Andrew Giles (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the amendment moved by the member for McMahon to the second reading of the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016. I was interested to be in the chamber for the contribution of the previous government speaker, the member for Dunkley, a few moments ago. A couple of his assertions require some response. He invited those of us on this side to come to Frankston and look his constituents in the eye in respect of our opposition to the measures contained in this bill. I am very happy to do that. I am very happy to go to Frankston and other suburbs in his electorate and ask his constituents whether they would like their member of parliament to be preferring $50 billion of tax cuts mostly going to big business, in particular the big banks, or whether they would like a government that is on their side, a government that is committed to standing up for penalty rates, a government that is committed to maintaining our social compact. I think I know the answer, and I hope that the member for Dunkley is prepared to have these conversations all the way through to the next election.

There were a couple of additional matters that he raised. In supporting the bill, he spoke about job security and he spoke about wages growth. These are pretty extraordinary contributions in the times that we find ourselves in. If the member for Dunkley is concerned about job security, there is plenty he could do. He could start perhaps by dusting off former Minister Abetz's Productivity Commission inquiry into our workplace laws and reject pretty much everything that is in it. There is much that could be done by this government and any government concerned about Australian people if it were minded to look at the way the world of work is changing, and not for the better, for everyone who works for a living.

The attack on penalty rates, the refusal to stand up for the 700,000 Australians who depend on penalty rates to make ends meet, is the tip of the iceberg in terms of what is happening in Australian workplaces. Job security is an enormous issue. It requires the attention of a government that takes developments in the world of work seriously and looks at measures which should be taken to increase job security. Of course, the agenda of this government is precisely the opposite. He also talked about wages growth. This is quite extraordinary but perhaps goes to the heart of the ideological presumptions that underpin this bill and indeed this government. Wages growth, as you would be well aware, Deputy Speaker Mitchell, is at a record low in Australia, and the government has no interest in doing anything about it through the measures contained in this bill or otherwise.

Government is, of course, about choices and it is about priorities. This bill actually makes that pretty clear. The Prime Minister and his Treasurer have chosen to stake Australia's future wellbeing on a $50 billion tax cut. This is the sum total of the much-vaunted economic plan they trumpeted last year. It is all they have to say. So much for the sophisticated economic narrative that the now Prime Minister promised in the course of his job audition, when he took the leadership from the member for Warringah. This is the sum total of the plan, but it is also telling that they have taken their time to say it, given that it is not exactly complicated stuff. We are well into March now, 10 months after the budget which announced these measures with such fanfare, and this bill continues to meander its way through this place. It was introduced into the House last September, roundabout when the Prime Minister was still of the view that section 18C of the Racial Discrimination Act should not be changed, in part because it would not create any jobs. I wonder how many jobs the current amendments will create. I think we know the answer to that.

We have seen a government this week—and every week in the life of this parliament—which is deeply ideological and which at the same time lacks the courage of its convictions. We saw that demonstrated far from eloquently yesterday in question time by the Treasurer, who was asked a couple of pretty simple questions by my friend the member for Rankin and also by the shadow Treasurer about the status in the budget of the tax cuts—the centrepiece of the government's economic plan and of this legislation. He could not answer the question—well, he did not answer the question, and I suspect it was because he could not answer the question. He is obviously waiting on instructions. Perhaps he will find out the answer when he is given his speech to read out on budget night. We saw bluster and ranting—a long way from an economic plan, much less a good one. The Treasurer is sound and fury which signifies absolutely nothing. That is the government's plan; that is their commitment to implementing it.

On the other hand, Labor makes different choices and has different priorities. We are concerned to maintain our social compact, and we are for a couple of reasons. The moral basis, the moral reason which brings all of us on this side into parliament, is to ensure that every Australian can have a decent standard of life, that they are supported through the vicissitudes of life and that they are entitled to every opportunity based not on the circumstances through which they begin life but through being part of Australian society. That is the moral case, but there is also an instrumental case, which makes the government's attitude to these issues all the more galling, We now know that excessive inequality, which is the trend that is being experienced in Australia as well as across the developed world, is not only inherently bad in a moral sense or according to how some of us see the world and our obligation to those who are less fortunate than us but also instrumentally bad. Bodies like the IMF have formed a very clear view that excessive inequality such as that we are trending towards in Australia is a very significant brake on economic growth. A government which was serious about maintaining economic growth as the basis for maintaining the living standards of Australians into the future would be concerned about this. This government cannot even bring itself to speak the words, much less attend meaningfully to solving this problem.

