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

Here we are at last. Nine months after the last budget was delivered, the centrepiece of that budget, the centrepiece of the government's so-called economic plan, is finally before the parliament for a vote. No rush to get this before the parliament. Nine months later and the Treasurer gets around to bringing it on for debate in this parliament. I do not think they are particularly proud of this centrepiece of their so-called economic plan. Remember the Treasurer telling us that this was not just any old budget, not just another budget? It was different to all the budgets in the past. It was different to Paul Keating's budgets and Peter Costello's budgets and Wayne Swan's budgets. It was different because it was special, the special Treasurer told us. He had something different to all the other treasurers. He had an economic plan—an economic plan he did not even bother to legislate. He did not even bother to bring it before the House until today.

This is the economic plan in which the Treasurer, Scott Morrison's answer to the deficit is to increase the deficit by $50 billion over the next 10 years. That is his big answer to reduce the budget deficit: make it bigger in the meantime. Of course, we know that because the secretary of the Treasury told us. The Treasurer did not. The Treasurer stood at the dispatch box and said, 'I have a 10-year plan for our economy,' but what he did not tell us is how much it is going to cost. I asked him the next day after the budget. It was not the most complex question I could have thought of: 'What does the 10-year plan cost over 10 years? Of course, he would not say. He knew the answer, but he would not say. We knew that it would be in the vicinity of $50 billion. He did not want to fess up about that fact. I was reminded by the Prime Minister yesterday when he did not want to fess up to the fact that a million people would be affected by his cuts. He did not want to fess up to that. The Minister for Social Services has been out today saying, 'Actually, 1½ million people will be affected.' But they do not like fessing up to the facts about their particular policies.

The fact of the matter is that increasing the deficit by $50 billion over the next decade is not a plan to reduce the deficit. The government like to lecture everybody by saying, 'We must have belt-tightening. We must do more with less. We must ensure long-term budget integrity,' but then they turn around in the next breath and say that they want to increase the deficit by $50 billion with the corporate tax cut. They say that this is necessary for growth, but the fact of the matter is that the budget is in such a difficult position and is facing such serious challenges that the government and this parliament have to make choices about priorities. We have to make difficult decisions. We cannot do it all. In a perfect world, as I have said repeatedly, of course corporate tax would be lower rather than higher—of course it would be—but so could many other things be improved in the budget: personal income tax; more spending on health and education and important social safety nets. All these things are important, and it is the role of this parliament to make choices.

On this side of the House we make a different choice. We choose budget repair which is fair through reforms to negative gearing and capital gains tax and other important initiatives which we have already announced, such as better funding for our schools and fairer funding for our schools, and we choose not to give away $50 billion in a corporate tax cut. We choose not to say, 'It's important for Australia, with the triple-A rating under such threat, to see this brought about.' We know that the budget is in a parlous state. We just yesterday had a reminder from the Parliamentary Budget Office—a very fine institution—confirming a projected $42.8 billion black hole in the budget due to unlegislated measures, which are not so fondly called 'zombie measures' in the public discourse. There are the measures from the 2014 budget—the budget which cost the member for Warringah and then member for North Sydney their jobs, quite rightly—but this Prime Minister and this Treasurer continue with them. In fact, the return to surplus is dependent on those zombie measures. We would not have a return to surplus at the projected date without those zombie measures, and they are fallacious.

The government has introduced another omnibus bill. They will have to negotiate what they can through the crossbench because they will not get support from this side of the House for cutting payments and making a million Australians worse off, for making people wait longer for Newstart, for making it harder for pensioners who have worked hard all their lives and saved to have some time overseas. We will not be supporting those measures. But guess what: we are also not supporting giving $50 billion away in large corporate tax cuts. It is not a priority for this nation. It is not the sort of reform that this nation, facing the difficult circumstances and budgetary challenges over the medium term that we have, can afford at this time. It just beggars belief, but the Treasurer goes on about the deficit and debt. In fairness to him, he does not say 'budget emergency' or 'debt and deficit disaster' anymore. Those days are gone. That was what they used to say when they were sitting on this side of the House. On that side of the House there is no budget emergency or debt and deficit disaster; there is the capacity to give away $50 billion in tax cuts.

