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

It is a great pleasure to rise this afternoon to speak on the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016. Firstly, the necessity of this bill should be self-evident to every single member of parliament. We must have a competitive corporate tax rate in this nation if we are going to enjoy future prosperity and job creation in this country.

Let's have a look at what a few of the experts in this area have said in recent weeks. Firstly, the Governor of the Reserve Bank, Dr Philip Lowe, a fortnight ago at the A50 Australian Economic Forum, said:

… there is no shortage of things that could be done to lift our performance.

He continued:

… it is a competitive world out there, and other countries see these opportunities too.

He went on:

… we need to make sure that our tax system is internationally competitive. One example of this complication is in the area of corporate tax, where there is a form of international tax competition going on in an effort to attract foreign investment. Like other countries, we face the challenge of responding to this …

The Governor of the Reserve Bank is exactly right.

We are seeing around the world countries reducing their rate of corporate tax. The UK is reducing its rate to 20 per cent. The US, under President Trump, has stated that the US corporate tax rate will be reduced to 15 per cent. Our cousins across the Tasman, the New Zealanders, have recently reduced their corporate tax rate from 30 per cent to 28 per cent. Likewise, we see Hong Kong and Singapore at 15 per cent and 17 per cent. A 30 per cent corporate tax rate in 2018 going on to 2026 will make our nation uncompetitive when it comes to attracting capital and to getting people to invest.

But it is not only the Governor of the Reserve Bank. Yesterday, Treasury Secretary John Fraser implored parliament to consider cutting the company tax rate, saying that it would be absolutely critical that we respond to international competition. I quote the Treasury Secretary from yesterday:

We have to recognise that we are now in a very competitive environment when it comes to corporate taxation and attracting investment—not just with our regional neighbours but countries such as the United Kingdom and, possibly, the United States.

A fortnight ago we had the former secretary Ken Henry state in a speech—a speech that was quite widely reported—that the bill that we are introducing to this parliament to reduce the corporate tax rate to 25 per cent by 2026-27 is not enough. He said that was too slow. He said a much lower tax rate:

… or some other mechanism that reduces substantially the cost to Australian businesses of equity capital sourced from abroad … achieved much more quickly than is presently under consideration by our Parliament.

Yet, we have the Labor Party and the Greens, with a couple of crossbench senators, blocking what is a sensible reform which all the economic experts say is what we need to maintain our international competitiveness. Is it any wonder that Ken Henry, in his speech last week, warned about political tactics that confuse and frighten Australians? He is talking about the tactics of the Australian Labor Party with regard to corporate taxation. Ken Henry said:

Populism supplies the munitions. And the whole spectacle—

the dreadful spectacle—

is broadcast live via multimedia, 24/7.

He said 'today's dysfunction' stands in marked contrast to earlier periods of political success. He is talking about the Australian Labor Party, which, for political reasons only, is trying to confuse and frighten the public about the need for this tax cut.

There was a time when the Labor Party did know the importance of reducing corporate tax. This is clearly detailed in the book by the current member for McMahon and the current shadow Treasurer. It is called, Hearts & minds: A blueprint for modern Labor. There is a very charming picture of the shadow Treasurer on the front page, resplendent with his orange tie. Mr Deputy Speaker, you may be interested to know that this book has a ranking on the Amazon top-seller list. When I looked, it was number 7,222,116. With a few more copies after I discuss it today, we may be able to break that seven million barrier!

The book starts off with—on page 17—a quote from Vladimir Lenin, as, often, many Labor books do. Vladimir Lenin said in 1913 that 'the Australian Labor Party does not even call itself a socialist party'. I am not sure whether the member for McMahon is complaining about the comment or not. But the key section of the book is when we go to page 63. There is an entire chapter with the heading 'Promoting growth through cutting company tax'. I will quote from it:

One of the more controversial reforms by Paul Keating as Treasurer was slashing the corporate tax rate from 49 per cent to 39 per cent in 1989.

That was singling out one of many Keating reforms. It goes on—this is the member for McMahon:

I was a fresh-faced Labor Party branch member at the time, and I recall the party as a whole being incredulous that a Labor government would cut the tax rate for 'fat-cat companies'. I remember a motion at a Young Labor conference calling for the corporate tax rate to be lifted to 60 per cent to pay for a program of social reform.

