those opposite to hide that they were providing a benefit for big business, it is probably best not to get to the billion dollar figure! By the time you get to the billion dollar figure, I reckon the public are on to you. If those opposite want to get a tax cut for their mates in big business, just own up to it, but do not claim that businesses with a $1 billion turnover are the little guy. Do not claim that those with a $1 billion turnover are the businesses where the person running the business knows every one of their employees by name. That is not a $1 billion turnover company. But that is a small business measure that those opposite backed last night.

You have a centrepiece of the budget and they do not know how much it costs. They describe it as a small business measure, but instead what they are delivering is the most extraordinary outcome for big business. With the company tax rate, the benefits go to the top end of town. With the personal income tax rate, the big benefits go to the highest income earners. Budgets are about choices, and every ordinary Australian family and every average Australian worker knows in making those choices those opposite have not chosen them—they have chosen themselves and their mates.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

Let us try to bring some calmness to this debate.We have had the duelling actors out and about for the last 15 minutes. I would not mind so much if they were actually good at it, but they are not even good at that.

The reality here is: these people opposite, who claim to be the representatives of the future of Australia, have no understanding of the importance of business in this country. When we talk about jobs, when we talk about our young people needing a future and needing employment opportunities—not just young people but, generally, people who are experiencing unemployment—we have to understand that businesses, whether they be small, big or huge, are the hope of the side. Business is the hope of the side, if we are talking about unemployment. But we know that those opposite with a socialism bent believe that the hope of the side is to simply have the government employ everyone. They want the government to employ. They are the people who think that that is the way to fix unemployment.

We on this side of the House support business. You can argue the toss about small, medium, large or huge, but the fact of the matter is: for our young people to have the opportunity into the future for a job, we need to make sure there is certainty and confidence in the business sector. We need to make sure that the business sector has a competitive taxation regime and that it has people working for it who are aspirational and are wanting to build a future for their families. What is wrong with that? What do those opposite have against business? Why is it that, every time this government or the community calls for certainty and confidence, incentives and all that go with building that into business, the Labor Party falls short of supporting it?

I do not know what they have against business, but they need to understand that business in this nation is the hope of the side. If we do not provide that confidence to business, if we do not provide them with the incentive to keep their businesses in Australia—because we are lagging behind when you talk about the competitiveness of the company tax rate in comparable countries and we are lagging behind when you talk about personal income tax rates. I want to be part of a government that understands that our businesses need to be competitive, because those businesses, at the end of the day, will provide the jobs for my kids and my grandkids. Those jobs do not appear out of nowhere. They appear through the hard work, the determination, the investment and the backing in of themselves of businesses all over Australia.

In those businesses, we have people who we call 'tradies'. They are the businesses where maybe a husband and wife team up to run their own little plumbing business or building business. One of the partners is doing the trade; the other is supporting them in the management of the business. They are often just partnerships. They are simply partnerships. They are aspirational Australians. They want to build a future for themselves, their children and their grandchildren. They do not want to be necessarily depending on an age pension when they get to that age. They want to be self-sufficient. And what do we have today? We have a Labor Party that says that anyone who is earning $80,000, or even $79,000 today and creeping over $80,000 tomorrow, should not have a very small sense of taxation relief. We are only talking here about $300-odd as a maximum—the difference between $80,000 and $87,000. Can we put to rest, once and for all, this nonsense about someone earning huge amounts of money getting a $17,000 tax cut? That is absolutely ridiculous. The Prime Minister put that to bed, but you guys over there will continue to perpetuate this deceit to the Australian people. But I am sure that they are up to it.

Having Labor talk about their support for budget repair, as I heard the earlier speaker say, is like Hannibal Lecter talking about his support for vegetarians. Really, these are the very people—and most of them are still here—who were part of a government that trashed the national economy and that left us in high levels of debt that this country has never ever seen. And they stand here today and suggest that they have the answers to repair the budget! Anybody with any common sense who is listening to this or reading this today would know that you cannot trust the person who lit the fire to come back and put it out.