Labor does see this as a problem, and we see it as our obligation to respond to it. Over the life of this parliament we have made it absolutely clear that there is an approach open to Australia that is very different from this blind faith in trickle-down economics. There are decisions and interventions government could and should make to improve the position of Australians and improve the position of the Australian economy. A stark contrast to the government's proposal contained in this bill is the approach that Labor took to the last election and continues to prosecute: the changes to negative gearing and the capital gains tax discount in order to improve our revenue but also to improve the distribution of wealth and to restrict the growth of wealth inequality in Australia, at the same time opening up to more young Australian families the prospect of home ownership. This is a critical decision we have taken on a critical issue that is of concern to all of my constituents—and I am pretty sure the constituents of the member for Dunkley as well—but a matter upon which the government has nothing to say. If you listen to the Minister for Urban Infrastructure—and I do not advise that you do that, as a matter of general principle—housing affordability is not something that people should be talking about. He is wrong on this, as in so much else.

It is not just about negative gearing and capital gains tax changes, as important as these are; it is about an entirely different approach to boosting economic growth and making sure that the foundations of that are in equity. In this regard I think of the key difference between our philosophical approaches, which is made evident through the provisions of this bill: $50 billion in tax cuts, or critical investments in productive infrastructure. Government members' contributions to this debate have seen many references to our productivity challenge, but not an answer to some of the big questions that we have to grapple with. Perhaps this is some recognition that it is not so much labour productivity that is the brake on economic growth in Australia but questions about managerial performance and the incentives that drive managerial performance or underperformance, and our failure to have proper investment in infrastructure, with the tearing up of the work of the last Labor government in supporting Infrastructure Australia in turning Australia's infrastructure investment around—fundamental failings.

It is not just hard infrastructure; it is investing in human capital. Yesterday we had parents, teachers and principals attend this parliament to make their case for investment in schools funding based on need. On this side of the House we are confident in the capacity of Australians. We are confident that, if we bring the best out of every Australian child, that will be a critical enabler of our ability to compete in the global marketplace. It is the high road to competitiveness, as opposed to the low road of simply dropping our corporate tax rates. There are other investments that maintain a decent society, which is so important to how we see ourselves, so important to maintaining trust and confidence in the political process here and so fundamentally important to people's lives. These decisions will continue to confront us, perhaps later today when the minister at the table, the member for Pearce, resumes our debate over changes to early learning and child care, and at some stage shortly thereafter, no doubt, further attacks on family payments as well as the pension.

As we speak, we on this side of House are very conscious that the wage share of the economy is falling. Income growth, wages growth, is at its lowest level on record, so it strikes me that one of the many canards put in support of this $50 billion giveaway is the suggestion that benefits will trickle down to workers through higher wages. This, of course, is complete nonsense. There is no evidence to support this. In fact, the evidence runs completely in the opposite direction—that the benefits will go not to workers but of course to shareholders, many of them overseas. Who wins? Not Australian workers but big business.

Extraordinarily, we have before us a plan to boost the deficit and increase inequality. It is quite a remarkable thing, isn't it, especially in circumstances where the evidence is in that excessive inequality is a handbrake on growth? The position of government members here is a homage to the position of the Treasurer: it is all rhetoric and no substance. We see in contributions to this debate the most lukewarm reheating of trickle-down economics, which failed the United States and would drag Australia backwards.

Jobs and growth were once the watchwords of this government. This is a bill that will do nothing for jobs and almost nothing for growth. The Treasury modelling, which appears from the available evidence to be generous, suggests one per cent growth in 20 years. It is pretty thin stuff, as are the arguments about competitiveness. Of course, company tax rates are an element of international competitiveness, but just one. There are many others. I touched earlier upon the high road that we could go down, which is a surer path to international competitiveness in the medium and the long term: investing in skills, maintaining all the reasons that make Australia an attractive place for businesses and people to settle as well as invest; and, of course, meeting the infrastructure challenges that are so critical but have been sadly neglected by this government.