The member for McMahon goes on in his book:

But Keating knew that the corporate tax rate needed to be cut to make Australia competitive, that capital and investment would flow to tax-competitive nations and that this was an important job-creation move. Today capital is even more mobile than it was then and it is important that our corporate tax rate is competitive.

None of us could have said it better than the shadow Treasurer, the member for McMahon. But today he has completely abandoned sensible economic policy to frighten, scare and confuse the Australian public with complete and utter populism that will damage this country in the long term.

It is interesting if we go back to that Keating tax cut of 1987-88. He cut the corporate tax rate, which was then 49 per cent, to 39 per cent. That is a 10 per cent reduction—an effective rate drop of 20 per cent. Members of the Labor Party would ask the obvious question: how much did that very large reduction in the corporate tax rate cost the federal government? What was the reduction in money coming into the Treasury from corporate tax as a result of Paul Keating's tax cut? I will tell you. You would expect maybe a 20 per cent reduction in the tax revenue, maybe a 15 per cent reduction. Actually, the exact opposite happened. The next year, 1988-89, at the lower rate of tax, we got 16 per cent more government revenue. The following year we got 26 per cent more and the following year nine per cent more. So, four years after Paul Keating reduced the rate of corporate tax, we got an extra 60 per cent in government revenue from corporate tax.

That is not the only example. What happened when Treasurer Peter Costello reduced the corporate tax rate from 36 per cent to 30 per cent? Again, as the educated socialists would ask themselves: how much did this cost in government revenue? Surely at a lower rate of corporate tax you would get less revenue. But again exactly the opposite happened. In 1999-2000, at a 36 per cent corporate tax rate, we were getting $23.9 billion in corporate tax revenue, but at the lower rate in 2001-02 we were getting 13 per cent more—$27 billion. In the next year, 2002-03, it increased again, by 23 per cent. In fact, five years after Treasurer Costello lowered the corporate tax rate we were not getting less tax; we were getting 80 per cent more corporate tax revenue.

This is not unique to Australia. Exactly the same thing has recently happened in New Zealand. In their 2010 budget, John Key lowered New Zealand's corporate tax rate from 30 per cent to 28 per cent. Again, if you follow the line of the Labor Party, this would have cost the New Zealand economy. They would have had to pay for that lower tax rate. What happened? Exactly the same thing. In 2011 there was only a small increase—2.7 per cent—but in the following year they saw company tax receipts increase by 24.9 per cent, then six per cent, then 2.7 per cent, then 11 per cent, then five per cent. Year after year, corporate tax revenue, at the lower rate, increased faster than their GDP. By the time they got to 2016, the New Zealand Treasury was getting 59 per cent more in corporate tax receipts, at the lower rate, than they had been getting at the higher rate.

Canada is another example of the same thing. In Canada they lowered their corporate tax rates in 2010 at the federal level from 18 per cent to 15 per cent and also at the state level. So, combined, there was a reduction from around 30 per cent to 27½ per cent, depending on the different Canadian states. Again, what happened? How much taxation revenue did that cost the Canadian government? Again, the answer is not a single cent. In fact, five years after the tax rate cut, they were getting 38 per cent more taxation revenue.

Why does this happen? This happens exactly as set out and mentioned by the former member for McMahon in his book. He understands that it is a Labor thing to reduce company tax because it promotes investment, it creates jobs and it drives growth. That is exactly what we need to do in this country. Labor members are out there misleading the public by pretending that, if you give a corporate tax rate cut to companies in Australia, that means you take the money away from somewhere else, which is a complete and utter fallacy. It is a deception, but it is a statement that we will hear repeated by Labor members over and over in this debate, because they do not understand how our economy runs.