They say it is about—wait for it—jobs and growth. This is their big plan for jobs and growth, and they have some figures to back that up. Treasury analysis that was released on budget day does back up that there will be a gross dividend. What is that gross dividend? It is one per cent. The economy will be one per cent bigger. One per cent is worthwhile if it is going to make the economy one per cent bigger this year. I would say that is a worthwhile contribution. One per cent bigger a year—that is great. But, of course, no, it is one per cent bigger 10 years after the tax cut is implemented in 10 years time—that is, in 20 years time. In 20 years time, they will have a one per cent dividend for the economy. We had a negative quarter last year—indeed, the first negative quarter in a long time which could not be clearly sheeted to clear external factors. It was a substantial negative quarter, without being alarmist. I am sure that this quarter will be positive. What did the government say in response to that negative quarter? 'Yes, but we've got a plan to make the economy one per cent bigger in 20 years time, so don't worry about the negative quarter this time.' Of course, that is not a plan for jobs and growth.

We saw the Prime Minister last week at the National Press Club again. I will give him this: it was a calmer and more prime ministerial performance than we saw yesterday, but that would not be hard. Barnaby Joyce could be more prime ministerial than what we saw yesterday at the National Press Club!

Interestingly, the Prime Minister briefed that he was going to make an announcement that the corporate tax cuts would lead to a $750 increase in wages, but when the speech was released it was not in there. Then it was in the speech he actually delivered, so there was obviously a lot of toing and froing in the Prime Minister's office about the drafting of that speech. Again, $750—a 1.1 per cent increase in wages—was not today, not next year, not the year after, but a $2 a day increase in 20 years time. Well done, Prime Minister! That is the big dividend that the Prime Minister gives us from his big centrepiece economic plan.

We have a situation where, despite his tantrums about text messages and his tantrums about how he was robbed, this Prime Minister presides over a government that is attacking Medicare through freezes on the Medicare Benefits Scheme and wanted to put a $7 tax on going to the doctor. They said that these are the sorts of things that are necessary for budget repair and then they say, 'But, on the other hand, we can afford a $50 billion tax cut for big business.' Well, they cannot—and they will not get support for us for this $50 billion corporate tax cut. We will stand for better priorities than that.

The Prime Minister and the Treasurer like to say, 'But Labor used to support corporate tax cuts.' As I said, we have always said that, in a perfect world, corporate tax would be lower rather than higher, but they have one little problem—well, they have several little problems—with their equation. One that I think is particularly amusing is that they quote the Leader of the Opposition, me and others on parliamentary debates and the debate which was occurring when they were walking in here and voting against the corporate tax cuts. That is what they were doing at that time—the now Prime Minister and the now Treasurer were voting against the corporate tax cut which was smaller than the one that is being proposed by this government. They said it could not be afforded then and, of course, what they have now is a much bigger corporate tax cut, which is completely unfunded.

We will not prescribe to this Laffer curve, Reaganomics-style approach of: 'It's all right; it'll trickle down. We will cut tax and then everything will magically come back and we will whir back into surplus.' That has been discredited continually. I saw our old friend Bronwyn Bishop—which is always a delight—on the television the other night making that case—

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

I interrupt the member for McMahon. The member for Hughes on a point of order, I assume?

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

Under 66(a), I would ask the member if he would take an intervention so I can ask him a question on a passage from one of his best-selling books.

The DEPUTY SPEAKER: Is the member for McMahon willing to give way?

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

I am delighted that the member has been reading for a change but, no, I am not taking an intervention.

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

The member for Hughes will resume his seat.

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

The member for Hughes has a revelation that I have written a book or two, which is welcome. Yes, that book argues for better funding for education, over many pages. That book argues for funding for research and development—will we hear about that? We are not going cop a lecture from this Prime Minister about consistency and standards in public life. This is the Prime Minister who took the Prime Ministership and has sold out everything he ever believed in—this joke of a Prime Minister who stands for nothing but his own ambition; this joke of a Prime Minister who harangued this parliament yesterday not about a million Australian families, not about the need to provide those families with more relief but about his obsession with the Leader of the Opposition. That is what we get from this Prime Minister.