They have been neglected by this government not in isolation but consistent with a wider series of attacks. This is a government ultimately with no direction. It relies on a series of ideological standbys, sometimes in the area of economic policy but increasingly away from that. This is a government that seems to be led by reactionaries on the backbench and reactionaries on the crossbench. It has an agenda that says nothing about Australia's future and everything about internal preoccupations. It seems that in this place we get to witness what it must be like to be in the coalition party room as these debates, these culture wars, play out in our parliament. It is not edifying and it is not good enough. What Australians need is a government that is prepared to make serious decisions about boosting productivity and about attacking inequality, not reinforcing it. That is the challenge that faces Australians. It is the challenge that we on this side of the House are firmly committed to overcoming. That is why I support the amendments proposed by the member for McMahon.

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

I rise to speak in favour of the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016. I think this debate is highlighting some core values and, dare I say it, some disappointing changes that have really had bipartisan agreement and support in this country for about the last 30 years. For the last 30 years in this country, starting, dare I say it, with the Hawke-Keating Labor government, there has been a belief that we have had to open up our economy to overseas competition and trading, and we have had to remain competitive with tax rates with other countries, because, increasingly, over the last 20 or 30 years the world has become increasingly globalised with interconnected trade and companies much more agile, with digital technology and improved transport, and opportunities for getting goods and services around the world happening very quickly. That means you cannot take your bat and ball and go home and play the game by yourself. You have to play the economic game, the commerce game, which we are involved in as a trading nation, with everyone else. Really, there has been bipartisan support for the last 20 or 30 years, starting with Hawke and Keating. Things like tariffs have been lowered, and they started that.

The first governments that started to really drop—not drop, but slash—company tax rates, and not just small company tax rates but big business tax rates as well, were the Hawke and Keating governments. That was continued by the Howard government in the Howard-Costello years. Through that period the coalition government also lowered our company tax rates, because we knew that we needed to remain competitive as many companies have a choice, not only where they establish themselves and where they have their tax domicile but also where they might open up and expand the goods and services they trade in and offer. This is a worldwide phenomenon. This is not a debate that is unique to Australia. I want to quote some figures that might be worth understanding and digesting, especially for those on the other side of politics. Back in the Howard days we had one of the most competitive and lowest corporate tax rates in the world. We are now the sixth highest in the OECD. We are currently just below 30 per cent, but the United Kingdom has a tax rate of 20 per cent; Canada, 26½ per cent; China, 25 per cent; Korea, 24½ per cent; the EU average is 22 per cent; the OECD average is 24 per cent; and the global average is 23 per cent. Our current tax rate is five per cent higher than the global average.

Obviously, we need to and want to remain competitive. The current term that everyone likes using—not just in economics or politics but in business enterprises, in health and in education—is 'evidence based'. What is the evidence?

Rather than just listening to, dare I say it, people on both sides, what has the evidence of lowering company taxes been? What has happened to the corporate tax rate of a country when the country or the government has lowered corporate or company taxes? There is very simplistic, jingoistic and obstructionist Labor opposition to this—it is very easy to take a jingoistic line on something. Intuitively, you might think, as Labor are saying, 'You're going to cut company tax rate so, therefore, we're going to receive less tax.' Well, that is not what the evidence suggests and that is not what this is about; this is about allowing for and creating the environment and the goalposts so that private enterprise can flourish and grow. When private enterprise is flourishing and growing, guess what? They make more money, they employ more people and the tax that you collect increases. If we started putting company tax rates up, we would not collect more tax; because you are going to shrink the size of the pool, you are actually going to collect less. When you lower company tax rates, even though, intuitively, you might think you are going to go to collect less, you are actually going to collect more, because that side of the economy is going to grow and flourish.

I am not just making this up; I am actually talking about evidence here. Let me give you an example. I go back to the Hawke-Keating days. The other side of politics will laud them as wonderful people, ex-prime ministers. This is what they did: they lowered the company tax rate by 10 percentage points. They lowered the company tax rate, for big business and for small business, by 10 percentage points. What happened? In 1987-88, they collected $8.6 billion in company tax receipts. They lowered the tax rate by 10 per cent, and what had happened by 1989-90? It had gone to $12.7 billion. We were actually collecting more tax at the lower rate than we were at the higher rate. Let me give you another example. Again, this is about evidence-based decision making. In 1999-2000, the Howard-Costello government also cut the tax rate from 36 to 30 per cent. This is another quite big adjustment—a six percentage point drop in the company tax rate. What happened then, Deputy Speaker? I know you are asking; I know you cannot wait for me to tell you. I will tell you what happened: they collected $26 billion in 1999-2000, they lowered the company tax rate by six percentage points and the tax collected went up to $35 billion.