If we have a lower tax rate, we encourage more investment, we get more jobs, we get more growth in the economy and, as the history of our country, of New Zealand, Canada and just about everywhere else has shown, when they lower the corporate rate of tax they end up, after a period of time, with a bigger economy and more taxation revenue. As we go into the decade ahead we need to make sure that we have a competitive nation in all respects. We already have electricity prices double the rate in the USA, and three or four times the rate in Canada. If we want to pay higher wages in the future, we cannot have uncompetitive international rates of tax and uncompetitive electricity prices. I implore members of the Labor opposition— (Time expired)

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

I am of course speaking in support of the amendment that has been moved by the member for McMahon to the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016. This bill does highlight this government's twisted priorities, and the twisted priorities of the Prime Minister, when it comes to the management of our economy and fiscal consolidation and reining in the budget deficit.

Here is just a brief overview of what this government is doing. First off, the Turnbull government have continued their crusade to cut billions of dollars from health. They are on a mission to increase the cost of health care for all Australians. First they tried to introduce the Medicare co-payment. That did not work. Then they tried to introduce a reduction in the rebate for diagnostic imaging. We all know they have frozen the Medicare rebate for a further three years and they have set up a privatisation task force into the Medicare system. They have also cut funding for hospitals and schools.

The then opposition made a solemn promise to the Australian people at the election in 2013 that, whether you voted for the Labor Party or the coalition, you would get the same policy on education. Then they went and broke that commitment to the Australian public in the first couple of years. That was, of course, a porky pie. We now know that the coalition, as soon as they were elected, turned around and cut $30 billion from the education budget by refusing to fund the last two years of the Gonski reforms. And while paying lip-service to Gonski's needs-based funding model, the government has simultaneously pulled the rug out from under our schools and our children.

That did not stop their path of destruction. In addition to their pursuance of an American-style healthcare system, they are also trying to introduce an American-style higher education system for universities. Deregulation of Australian universities would result in students being slugged with massive amounts of student debt as a result of their degrees increasing in cost—in many cases above $100,000. This, of course, would just further increase the pressure already heaped on young people through underemployment and housing affordability—an ongoing crisis, which this government has no policy at all to deal with.

But, rather than prioritise health and education, this government is instead intent, through this particular bill, on cutting $50 billion out of the budget by offering big business a tax cut. We are not talking about small businesses here; we are talking, over the course of the next 10 years, businesses with a turnover up to $1 billion. So they are by no means small businesses. It says so much about this Prime Minister and the government's budget position that it is dramatically deteriorating to the point where there is talk now of Australia losing its AAA credit rating and putting further pressure on businesses and, in particular, homeowners in the result of increases in interest rates. As a nation, we simply cannot afford such a massive tax cut for big business, especially when it comes at the expense of our nation's healthcare system and cuts to our children's future by impacting their education.

We have seen over the course of the last couple of weeks the government's proposals to introduce the omnibus bill and cut further social security measures, particularly pensions for single mums and for the unemployed, and paid parental leave. This bill represents this government's twisted priorities. Instead of focusing on investing in education, investing in health care, growing our economy and ensuring that the biggest companies pay their fair share of tax in this country, this government is intent on smashing the most vulnerable in our community—pensioners, the unemployed, people on single incomes, people on family payments—and giving big businesses a $50 billion tax cut through this bill. That is the wrong approach, and that is why I and my Labor colleagues are voting against this bill and supporting the amendment of the member for McMahon.

The detail of the bill contains three measures. The first is the reduction of the company tax rate to 25 per cent. The tax rate for businesses with an annual aggregate turnover of less than $10 million would be 27.5 per cent from the 2016-17 income year. The threshold would then be progressively increased so that, by the 2023-24 income year, all businesses would be at the 27.5 per cent rate. The rate itself would be lowered from the 2024-25 income year until it reaches 25 per cent in 2026-27. Again, it starts out for small businesses. The Labor Party has promised to support the tax cut to 27½ per cent for genuine small businesses, businesses with a turnover of less than $2 million per year, because they are small businesses. These are the people who struggle from week to week to earn an income; they put their life and their whole heart and soul into their businesses. They do deserve some support from the government and some relief, but this bill goes much further than that: it goes on to offer that tax cut down to 25 per cent for businesses that are earning up to $1 billion in turnover.