We have a Prime Minister who is devoid of values and a government that is devoid of agenda and devoid of strategy. All they have to fall back on is a $50 billion corporate tax cut. This parliament should debate this. I am glad that, nine months after it was brought in, we are finally getting the chance to debate this legislation. I will tell you what else we should debate: a second reading amendment. I move:

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

“the House declines to give the bill a second reading as the:

(1)Government has failed on fiscal policy, tripling the deficit and increasing net debt by $100 billion, and putting our hard-earned and coveted triple A credit rating at risk;

(2)Prime Minister and the Treasurer have failed to deliver the economic leadership that this country needs and deserves; and

(3)Government’s plan to give a $50 billion tax cut to big business is not affordable in the current fiscal and economic circumstances.”

The government has supported other second reading amendments in the past; they should support this one, because it is a good one. It calls it as it is and says that budgets are a matter of priorities, budgets are a matter of choices. The government has made its choice. As I said, in a perfect world, if we had the budget in balance, corporate tax cuts are something this parliament could decide on and could embark on. But when we are at grave risk of losing the AAA rating on this Prime Minister's watch, when we have a return to budget surplus which is predicated on zombie measures which shall not pass the parliament then, in our view, this parliament cannot make that choice. We cannot make the choice to engage in that $50 billion unfunded corporate tax cut. We can make different choices. We will stand for schools, we will stand for better funding for hospitals, we will protect Australian families to the best of our ability with our votes in this House and the other House, and we will not lend our support to this particular piece of legislation.

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

Is the amendment seconded?

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

I second the amendment, and reserve my right to speak.

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

The original question was that this bill be now read a second time. To this the honourable member for McMahon has moved that all words after 'that' be omitted with a view to substituting other words. The question now is that the amendment be agreed to.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

Recognising the link between corporate tax rates, investments and jobs is not rocket science. Lower tax rates mean more revenue is retained by businesses, which means more for investment in those businesses and therefore more jobs. More vigorous, more profitable businesses with more jobs means a growing national economy, which means more prosperity to be shared by all. It is a simple, well-tested equation in capitalist systems. The Labor Party used to understand that but, listening to the shadow Treasurer's speech just now, I genuinely believe they might be living in la-la land.

The member for Hughes wisely interjected and asked if the shadow Treasurer would be prepared for him to read out some quotes from his book, and he denied that, so let me do so. In 2013, the shadow Treasurer, from whom we just heard, against company tax rates, said:

It's a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.

On ABC Lateline in 2014, the year after he wrote those words in his book, he said:

I'd like to see it lower over time. I think we've had 14 years of having the corporate tax rate stable. That's too long. Over time, I'd like to see is lowered.

On the 7.30 in 2013, he said:

I think we should have the ambition of lowering company tax. … it would be the approach that we would take that our ambition would be lower company tax rates … because it does improve our overall international competitiveness.

In 2015, the shadow Treasurer said:

I would like to see the corporate tax rate come down over time. I'd previously said that our nation should be aiming for—

wait for it—

a 25 per cent corporate tax rate.

This is the shadow Treasurer from whom we have just heard the complete opposite. His get out of jail card today is:

Only in a perfect world.

Only in a perfect world would the shadow Treasurer accept a cut in corporate tax rates. What does that actually mean? Does that mean his book can only be read when the wicked witch of Narnia is dead and Aslan the lion takes over? Or is that the la la land once the Greens and Labor get back into power one day, and suddenly it is a perfect world and his book is relevant? Either he defies his own logic or, indeed, he is in la la land. It does not stop with the shadow Treasurer.

Indeed, on 2 May 2010 the then Labor Prime Minister Kevin Rudd announced a reduction in the corporate tax rate from 30 per cent to 28 per cent for small businesses from 2012-13 and to all businesses from 2013-14. In June 2010, he told the Business Council of Australia:

The government's target is to bring it to 25.

The May announcement was part of the government's response to the Henry tax review, which had recommended a cut in the corporate rate to 25 per cent—the same level that is being put to the parliament in this bill.

On 2 July 2010, the Gillard government reduced the cut proposed by former PM Rudd to 29 per cent, citing the state of the economy, but Labor never actually introduced the legislation to implement it. Why? It was because the Greens would not support it. The then de facto government of the country, the Greens, with their nigh on Marxist views of the world, denied the attempt by Labor to cut the corporate tax rate. The posture of bowing to the Greens has been fastidiously maintained under the leadership of the Labor Party by the backflipping Leader of the Opposition.