Again, this is not about this very simplistic, jingoistic idea that tax cuts to big business is giving them money at the expense of everything else; it is exactly the opposite. We want to maintain a competitive tax rate, because then we can do what we obviously want to do. We always have to remember that every single cent that we spend on any government program, whether it be education, health, infrastructure or any other thing that we think is a good way to invest taxpayer dollars, comes from the private sector. It comes from the people who, through their own sheer hard work, their own initiative and their own idea of working in the private sector, are adding value to a good or a service. Obviously we tax that good or service from the private sector, and that enables us to pay every public servant we employ throughout this country. As I said at the start, we are actually discussing and having a debate in this place that we have not had for 30 years, because for 30 years there has been agreement on both sides of politics that if we free up the private sector, if we lower the company tax rate, the result is going be a healthier, more productive private sector and, from the figures that I have just given you, we are going be collecting more money at the lower rate than at the higher rate.

In fact, there is a very famous example from a few decades ago: Ireland. In the 80s, Ireland was broke and they had a company tax rate approaching something like 60 per cent. If you are broke and you are thinking like the Labor Party, you would say, 'I'll put the tax rate up to collect more money.' But they realised that they needed to attract more business, more initiative and more companies to operate in their country. Do you know what they did? They slashed the rate to close to 10 per cent. Do you know what they were doing within three years? They were collecting more money at a rate close to 10 than they were at 60. Again, this is evidence-based stuff that proves that, if you set the agenda, if you set the theme for the private sector to flourish, it will. In Ireland's case, what happened back in the eighties was that—operating, obviously, as close to Europe as they do—the whole Europe IT sector, as it was starting to get established and starting to grow and get critical mass, moved to Ireland and set up their businesses in Ireland. So Ireland had a whole new sector, and the other sectors and service industries associated with that, and that meant that they were collecting a lot more money. And, of course, what else did they have? They had more money as a government to put into the issues that we as a government are talking about.

This very simplistic almost dumb-it-down idea that tax cuts for business come at the expense of social infrastructure is a fallacy. It is going back to a debate that we have not had in this country for 30 years. The next time the Labor Party want to mention Hawke or Keating and the great things that they did for our country, these ex-leaders that they laud, they can remind themselves that they were the first government to start slashing company tax rates. They got it, and the Howard-Costello government after them got it and gave us one of the most competitive tax rates in the world. We had a private sector that was doing quite well, and the government was collecting more money at that lower rate than it was previously.

I think it is very important that when we are making this decision we are very conscious of these facts. We live in a global world. Whether we like it or not, we are competing with many other countries around the world. Countries compete with us in agricultural production—the things we have advantages in—in the manufacturing sector and in a whole array of areas. Countries compete with us in education, with foreign students deciding where to go to study. Tourism is a good industry for us, but we compete with other tourism destinations as well. We compete in everything. There is nothing that people cannot do or get without having a choice other than Australia.

The figures that I started my speech with, which I am about to repeat, are very salient. In the early 2000s Australia had one of the lowest corporate tax rates in the world. That was as a result not just of the Howard-Costello government but also of the Hawke-Keating government, because they got that we needed to be competitive. Australia's corporate tax rate is currently just below 30 per cent. I want to compare that to the rate in 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 per cent, the OECD average is 24 per cent and the global average is 23 per cent.

We as a government want our economy to grow so that we generate more revenue to provide essential services. We know from empirical evidence over the last 30 years that if you want to increase your tax rate you have to be competitive. You have to set an environment whereby businesses will come here and provide goods and services at a competitive tax rate; otherwise, they will not come. Counterintuitively, if you believe the Labor Party, you would just start putting tax rates up to collect more money. They are not saying that, because they know—from the empirical evidence I have just cited—that we would end up lowering the amount of tax collected, because companies would literally shut down, move elsewhere or not operate. So, as simplistic as their argument is in this discussion, I think the Hawke-Keating Labor government—the previous leaders and treasurers—have said that what they did was right in lowering company tax rates. I think Paul Keating would certainly believe that what he did was right in lowering tax rates for big business and small business to make us a more competitive country, as did the Howard-Costello government.