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I rise to talk particularly about infrastructure and the failure of this government to understand that infrastructure is the key to future jobs and economic growth. This is a budget that absolutely fails. It is a budget that has a $1 billion cut to infrastructure investment over the forwards alone. It is a budget that, in four years time, will see the amount of money that is allocated to rail that is not an equity injection through the ARTC fall to zero dollars.

This is a Prime Minister who came to office saying that he was going to talk about cities and urban policy. What we have seen is that his 30-minute city policy did not actually last 30 minutes. It is a 30-minute policy! In last night's budget, not a single new project was approved—not a single new project anywhere in the country. There was no money for the Cross River Rail project. There was no money for light rail or heavy rail in Adelaide. There was no money for Metronet in Perth. There was no money for new major road projects. Just simply, there was a continuation of their magical infrastructure re-announcement tour around the country.

It is coming to an end because projects are being opened. The regional rail link down in Geelong, Bendigo Ballarat is now open. It is functioning. Projects like the Moreton Bay rail link will be opened in the next month. They were promised, funded, built and opened under a Labor government—opposed by those opposite. There is no money for western Sydney rail and no money from major road projects. We have just heard a speech from a Tasmanian. Tasmania gets under two per cent. That is its total percentage of the infrastructure budget: a cut to the rail revitalisation program and a cut of $100 million to the Midland Highway. Victoria's percentage, to be fair, has increased. It is now up to 9.6 per cent. It is just a pity that they have 25 per cent of the population. One in four Australians are getting less than one in 10 of the dollars.

Those opposite speak about Infrastructure Australia and processes and they raise the east-west link—come in spinner. It was a project that was to produce 45 cents of benefit for every dollar invested. I have a proposition for everyone over there: you give me $100 today and I will give you back $45 tomorrow and we will call it a good deal. That is the proposition. What is more, they cut the Infrastructure Australia budget. It falls by 25 per cent in two years. One in four dollars will be cut from the Infrastructure Australia budget. What we saw last night was not budget 2016; it was fudge-it 2016, because the dollars simply do not add up. If today you are not planning for the infrastructure of tomorrow, the investment will fall off the cliff. We have already had under this government a 20 per cent decline in public sector infrastructure investment on their watch.

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

Twenty per cent!

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

Twenty per cent—one in five dollars—gone. That will result in lower future economic growth, lower returns in revenue, slower growth, fewer jobs. Is it any wonder that the steel industry is in trouble when investment has dropped off the cliff? This is a government that has no agenda for infrastructure and, in particular, has no agenda for our cities: $50 million for planning, that is it. What a joke of a policy. It is no wonder they are not taken seriously.

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

Budgets certainly highlight values. That was demonstrated again last night and by the conversation that we are having in this chamber today. The main highlighted value for me in the budget last night was our respect for and acknowledgement of the importance of small business in our communities and our country. I understand, and I know this side of politics understands, the importance of unions and the importance of worker protections. That plays a role in business and in private enterprise in looking after those rights. But what those opposite do not understand is that the important thing in all of this is a healthy private sector. As you know, Deputy Speaker Vasta, small business is the biggest employer in this country by the proverbial country mile. It employs more Australians than big business and it employs more Australians than the public service. Let us add to that that the public servants in this country are paid for by the taxes from the private sector.

What do we as a government have to do? Our primary role to have a strong economy is to have a strong private sector. This tax cut is about that. Not only do we need to have small businesses employing and growing, we need them to be competitive in a global world. I know everyone on our side of politics understands that taxation is competitive. There are some businesses that may have to operate in a physical location, but in this increasingly digital world, in this increasingly global world, taxation is competitive. If we were to have our business tax rates at a higher level than those of our competitors it would discourage people from setting up business. That is an absolute fact. I recall the example of Ireland. Labor would have been proud of Ireland in the early eighties; it was a high-taxing, high-spending government. Then the Irish worked out they were going broke, so they lowered the company tax rate from what was something like 60 per cent to 10 per cent. What happened almost instantly, over a period of about three years, they started collecting more money. They started collecting more money at a 10 per cent tax rate than they were at 60 per cent.