In his 2015-16 budget reply speech, in contradiction of the views held by his two immediate predecessors, the opposition leader supported a cut in the corporate tax rate for small businesses, and small businesses only, to 25 per cent. Tax cuts for larger businesses disappeared altogether from Labor tax policy, even though Julia Gillard in 2012 told the parliament:

If you are against cutting company tax, you are against economic growth.

This is the former Labor Prime Minister.

If you are against economic growth, you are against jobs.

And Labor, especially the opposition leader, now not only formally supports the Greens policy on corporate tax reform; he supports the Greens anticapitalist rhetoric to boot.

The attacks on big business by the opposition leader would not be out of place coming from Marx or Engels. His language of attacking big business oozes with contempt but, unsurprisingly, given the record of the Leader of the Opposition, this has involved yet again a double backflip. In 2011, addressing former Prime Minister Rudd's policy for a cut from 30 to 28 per cent, the now opposition leader said in this chamber:

More capital means higher economic activity and higher wages.

In 2011, he also said this:

As Australia is buffeted by the economic affairs overseas, we understand that lowering corporate tax assists the creation of jobs. And what can be more important in this country than the creation of jobs.

And in a speech to the national conference of the Australian Council of Social Services, the opposition leader said:

Friends, corporate tax reform helps Australia's private sector grow, and it creates jobs right up and down the income ladder.

But the Greens said no, and the Leader of the Opposition promptly fell into line via another 180-degree U-turn, involving a whole new take on economics altogether and a whole new take on tax policy. He stays in line with the Greens to this very day.

Now, he argues: 'Tax cuts? That's just trickle-down economics. The benefits all go overseas. Tax cuts don't boost employment, just inequality.' In other words, he is now saying the polar opposite of what he was saying in 2011. The Leader of the Opposition, clearly, will say whatever he can and do whatever he can, no matter how deeply it might contradict his previous positions, to keep faith with a powerful Left—a Left in the Labor Party and outside of it—so that he can keep his own job.

But please do not think it is just big business that the opposition leader does not like; he has a demonstrable track record of falling in line with the Greens when it comes to tax rates for small business too. For example, when the Greens in 2012 signalled under their then new leader Christine Milne that they would not support Labor's proposed corporate tax cut, she even put a cut-off point on the Greens support for tax relief for small businesses. Do you know what that cut-off was, Acting Deputy Speaker Hogan? The Greens cut-off was a maximum turnover of $2 million. To give her some minor credit, there is no doubt that businesses with a turnover under $2 million are vitally important to our economy, but it now reflects the smallest end of small business. In fact, they are often now referred to as microbusinesses. The meat in the small business sector are those with turnovers of between $2 million and $10 million. These small businesses, as the Treasurer pointed out in his second reading speech, employ 3.4 million Australians; 3.4 million Australians are employed by small businesses with a turnover of between $2 million and $10 million. That is a huge contribution. But, of course, the Leader of the Opposition again dutifully fell into line with Greens policy, because Labor, too, now agrees that any business with a turnover above $2 million cannot have a tax cut.

If there is to be a significant tax benefit to small businesses in this country, with the flow-on benefits that the opposition leader himself outlined in 2011, then it will be via the coalition's plan, which is for a cut to 27½ per cent from the current 28½ per cent that was legislated by the Abbott government—down from 30 per cent—and reaching 25 per cent by 2026-27, without that artificial barrier of $2 million turnover favoured by the Greens and their fellow travellers, the Labor Party.

Businesses with turnovers over $10 million will reach the same target of 25 per cent via increases to the threshold for the 27½ per cent rate—to $25 million in 2017-18, $50 million in 2018-19 and $100 million in 2019-20—until all companies are covered by 2023-24. The rate itself will then be progressively cut from 27½ per cent until it reaches that 25 per cent point for all businesses in 2026-27.

These are urgently needed tax reforms. As the Treasurer himself highlighted, we have gone from, in 2001, having one of the lowest corporate tax rates in the world to now having among the highest. The average rate across the EU is 22½ per cent. Across the OECD, it is 25 per cent.