We are introducing a measure to maintain our competitiveness. We are not aiming to go below the OECD average or the world average tax rate. We just want to maintain a competitive rate so that our businesses can compete and flourish in today's environment.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to voice my deep concern with the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016—the Turnbull government's $50 billion ramraid on the federal budget for big business. When Mr Turnbull undertook his infamous 2015 coup, he told us that he would be different. He told us that he would deliver the strong economic leadership that had been so lacking under the member for Warringah. He told us that he would run a constructive parliament driven by the national interest. Since then, Australians have watched in dismay as the Turnbull government has devolved into chaos, unable to maintain a single idea for economic reform for more than a few days, let alone last the distance to legislate for it.

And no amount of government spin and bluster can counter the fiscal reality facing our country.

The 2016-17 Mid-Year Economic and Fiscal Outlook is sobering reading indeed. It shows deficits blowing out by another $10 billion over the forward estimates since the budget. It reveals that the deficit for this financial year has more than tripled since the government's first budget. And it exposes the fact that net debt has blown out by $100 billion since this government came to power. That is more than $4,000 for every single Australian. The myth that the Liberals are effective economic managers has been thoroughly quashed. They have trashed the budget, hiked the deficit and threatened the AAA credit rating that the former Labor government secured from all three major ratings agencies for the first time in our nation's history.

The second solemn promise Mr Turnbull made to the Australian people after his coup was that fairness would be at the centre of all of his government's decisions. Mr Turnbull said fairness would be 'absolutely critical'. Again, the Prime Minister has colossally failed to deliver. He has attacked jobseekers, pensioners and low-income families while giving millionaires a $17,000 tax cut. He has consistently asked low- and middle-income Australians to do the heavy lifting on budget repair while fighting to maintain tax subsidies for the big end of town. And he has belligerently refused to rein in excessive tax deductions for property investors, who are driving up house prices and stretching family budgets to breaking point.

It is no coincidence that Australian households overtook the Swiss to become the world's most indebted last year. To add insult to injury, the government's attacks on workplace conditions and its relentless attempts to shackle unions have contributed to stagnating living standards and record low wage growth. Even the Treasurer has admitted that this stagnancy in wages is one of the greatest threats to our economy. But that has not stopped this Prime Minister from backing in further wage cuts to some of the lowest paid workers in the country. The fact that the government is happy to stand by while 700,000 working Australians lose up to $77 a week due to those cuts to Sunday penalty rates is astonishing. Clearly, Mr Turnbull has been unwilling or unable to do the things ordinary Australians so desperately need. Still, Mr Turnbull has no credible plan for economic reform or, at least, no plan that he is able to get past the extreme right-wing masters in his party room.

In fact, the only idea that Mr Turnbull has had approved by the conservative cabal that runs the Liberal Party is a $50 billion handout for big business and the banks—the very plan that we are discussing here today. Make no mistake, this $50 billion corporate cash splash is an egregious waste of precious taxpayers' dollars that will deepen the debt, smash the budget and necessitate crippling cuts to vital public services. This is a gift to big business, but a rank betrayal of the Australian people.

It is particularly galling when you consider that the significant number of the largest companies operating in Australia have already found ways to reduce their tax bills to zero. In fact, the most recent ATO data revealed that 670 of the largest companies paid no tax—I repeat, no tax—at all in the 2014 financial year. That is more than one-third of all large public and private companies in Australia. This is shocking. Working Australians have every right to ask why they are being forced to pay the full rate of tax when the government is doing nothing to close the loophole that is available to companies.

It has been estimated that the Australian budget is losing $4 billion a year—possibly more—to multinational tax avoidance. A sensible government would be doing all it can to ensure that these companies are paying their fair share of tax, but this government is not—and far from it. Rather than calling big business to account, Mr Turnbull wants to give them a $50 billion reward. Those opposite have ruthlessly gone after jobseekers for debts they do not owe and threatened families with cuts they cannot afford. But when it comes to the billions of dollars in foregone revenue from tax avoidance, the government suddenly becomes spineless. We have seen too many times that we have a government that is soft on tax avoiders but tough on vulnerable Australians.

Those opposite have been trying to prosecute the preposterous argument that handing over $50 billion to big business is somehow a good thing for ordinary Australians. They have argued that it will be a massive boost to growth, creating a bounty of jobs and boosting everybody's pay packet. That is what the government purports. In fact, the outrageous hyperbole that we have heard from the conservatives about the miraculous impact of this corporate tax cut has been so far-fetched that it is a wonder the government is not trying to claim that it will also fix climate change!