Opposition Members:

Opposition members interjecting—

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

Those opposite do not fathom this; that is why I am getting interjections. They do not get that what happened after that was that Ireland became the IT centre of Europe. It became the IT centre of Europe because that was the emerging business, the emerging industry, of the time. Those businesses said, 'Let's move somewhere where there is a business friendly environment.' What happened then of course is that there was much more employment, and things were going very well in the private sector.

Another thing that I am very proud that our government has done is clamp down on multinational tax avoidance. It is something that the other side has talked about. They were in for six years and did nothing about it; we have been in for two and are now doing a lot on it. While we believe in competitive tax rates, we certainly believe that businesses and multinationals should pay their fair share. So it was great to see in the budget that the government I am very proud to be a part of has brought in a diverted profits tax. We, by reinforcing the ATO and giving them more resources to do this, are budgeting to collect nearly $4 billion over four years to make sure that multinationals pay their fair share—because, if you are making profits in Australia, you should be paying tax in Australia, and that is what this measure will ensure.

I am running out of time, so I will touch on a couple of things that I am really happy about. In our youth employment package of over $800 million, business will be working with government. Businesses take a big risk. Those opposite would not know that, but I have employed people. When you employ people, it is a big commitment. You know that they are not going to be productive at the start and that you will have to train them. There is a big expense when you take someone on. Again, those opposite would not know that, but we do because most of us here have employed people. We are going to work with small business and, together, put in place internships, skills training and a bonus wage subsidy to encourage small business to employ people.

On infrastructure, employment and competitive taxation it is a great budget and I am very happy to be part of the government that brought it down.

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

In mid-2009, the then Leader of the Opposition, Malcolm Turnbull, decided he would bring back an old stunt from the Liberal Party—the notion of a debt truck. He put a debt truck on the road, sat at its wheel and said that under Labor gross debt might go to $315 billion. That, he thought, was so terrifying that the Australian people had to be warned about it. Well, it is instructive to look at the budget papers to see where gross debt will be under the Turnbull government. Under the Turnbull government, gross debt is going not to $315 billion but to $624 billion. Gross debt will be nearly twice as large as when Malcolm Turnbull got his first debt truck. I have news for the Prime Minister: it is time to trade in his debt truck and buy a debt B-double.

The fact is that, when this government came to office, the deficit—the gap between what government raises and what government spends—was $30 billion. Now it is projected to be $37 billion. A coalition that came to office promising a surplus in its first year and every year after that is now projecting red as far as the eye can see. This government, which said that it would have debt and deficit at its heart, has delivered an additional $123 billion of net debt. That is an extra $5,000 of debt for every man, woman and child in Australia. Does the government take it seriously? When asked about this by Leigh Sales, the Treasurer said:

Well, you're asking me about politics, Leigh. You're asking me about politics. What I'm talking about is what is actually happening with the budget.

You can only shake your head when you hear a Treasurer who has had more positions than a game of Twister on the issue of debt and deficit say that.

There are things to like in this budget. There is the low-income superannuation contribution. It is under a new acronym, but it is a Labor policy re-announced. There is tobacco excise, which is a good revenue raiser and good health policy. There are the measures on restoring some staff to the tax office—it is a veritable Xerox-led recovery. The trouble is that those opposite have been railing against many of these measures for the past few years. They cheered when the former Prime Minister, Tony Abbott, attacked Labor for suggesting that we might put more resources into the tax office to get more revenue out. The then Prime Minister, Tony Abbott said:

So far the only idea they have come up with is to spend $100 million on the ATO to raise $1 billion. Well, next time they will be telling us to spend $1 billion on the ATO to raise $10 billion. That is the problem.

It does not seem to be the problem in the glossies. When I look at the glossy I have here, I see a lovely little picture. It shows investment in the tax office of $679 million and revenue from the tax office of $3.7 billion. It looks pretty much like what former Prime Minister Abbott was deriding. We also have some suggestions in the glossies that this government is going to crack down on profit shifting to tax havens. It is funny that it does not actually put names underneath the tax havens. You might think some of these islands could be named—for example, Bermuda or the British Virgin Islands. What is the one I am missing?