The bill also contains a measure to increase the unincorporated small business tax discount. This discount provides unincorporated small businesses a tax offset broadly equivalent to the small business company tax cut of 1.5 per cent. The discount is a tax offset equal to five per cent of a small business entity's basic income tax liability that relates to its total net small business income, capped at $1,000. And the bill increases the aggregate turnover threshold to access most small business tax concessions from $2 million to $10 million. The aggregated turnover threshold for access to the small business tax offset would be increased to $5 million, and the current aggregated turnover threshold of $2 million would be retained for the small business capital gains tax concessions.

The bill does represent the government's blind adherence to this notion of trickle-down economics that conservatives in Australia and in other parts of the world seem to be wedded to as their basic and main economic philosophy about how economies should be run. It is the most discredited, useless model for growing economies that has ever been. And it has been proven: nowhere in the world have reductions in taxes resulted in this trickle-down notion of greater wealth for all and growth in the economy. The classic example of that is the United States of America, where, in the 1970s and 1980s, the Reagan administration, followed up by the Bush administrations, introduced this notion of trickle-down economics by rapidly cutting taxes—income and company taxes—in the hope that it would result in greater profits for businesses, employing more people and growing incomes. It did not work. In fact, if you look at the United States today, the legacy of that is still there. It is an economy for which the middle classes have not had real income increases since the 1970s, since Reagan undertook this process of what was called Reaganomics but was trickle-down economics.

So this government's adherence to the philosophy of trickle-down economics is, once again, misguided. The government foolishly believes that massive tax cuts to multinational businesses and major corporations will boost economic activity and investment, the benefits of which will flow to the average Australian worker. It is complete rubbish, it is complete garbage and it is a discredited notion of economic advancement.

The actual benefits of this modelling, of this particular proposal that we debate today, have been modelled by the Treasury. The government put out, with last year's budget, a paper based on the modelling of growth in the economy from a corporate tax cut. The benefits are insignificant. The Treasury's own modelling—the government's own modelling—indicates that GDP would improve by 0.1 per cent each year, if this tax cut were implemented. That is less than one per cent over the course of a decade. It is a rounding error, and that is the government's own modelling. Even less is added to net employment over the course of those years.

The previous speaker mentioned the Governor of the Reserve Bank and the speech he recently made as support for the corporate tax cut. But the Governor of the Reserve Bank, Dr Philip Lowe, made the very important point last week that, from a global perspective, a corporate tax cut is not actually that useful because, although you may be reducing income taxation levels in one country, you are not actually growing the pie of investment globally. It just means that investment may shift from one country to another. So this notion that this tax cut, this bill, will improve the economy and will improve employment has been rubbished by not only the Treasury modelling but experts who work in this field. If you want to improve employment outcomes, rather than cut taxes for big businesses—that, frankly, do not need it and will hardly notice it—invest in the education of our children instead, invest in adult retraining, invest in vocational education and training, and properly support TAFE and training that will actually benefit the lives of Australians.

In line with our 2016 election commitments, Labor does not support these tax cuts for big businesses. It is part of our policy. Labor's policy on tax cuts for small business is: reducing the company tax rate to 27½ per cent for businesses with a turnover of $2 million—and that threshold remains consistent with the small business definition retained by the Australian Taxation Office—and increasing the unincorporated small tax discount from five per cent to eight per cent and only for businesses with a turnover of less than $2 million, and not proceeding with the increase in the small business entity threshold. Our position, costed by the Parliamentary Budget Office, would save $4.4 billion over the forward estimates and $50.1 billion over the medium term.

In conclusion, what really gets to me and demonstrates the hypocrisy of this government and its members—all of its members, particularly the person who spoke before me—is, when the Gillard government proposed a reduction in the company tax rate from 30 per cent to 28 per cent, have a guess who voted against it? It was the then opposition leader, Tony Abbott, and all of his merry men and women of the coalition. They voted against a corporate tax cut for small businesses when it was proposed by Labor many years ago. So they come in here with this holier-than-thou notion that this is good economic policy and that Labor is playing politics. It is rank hypocrisy because they have form on this: they voted against it when it was proposed by the Gillard government for small businesses. And, unlike this government, who, in the face of a deteriorating budget bottom line, chooses to throw money at big business, Labor has its priorities firmly set on everyday Australians that need the support to go on to achieve great things. Investing in education, investing in health care, investing in renewable energy, and investing in vocational education and training are the best ways to do that. I urge everyone to vote against this bill.