Their own modelling shows the extent of their extreme exaggeration, showing that this growth and wasteful largess will only deliver a miniscule one per cent to growth. That is not next year or the year after. It is not even going to be in 2020. In fact, this tiny payoff will not be seen for 20 years. Even if Mr Turnbull manages to get the legislation through the parliament in full, which, frankly, it looks unlikely to do so, in the process it will cost close to $4 billion in extra interest payments on the debt in addition to the $50 billion that will be ripped from the federal budget. So those opposite are happy to threaten our AAA credit rating and plunge our country into even further debt on the hope of a one per cent boost in a generation's time. So let's be clear: on an annual basis, this is little more than a rounding up error.

The same Treasury modelling also reveals that these big business tax cuts will have a remarkably small impact on pay packets, given the brutal toll it will take on the federal budget. In fact, it shows that the boost to wages will be a disappointing 1.1 per cent. Again, this is not for next year or even in 10 years' time. No; workers will be waiting 20 years to get an extra $2 a day in their pay packets.

Conservatives and the business lobby have also suggested that a jobs bonanza will follow these tax cuts. To suggest that job creation is a direct and necessary outcome of cutting taxes is disingenuous at best and a wilful misrepresentation of corporate reality at worst. It is no secret that companies' primary loyalty must always be to their shareholders, not to Australian jobseekers. The pressure to increase dividends year on year is relentless. The more profit companies make, the more they can direct to their shareholders. And the more they reduce their cost bases by cutting labour costs or jobs, the more profit they make.

If there was a direct causal link between profits and job creation, it would follow that when companies record large profits a workforce boost would follow soon after. Let's take the banks, for example. They have benefitted from record high profits in recent years. So, according to the government's logic, we would have seen a parallel hiring frenzy. But this simply has not happened. Instead, despite record profits, banks have embarked on cost-cutting and restructuring exercises that have seen thousands of jobs culled. In the first-half period of the last financial year, Westpac, CBA and ANZ shed a combined 2,547 full-time jobs. Clearly, that makes a mockery of this government's argument. Of course, I would not deny that there will, indeed, be winners from this legislation; they just will not be the Australian people. The banks, foreign shareholders and, of course, big business will have reason to celebrate if this bill gets through parliament. The big four banks alone will get a $5.7 billion windfall. That is $5.7 billion of precious federal taxpayers' money handed over to the companies that have been racking up record profits on the back of a string of scandals and high-profile consumer rip-offs.

On this important issue, there could not be a clearer difference between Labor and the coalition. Labor thinks the banks need a royal commission. Mr Turnbull thinks they should get a tax cut, and he has been running interference for them for nearly a year now to protect them from any scrutiny. Even members of Mr Turnbull's own government have seen that this legislation is a slap in the face to the thousands of innocent Australians who have lost millions to the unconscionable conduct of the banks. Indeed, we saw reports recently that some have been putting pressure on the Prime Minister to carve the banks out from this multibillion-dollar windfall. While the banks would have breathed a sigh of relief when the Prime Minister came out swinging against this proposal from his backbench, ordinary Australians should be very concerned about where this Prime Minister's loyalties lie.

The government wants you to believe that Australia will become uncompetitive and that investors will flee if we do not proceed with these tax cuts. If this were actually the case, then you would expect to see a clear pattern of companies from countries with a higher tax rate avoiding their home territories and choosing Australia as a destination for investment. Conversely, you would also expect that companies from countries with a lower tax rate investing here in Australia would be few and far between. The data shows us, however, that nothing could be further from the truth.

A recent analysis by the Australia Institute found that a full 97 per cent of investment applications to Australia's Foreign Investment Review Board came from countries with lower company tax rates. By value, 71 per cent of applications came from countries with lower rates. Not only that, but when our tax rates rose to 49 per cent in the 1980s we saw investment grow, not decline. The Foreign Investment Review Board data demonstrates that there are many factors that drive investment. Tax is just one.

So if we are clearly attracting investment despite having higher tax rates—and the link between tax rates and investment levels is tenuous at best—why on earth would we embark on a revenue-slashing race to the bottom? If we do start to play the 'How low can you go?' game, where does it end? When a 25 per cent rate fundamentally fails to boost growth, do we drop it to 20 per cent, or 15 per cent? How about five per cent? Or do we forgo tax revenue entirely? There are many things aside from the tax rate that attract investors. A skilled workforce, a stable regulatory system and a low-risk business environment are just a few.