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

The Cayman Islands.

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

The Cayman Islands—that is right! The government could well name them, and that is something that I am sure we can follow up.

The budget not only fails the government's own test of debt and deficit but also fails Labor's tests of whether it deals with growth, innovation and inequality. Labor recognises that our living standards have fallen four per cent since this government came to office, and a budget which rips $1 billion out of infrastructure investment is not going to spur that growth. We recognise that wage inequality has risen, with wages rising three times as fast for the top tenth as for the bottom tenth. And, yet, what are people being offered? There is no tax cut for the bottom three-quarters of workers. Workers earning between $80,000 and $180,00 get a tax cut which is not a sandwich-and-milkshake tax cut but a sandwich-or-milkshake tax cut—a mere $6 a week.

On the subject of innovation in Australia, just six per cent of ASX 300 firms think that they are highly innovative. In the budget we see an entrenchment of cuts to schools, vocational training and universities. It is exactly the opposite of what you would want to lay the plan for strong growth. There is nothing new in the budget about renewable energy, which must be an innovation sector for the Australian economy. This is a budget that is designed to get a political party through an election. It is not an economic statement designed to set a nation up for the decades to come.

Michael Sukkar (Deakin, Liberal Party) Share this | Link to this | Hansard source

What an outrageous MPI put forward by the shadow Treasurer, the man who will be known for his black holes. Bowen's black hole on the eve of the last election worked out to be about $30 billion with an $18 billion deficit, and that turned into a $48 billion deficit because of the Bowen black hole. This week, again, we see that the Labor Party cannot add up rudimentary numbers—$19½ billion is how far wrong their costings were on tobacco excise. I know some people have referred to that as a 'rounding error' and in Labor Party terms it probably is a pretty small error. Nothing that those opposite say is taken seriously by the Australian people because the Australian know that they are the party who inherited the books in the black with money in the bank and, in six short years, they absolutely trashed this country's finances. What have they done for the last three years in opposition?

At every single opportunity they have tried to block our savings measures and our attempts to repair the mess they left us.

So, on the eve of the election, when Labor gets up and are foreshadowing $100 billion of tax increases, it is understandable that the Australian people are very, very frightened, because the extra $100 billion—it could be more; it could be $150 billion by next week, at the rate they are going—is not to be raised in order to retire their debt; it is not to be raised to reduce the interest bill that this country faces—$1 billion a month in interest. No, these taxes are to be raised just to chase ever more spending, because the Labor Party cannot say no to anybody—any group that comes, cap in hand. Particularly, paymasters in the union movement get paid. And who pays the price? It is the Australian people who pay the price. And who will pay the price for what is in in the budget reply speech of the Leader of the Opposition tomorrow night? I suspect it will be people in small business—the forgotten people, as far as the Labor Party are concerned.

Who could argue against tax cuts for people in small business? They pay the rent first, they pay the suppliers second, they pay their employees third and then, if there is anything over, they pay themselves. So, anything this government can do to help those in small business, we should do. For that reason alone I wholeheartedly, absolutely have the zeal necessary to argue for this budget. That is why I say that what the shadow Treasurer has put up today is consistent with his charlatan approach. He is a charlatan; he is a shyster, because he is the man who had a $30 billion black hole on the eve of the last election. I say, leave him there forever. He is a great successor to Swannie, the man who delivered four budget surpluses. I think a really good young staffer may have written that speech for him. Gee that was a good speech; we have got a lot of good material out of that over the past few years.

But where were those four budget surpluses? They never existed, because Labor cannot make the decisions that are necessary. They can never make a difficult decision. There is not one dollar that they will not spend, but we know that every dollar they spend is a dollar that they rip out of another Australian person's pocket. And I suspect that tomorrow night we will see ever more personal income tax increases, ever more small business taxes, ever more taxes on business more broadly. That is not the approach of this government, and it is not the high road to jobs and growth. As Margaret Thatcher said, at the end of the day socialists run out of other people's money to spend, and there is no more money for the Labor Party to forcibly remove from the Australian people's pockets.