Julian Leeser (Berowra, Liberal Party) Share this | Link to this | Hansard source

I rise to support the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016. This is one of the most important bills introduced into the parliament since the election. This bill delivers on the government's mandate from the election to provide tax relief for Australia small businesses.

This bill reveals a fault line in our parliament between those on this side of the House in the Liberal and National parties, who want to give a hand to small businesses—businesses who work hard and play by the rules, create jobs and grow our economy—and the Labor Party, which has no plan for economic growth, does not understand small business and is happy to see Australia have an uncompetitive tax rate.

The Liberal Party is the party of small business. We have run small businesses and we have come from small business families. We know that lower taxes mean that small businesses get to keep more of their own money. We know that, with more of their own money, small businesses can grow and employ more people. We know that, without this bill, Australia's company tax rates will be increasingly uncompetitive with the rest of the world. This is a particular danger for us in an age where there is a truly global market for both labour and capital. We should remove as many disincentives as possible for Australians to start a business and, as that business succeeds, have it remain based in Australia. And, unlike Labor, we know there is a difference between income and profit. That is why we know that restricting these measures to small businesses with only a $2 million turnover will not have the economic impact that our measures seek to create.

There are many virtues of starting a small business. As the son of a small business accountant, I see small business as a virtuous activity. Entrepreneurial Australians who start, run and grow our small businesses take responsibility for themselves and are not dependent on others. They take calculated risks and back themselves. They in turn provide employment for other people and give those people opportunities. Finally, small business owners create a legacy for their family and the country, and that is why small businesses play such an important role in the life of our nation.

To give an outline of this bill, it reduces the company tax rate for small businesses from 28½ per cent to 27½ per cent. By 1 July 2026, the corporate tax rate for all companies will fall to 25 per cent. This lower rate will apply to all companies with an annual turnover of less than $10 million. Since 1 July 2016, unincorporated businesses with an annual turnover of less than $5 million have been able to access an increased unincorporated tax discount of eight per cent—that is an increase of three per cent—capped at $1,000. The discount will increase to 16 per cent by 2026-27. Businesses with an annual turnover of less than $10 million will be able to access many small business concessions that were previously only available to businesses with a turnover of less than $2 million, including access to immediate deductibility for assets costing less than $20,000, until 1 July 2017, as well as simplified stock-trading rules, simplified methods of calculating PAYG instalments by the ATO, and the option to account for GST on a cash basis and pay GST instalments as calculated by the ATO. All these measures are helping small business and boosting the broader economy.

Australia's international tax competitiveness is vital to the success of the economy. Businesses shop around for lower tax jurisdictions to headquarter their operations. If you do not think this is the case, look at one of Australia's great global business success stories, News Corporation. For years it had its base and held its AGMs in Adelaide, but in the mid-2000s it moved to Delaware, in the United States, to take advantage of a more generous corporate tax regime.

In 2001, during the Howard years, Australia had one of the lowest corporate tax rates in the world. Australia's corporate tax rate is now uncompetitively high—currently the sixth highest in the OECD. Australia's corporate tax rate is currently at 28½ per cent. To compare this with other countries, the United Kingdom has a tax rate of 20 per cent; Canada, 26½ per cent; China, 25 per cent; and Korea, 24½ per cent. The EU average is 22.09 per cent, the OECD average is 24.81 per cent and the global average is 23.62 per cent. Our tax rate is currently around five per cent higher than the global average.

This bill is part of a broader small business agenda. Ask any small business owner about completing their BAS, and they will tell you that it is taxing not only in a literal sense but also in the time it takes to complete their paperwork. New, simpler reporting arrangements will be rolled out to all small businesses from 1 July 2017. This will free up time for business owners to invest in and employ additional staff, as well as take some well-deserved time off.