In our region, our current rate of 30 per cent is way off pace. South Korea has a 24 per cent rate, the same as Laos and Malaysia. In Thailand and Vietnam, it is 20 per cent. In Singapore and Taiwan, it is 17 per cent, and Hong Kong has 16½ per cent.

This chasm between our rates and the rates of our competitors and trading partners is a double-edged sword for our economy and for the Australians who want jobs. Not only are global companies less likely to invest here or expand here because of high tax rates when they could be enjoying higher retention of their earnings elsewhere, but some of our own companies may indeed move offshore to take advantage of more competitive rates.

In light of these realities, those who criticise the plan should also contemplate the timeframes that are involved and the fact that these changes are phased in over a considerable period. The changes mean that a tax rate of 27½ per cent will reach the biggest of our businesses in 2023-24. It will be 2026-27—that is almost a decade from now—before the rate hits 25 per cent, and they still oppose it. That is a fair way down the track, when the New Zealand rate has been at 28 per cent since 2011, and with Asia ranging right now from 24 per cent to around 17 per cent. These are numbers that give context to what this bill seeks to do.

This is not a massive giveaway, as the Labor Party suggests. Having abandoned all reason in relation to its previous positions on corporate tax reform, it now protests. This is a measured, responsible, modest effort to ensure that we retain a sufficient degree of international competitiveness to continue to attract and promote investment in our own country.

While our rates will still continue to be higher than some of our competitors, subject to events we cannot foresee elsewhere, we do have other positives that we can sell that will stand us in good stead to attract investment to this country: we are a stable democracy; we are a secure nation; we live by the rule of law; our financial safeguard institutions are globally well regarded; we have some of the strongest and safest banks in the world; we have a highly skilled workforce and a lifestyle that is the envy of many; we have world-class health and education systems and a reliable and trustworthy business culture.

As long as we maintain these standards, we can continue to attract the level of investment that we have previously enjoyed from both domestic and international businesses and our economy can grow with jobs and have opportunities for all, even if our corporate tax rate, as we do bring it down, becomes simply ballpark competitive. That is the aim here: a competitive rate, not a discount rate.

It would difficult to be as upbeat about the future as we might like to be, if this plan were to be rejected, which is what Labor and the Greens want. Their opposition is just one of many instances where their policy positions have, long ago, lost touch with any semblance of reality. This bill is a gauntlet for the Labor Party, one of many gauntlets that we need to throw down, because only if they break from the Greens and come to common sense will Australia benefit.

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

In my remarks today, I want to deal with the three arguments that the coalition has made for cutting the company tax rate: the first, that Labor once supported cuts to the company tax rate; the second, that other countries have lower corporate tax rates; and the third, that it will boost growth. I want to explain to the House in turn why each of these arguments is wrong.

The coalition first of all claims that Labor, in the past, has supported company tax rates. It is certainly true that Paul Keating took the approach of broadening the base so you could lower the rate. Against the opposition of Liberals and Nationals at the time, Paul Keating brought in things like capital gains tax and fringe benefits taxation. He ensured that our tax base was broader and, in so doing, was able to finance a rate cut. This broadening of the corporate tax base was the same philosophy that underpinned the Gillard government's approach, and then we said at the time we would support a modest reduction in corporate tax of one or two percentage points.

What has changed since then? Unfortunately, a lot has changed since then. In 2013, net government debt in Australia was $184 billion; now, net government debt is $317 billion. Net debt has increased by $113 billion since the coalition came to office. How much is that? That is about $4,500 for every man, woman and child in Australia. So everyone listening to this debate today will be listening knowing that the Liberals have increased the government debt each of them owes by $4,500. If you need an answer to the question, 'Why is now a bad time to cut the corporate tax rate?' the simple answer is: '$4,500 of Liberal-National debt'.