We will be the people who defend those who want to get out, want to work hard, want to get ahead, want to invest. We will not increase capital gains tax by 50 per cent. Australia will have, in effect, the highest capital gains tax in the world if Labor is elected on 2 July, and, in effect, a capital gains tax rate of 70 per cent. We will not adopt that approach. We will stand with hardworking Australians. We are the party you can trust to run a strong economy, a strong budget, and ultimately that will be the foundation for the jobs growth we need in Australia to grasp all the opportunities for the future.

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

Honourable members would not be aware of this, but on Monday night in the Gold Lotto draw a couple of terrific people from Logan City, where I represent, won first division. I think they won about $1 million. I want to congratulate them—Nicholas and Cassi, who own News Extra Logan Central, a couple of doors down from my office. The reason I raise this is that it has proved once and for all that in budget week you have a greater probability of winning division 1 in the Gold Lotto than of getting a fair go from the Turnbull government. We know that because of the two defining features of this Turnbull budget.

The first one is that 73,977 people in my electorate will not get a cent by way of a tax cut from this government—that is 82 per cent of my electorate—but a millionaire will get a tax cut of almost $17,000. That says it all. The other defining feature of this budget is that the government are so desperate, as the member for Watson and others have said, to give big business a tax cut—at the same time that they are pulling money out of schools and hospitals—that they are going to redefine every business in Australia, even businesses that are turning over up to $1 billion as a small business. These are well-known small businesses like Porsche Australia, well-known small businesses like the Gladstone Port, which is the biggest port in Queensland, and well-known small businesses like Warner Bros and like Sensis—all redefined as small businesses by those opposite in their desperation to give big business a tax cut and hope that the people in my electorate, in Hunter, in Hotham, in Lalor and in other electorates will not cotton on to the fact that they have prioritised the biggest businesses in this country over schools and hospitals and tax cuts for people we represent in this place.

This is a really stark illustration of what they actually believe on that side of the House. The Prime Minister can wander around trying to be this cuddlier version of Tony Abbott all he likes, but the thing all of them over there have in common is that they still cling to this idea that has been long discredited: trickle-down economics—that if you pile lots and lots of money in to the wealthiest people in our community—

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

The Donald Trump model!

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

then somehow people at the very bottom will get the scraps, and that passes as an economic plan. On this side of the House we say, what rubbish. Trickle-down economics has been discredited. The only people who still believe in it, as the member for Hunter said, are Donald Trump and those opposite. And that is what this budget is really about.

The measures in this budget fall into three categories. The first one is all those Abbott obsessions that they are still clinging to. Page 8 of the budget's overview says:

The Government is committed to ensuring that the $13 billion of unimplemented expenditure savings measures are passed by the Senate—

That is the cuts to hospitals, cuts to Medicare, cuts to higher education, cuts to family tax benefits, all still there—all of the horrors from the 2014 Abbott-Hockey budget. The second set of measures are those that have been written and authorised by the big end of town. I read a story online this morning that said that the business community has come out in support of the budget—

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

I bet they have!

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

Yes. As the member for Lalor says, I bet they have. They wrote the thing, and they handed it to poor old Slo-Mo over there, and he announced it at that dispatch box last night—big business tax cuts, big tax cuts to the wealthiest Australians and these sorts of things, all written and authorised by the big end of town.

The third category of measures are those humiliating backflips. After campaigning against Labor policies for months, saying they would tear down the economy and they would ruin people's retirement aspirations, all of a sudden they have been adopted. To hear the Treasurer stand up here in question time and talk about a consistency of view after reinstating the low-income super contribution that they abolished, it is just entirely laughable.