On this side of the House we understand the importance of reducing the paperwork burden for small business more broadly. That is why we have already delivered $4.8 billion in red-tape savings in our first two years in office. That is more than double our election commitment. Now we are broadening the regulatory reform agenda to focus on regulation reforms that directly enhance innovation, competitiveness and productivity. The government will simplify business reporting of tax and superannuation with the implementation of single-touch payroll, giving employers the ability to automatically report their pay-as-you-go withholding to the Australian Taxation Office.

On this side of the House we understand that small business needs access to affordable finance. As an emerging funding source, crowdsourced equity funding has the potential to spur innovation and complement the emerging peer-to-peer lending market that is giving small business greater borrowing choice. That is why we are removing regulatory obstacles to businesses using this source of funding.

The government's enterprise tax plan will have a positive impact on Berowra businesses. There are almost 15,000 small businesses in my electorate. From the thousands of examples, let me give you a few in the retail, manufacturing and services sectors which help illustrate how the enterprise tax plan will help Berowra's small businesses.

Pennant Hills Dry Cleaners is run by Berowra locals Tony and Joanne Fajloun. They know the positive impact of the enterprise tax plan. Recognised by Rotary with a Pride of Workmanship award, Tony and Joanne run one of the best dry-cleaning businesses in Sydney. Tony and Joanne represent everything that any Australian should aspire to. They are second-generation dry cleaners who have worked in the industry for over 15 years. They get up and go to work every day. They work hard, pay their taxes and put food on the table for their family.

I spoke recently to Tony and Joanne about the challenges they face in running their small business, as well as what a tax cut would mean for them. Tony and Joanne face increased power bills because of the increasing cost of electricity. They say their power bills have grown four times over the last 10 years. They have installed a gas system to try and reduce future costs, but a tax cut would obviously help them to reduce costs. A tax cut would give Tony and Joanne the ability to re-invest in their business and hire additional employees. A tax cut would allow them to employ someone so they can spend more time with their family. It is a rare occasion when Tony and Joanne are able to enjoy a weekend off. With tax relief, they would have more time to spend with their son, who works in construction.

Another great Berowra business success story is WashBox. WashBox is a product manufactured by Arcadia-based company GeoSentinel. WashBox is used on construction and industry sites where wet trades need to clean up. A WashBox at a location can save up to 3,000 litres of water a week, as tools are washed and the wastes are extracted from the water and not flushed into sewers or discharged elsewhere. Trades such as painters or plasterers can clean their tools and brushes in the box, which has several environmental benefits, including reducing the fresh water used by up to 90 per cent; eliminating stormwater, sewer and groundwater pollution; reducing trade waste to landfill; and 100 per cent recycling of liquid waste.

I asked Andrew Kenyon from GeoSentinel what a tax cut would mean for his business. Mr Kenyon told me that the benefits of the government's enterprise tax plan will allow GeoSentinel to continue growing and expanding their business. He said:

At the moment we're really focussed on international expansion. More assistance in the innovation space would be helpful, it is challenging to get private funding sometimes when you're a business like ours. Further tax concessions and cashflow support would really assist us in that capacity.

Ray Becchio runs a successful business in the construction management industry—Becchio Pty Ltd. Ray is from Hornsby but works all over Sydney with his son, who is a carpenter. Ray told me that the tax cuts proposed by the government will go a long way to helping small businesses like his across Berowra and Australia. Ray emphasised that, by having more money in his pocket at the end of the day, he and other small business owners will be able to reinvest in their business and hire more staff. This is exactly the kind of activity we need to be supporting—giving the Australian people the freedom they need to create more jobs and contribute to the overall economy.

A new business in my electorate is the Steam Yard Cafe. The Steam Yard Cafe is a small family business that has been operating for just over eight months in Galston village. Brigette and George Nader, along with their five sons—Jacob, Luke, Ben, Zack and Daniel—run the popular new cafe. I have to add that they make a great coffee and breakfast. The family have a couple of other employees, but they are working flat out to keep the doors open seven days a week. I asked them what a tax cut would mean to them. Brigette was thrilled to hear this was going to be spoken about in parliament today and she said that this would make a huge difference. She told me that the family would be able to put more money back into the business and help it grow. They would also be able to put more staff on and reach their goal, which they say is servicing the entire local community.