What have they done about that? Have they pulled the debt truck out of storage, maybe upgraded it to a debt B-double? No. They no longer talk about debt. They no longer claim that it matters. But, according to modelling—which did not come out at the time of the budget but was dragged out of the Liberals and Nationals—this is a $50 billion corporate tax cut. According to modelling by Independent Economics, it is a tax cut costing $48.2 billion and, when it is complete—when it is ripe—its annual cost will be $8 billion. That is a massive hit to the government coffers at a time when the government have sent debt soaring. The Liberals and Nationals used to talk as though they cared about debt; now they simply increase debt and say, 'It is no longer a problem; we can just cut the tax base.' That is the philosophical approach that Ronald Reagan took in the 1980s: just ramping up debt, cutting taxes and leaving the problem to someone else. Labor cannot support a cut to the company tax rate when the Liberals and Nationals have so badly increased debt in this country, from $184 billion to the $317 billion currently projected in MYEFO, a near doubling of Australia's government debt.

The next argument they make is that other countries have lower corporate tax rates than Australia and Australia's corporate tax rate is uncompetitive. We can easily move through countries which enjoy strong economic performance yet have corporate tax rates higher than 30 per cent: France, 33.3 per cent; Japan, 30.86 per cent; the United States, 40 per cent. Corporate tax rate comparison across countries is invariably problematic, so here I am drawing on 2016 numbers from KPMG's corporate tax rates table. Australia has a rate, as honourable members know, of 28.5 per cent for small businesses and 30 per cent for everyone else. And the government proposes to bring the overall tax rate down to 25 per cent. A number of other countries have tax rates between 25 and 30 per cent, among them New Zealand, at 28 per cent; Canada, at 26.5 per cent; and Germany, at 29.72 per cent. The fact is that having a company tax rate well above 25 per cent has not stopped countries, like the United States and Germany, from growing strongly.

There is one more little secret that those advocating a company tax cut do not let you in on, and that is dividend imputation, an unusual system in Australia shared in the OECD only by New Zealand. What does dividend imputation do? It gives back a share of the company tax revenue to individual taxpayers. According to Geoffrey Kingston's 2015 analysis in JASSA:The Finsia Journal of Applied Finance, a rough rule of thumb is that dividend imputation gives back a third of company tax revenue. So, in terms of what the government raises, a 30 per cent rate with imputation raises about as much as a 20 per cent rate without imputation. If you hear anyone do international corporate tax comparisons and not mention imputation, you know they are being deeply disingenuous. So Australia's 30 per cent rate raises what Britain's rate of 20 per cent without imputation raises. Those facts are simply ignored by those opposite.

The Treasurer, extraordinarily, in question time yesterday was arguing that I should be supporting a corporate tax cut because my co-author Richard Holden supports a corporate tax cut. The Treasurer seems to have a very unusual notion of how economists work. He thinks that once you have written an article someone you must be in mind meld with them. Every future position they take, you have to take. Clearly, that is the way things work over on the government benches. They are in mind meld about everything, aren't they? Apart from maybe Cory Bernardi, or George Christensen, or the next break-out. The fact is that you can write papers with people and then disagree with them afterwards.

Mark Coulton (Parkes, Deputy-Speaker) Share this | Link to this | Hansard source

Order! I remind the member for Fenner to refer to members by their titles.

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

I thank you for that wise comment, Mr Deputy Speaker. The member for Dawson seems to be straying off the reservation. We will see whether or not he is able actually to put his vote where his mouth is next time the vote on a banking royal commission comes to this House. He could not quite manage it on the last sitting day of last year, but let's hope, for the sake of the electors of Dawson, that he is able to do it next time around.

The fact is that powerhouse economies around the world have corporate tax rates comparable with Australia's, ignoring imputation. Take into account imputation, compare us with countries that have rates a third lower, and Australia's corporate tax rate raises approximately what is raised by even the countries with the lowest corporate tax rates in the OECD.

Then we come to the government's argument that a corporate tax cut will boost growth. In order to knock down this argument you have to go no further than the government's own analysis, a paper released on budget night titled Analysis of the longterm effects of a company tax cut. You have to work through this paper fairly carefully in order to work out exactly what the government's argument is. First of all, let's start with the fact that domestic shareholders barely benefit from corporate tax cuts. As the Grattan Institute's John Daley has pointed out, local shareholders only gain if profits are reinvested rather than paid out. Our firms have pretty high payout ratios, so most of the $8 billion annual gain from a corporate tax cut will, in the first instance, go overseas.

Mark Coulton (Parkes, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour, and the member for Fenner will be given an opportunity to conclude his speech at that time.