The last point I want to make is about the fiscal situation. The Treasurer of Australia has done to the Australian budget what the Deputy Prime Minister of Australia is doing to the carp in the Murray. We know this because in the Treasurer's own budget we have net debt blown out by $109 billion, debt continuing to rise and tax continuing to rise as a share of GDP. Debt spiked at 12.8 per cent under us; it is now 18.9 per cent under them. There are huge debt and deficit blowouts. Tomorrow night we will see the contrast. Some of the speakers over there have pointed out that there is a sharp difference, and there is. We will put people first in our budget response tomorrow night, in the election campaign and in the government that we form after the election. Those opposite will continue to pursue policies which are written and authorised by the big end of town.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

I note the word 'failure' is used in this MPI today. We on this side of the chamber know a thing or two about the failure of those opposite as we were left to fix the economic mess created by them some three years ago. I am very pleased to rise in this House today to speak on this so-called matter of public importance, although it is highly misleading. Why is that? Let's look at the facts. We have heard a few of them today. We know that the gross debt that the last Labor government left behind was $310 billion and that the net debt was $191.5 billion, with a very healthy trajectory. We heard recently about their black spots as well. So, clearly, they are not getting any better with their money use. When those opposite were in charge of the country's purse strings they were true to form. They funded everything and anything, from the pink bats disaster to Mr G's performing arts schools, which, if left unchecked, would have left a massive tax burden for generations to come. However, we on this side are left to fix the mess. Last night's budget illustrates that the Turnbull government has an economic plan that ensures that Australia successfully transitions to a stronger and more diversified new economy.

To the hardworking Australians: the adults are in charge and we are looking after you. We, the Turnbull government, delivered last night's budget, which is about two things: jobs and growth. It is worth repeating: jobs and growth. More jobs for the good folk of the Kimberley, the Pilbara, the Gascoyne, and more jobs and economic growth for the people of the Midwest and Wheatbelt. These are all areas in my large electorate of Durack.

Our transition to a diversified economy includes policies such as the National Innovation and Science Agenda, which will be Australia's way forward. Science, health, research, IT and defence are just a few of the industries which will be boosted through our agenda. As we transition out of the construction- and mining-led economy, the people in the north-west of my electorate know only too well the importance of creating new industries and investing in the jobs of the future. These are the people who have been hit the hardest from the slowdown of the mining construction boom.

The assistance for middle-income earners is music to the ears of the hardworking people in Durack and it also provides an incentive for people to work harder and to earn more. I am sure you can recall that I have said on many occasions that governments do not create jobs; businesses do. There was the announcement last night that small and medium sized businesses with an annual turnover of $2 million will have their taxes significantly reduced to 27.5 per cent. This is exactly the sort of environment which will assist our backbone of the country. Small and medium sized businesses will be able to create the jobs that we desperately need in our economy. What we do know is that within 10 years our company tax rate will be down to 25 per cent, which is good news all round.

There are some great announcements in the budget regarding young people. The one I am particularly pleased about is the $1.4 billion announcement with respect to more education funding. This particular fund is going to ensure that all students in all schools around Australia have the bare basics for their education and for their long learning for life. For things like literacy and numerously—we have all got terrible examples of young people leaving school without the basics—we will ensure that these issues are covered off.

In other good news regarding young people—I do not consider it a failure; I think it is an absolute success—we hear that young people often cannot get their first foot on the ladder. They have no experience, so employers will not employ them. I hear this time and time again. You hear from employers: 'Well, I don't want to give a young person a go, because they are inexperienced.' We, as the government, have not failed. We have come to the rescue. We have said, 'Why don't we be the broker in this situation?' I am very pleased that we have announced our Youth Jobs PaTH initiative, with some $750 million, which, over the course of four years, will see thousands of young people given an opportunity to get their first foot on the ladder. We start with skills training, and that will begin from April 2017, moving to an internment placement initiative where we will see up to 30,000 young seekers each year being eligible to undertake an internship. Following that, there will be a youth bonus wage subsidy to the employers who are willing to take a risk with those young people. We are going to back employees and employers, and we are going to create the jobs for the future.

Debate adjourned.