The final Berowra business I want to speak about is Julianne's Kitchen. Julianne Lever is another outstanding small business owner in my electorate. I am so proud of her success. Just a few years ago Julianne, a highly experienced chef, started her delicious range of handmade terrines, pates and fruit pastes out of her basement in Westleigh. The business quickly expanded and now operates out of a factory in Hornsby and sells products all over Sydney. Julianne's Kitchen is a husband-and-wife team. Julianne and Zlat employ four local residents and are constantly looking to expand. On what the proposed bill means to her, Julianne said:

I'm a very hands-on business owner. For us to grow our business I need to be able to get out on the road, increase sales and grow the business. We can grow our business and employ more people. These tax cuts are very important for what we plan to be doing this year.

Those were just a few of the 15,000 small business success stories in Berowra outlining why a small business tax cut is so important.

What are the alternative policies to our enterprise tax plan? Labor incorrectly believe that businesses with a turnover—not profit—of more than $2 million are large businesses. Such a position underscores how little Labor understand small business. Such microbusinesses are not large global corporations. Many are family businesses where mum-and-dad operators do not even pay themselves much of a salary in order to meet the payroll and expenses of their business. Labor's alternative is higher taxes for hardworking Australians and Australian small businesses. Labor's motto is: 'We put people first'—a very nice sound bite, but a horrific deception of the Australian people. By their actions Labor demonstrate that they do not understand small business and they do not understand the economy in general.

Labor are a threat to our AAA credit rating with their higher taxes, higher debt and higher deficit. Labor's policies would add $16.8 billion in higher deficits to the budget—with no plan for budget repair. Labor reject our enterprise tax plan. They want to deny small businesses more growth. They want to deny them access to further investment and growth opportunities. But this was not always the case. Labor used to support lower company tax rates. In 2011 the Leader of the Opposition said:

Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

In 2013 the shadow Treasurer wrote:

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

But that was then and this is now.

In conclusion, former Prime Minister of Australia John Howard epitomised the Liberal Party's strong philosophical and practical support for small businesses. As the son of a small business garage owner he was committed to the principle that by helping business, whether small or large, we are helping people to look after themselves, to look after their families, to look after their employees and to make a contribution to the entire country. At the Council of Small Business Organisations of Australia conference in 2004, Mr Howard said:

… in the long run what is required is for a government and a country to give a climate which is conducive to hard work and risk taking and business enterprise, and also to produce an economic environment that encourages all of those things …

This is exactly what the Turnbull government is doing. Through this bill, through our National Innovation and Science Agenda, through our crowdsourced funding legislation and through a raft of other policy measures we are backing those Australians who want to back themselves and to turn good ideas into successful businesses that employ staff, create new products and services and make a huge contribution to our economy. It is with great pleasure that I commend the bill to this House.

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

Under this government what happens when company profits go up? They continue to prosecute their argument for $50 billion of tax cuts for big business and the big banks. At the same time we are seeing this government refuse to take any action whatsoever about the fact that low-paid and vulnerable workers are going to be taking a pay cut at the same time. Wages growth is terribly slow in this country. It is as slow as it has been since they started taking the WPI figures back in 1997. Underemployment is rife. It is at a record level since records started being taken in 1978. Company profits, though, are doing pretty well. So you would think that, if a government had its priorities right, it would not say: 'What can we do to change the way that we run the budget in this country? How about we get rid of $50 billion of revenue? We can give it away to big corporations and the big banks while at the same time we can continue to pursue cuts to university funding, cuts to family tax benefits and attacks on pensioners and make it harder for people to bear the cost of living.' Yet that is the bill we are debating here today, the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016. It is a bill to give that tax revenue to big corporations and the big banks.

The potential dividend is very low. Look not at what the government is saying about this policy, which of course is in a sort of fantasy land where trickle-down economics just works—you just give more money to people who are already at the top end of town and somehow it just trickles down to the rest of us—but at what the independent experts are saying. They are very sceptical about the sorts of results and dividends that this policy will actually yield.

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

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour. The member for Griffith will be given an opportunity at that time to complete her speech.