This government is throwing precious public money out the window, in our view, and it is doing so at the expense of many ordinary Australians. Students will be paying for this. Families will be paying for this. Cities will forgo vital infrastructure. Young jobseekers will be paying for these cuts. Of course, every single Australian will pay for it because of this government's ongoing attacks on Medicare, bulk-billing, the Pharmaceutical Benefits Scheme and hospitals. Make no mistake: if this government gets its way and this bill passes parliament, generations of Australians will pay the price.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

'Friends, corporate tax reform helps Australia's private sector grow and it creates jobs right up and down the income ladder.' Who said that, Member for Newcastle? That was Bill Shorten, the Leader of the Opposition, at the ACOSS National Conference at the Melbourne convention centre on 30 March 2011. Let me say that again: 'Friends, corporate tax reform helps Australia's private sector grow and it creates jobs right up and down the income ladder,' said the Leader of the Opposition.

If that is not enough for you, you might want to listen to what the member for Lilley said. He might recall telling the ABC in 2012:

We intend to fight tooth and nail to get this general company tax cut through which flows first of all to small businesses and then to all companies … We want a general company tax cut.

That is what Swannie said. Well, come on, tiger—get onboard! What are you doing? He said, 'We intend to fight tooth and nail for it,' and now he is running around the country and around his electorate of Lilley talking about trickle-down economics, if he is not over in the UN for three months. The hypocrisy of those opposite on this issue is astounding. And what do we hear from the member for Hotham and others opposite? Absolutely nothing on this issue.

If that is not enough for you, the former Labor Prime Minister Julia Gillard said upon her 2010 election campaign launch:

… we will cut taxes for all businesses in this country.

Like her, I also 'stand for tax cuts, tax benefits, tax relief for every Australian business', because I know that supporting business supports jobs. Most people in this country are employed in the private sector. Party politics and differences aside, we all agree, because we know that tax relief for business makes good economic sense.

The difference between this government and the Labor Party opposite is that we are not scared to make the tough decisions. Unlike the Labor Party, we are not scared to stand up for what is in the best interests of the nation. We are certainly not scared to stand alongside business. In fact, when we went to the last election we promised to do just that, because we know that for the students up there in the gallery, who are just heading out now, the company tax cuts will create many jobs around the country, if we support business. As we heard from the Leader of the Opposition, the member for Lilley and the former Labor Prime Minister, at one stage they agreed. Now the Labor Party is playing bitter party politics in relation to this issue. That is what we are getting from those opposite.

At the last election, the coalition was the only party with a strong plan for jobs. There was no plan from the Labor Party, I would say. We are taking a multipronged approach to job creation which will help Australian businesses, workers, families and young people. Those babies who are being born today will benefit from our plan in 20 years from now. This plan includes our free trade agreements. With a population of 24 million people here in Australia, we know that it is a great advantage if we can export and sell our products into markets with billions of people. Whether that is China, India or Indonesia—wherever it is—we know that our free trade agreements will help future Australians.

In the last 12 months alone, we have seen agriculture exports increase from $46 billion to $60 billion—so $46 billion in sales to $60 billion in sales. I suspect a lot of that has to do with FTAs. In my electorate, whilst they do not have much agriculture, people are interested in agriculture. They want to see our Australian farmers do well, and this is an important point that I make here. We have, also, a strong plan for our defence manufacturing sector. We know that manufacturing in the defence sector will provide jobs right around the country and not just in South Australia and Perth where close to 60 new ships will be built over the next two decades—welded up using Australian steel. It will help create jobs in my electorate and other electorates around the country for other items that go in that equipment. This is an important point.

At the time of the last election, we made no secret of the fact that company tax cuts were a significant part of our plan. We wanted company tax cuts in companies up to a billion dollars. Unfortunately, despite my opening lines in relation to those Labor leaders of the past, they are not budging at all on this. The Nick Xenophon Team on the crossbench is giving one per cent of what we are after. That is not a negotiation. That is us getting done over. That is the Australian people getting done over. We have a plan for a billion dollars worth of tax cuts, and crossbenchers want to deliver on $10 million. That is not a plan.

The Labor Party is even more guilty. They are delivering nothing—absolutely nothing—despite what the Leader of the Opposition said just a short time ago. The member for Melbourne's comments in his address on this issue were absolutely disgraceful when it came to the way he spoke about companies that employ people right around this nation. In relation to the member for Newcastle, who just spoke, I have never heard so much rot in my entire life in relation to this bill. What she was saying there was absolute rot. It just goes to show the fearmongering that those opposite rely on to win their seats in parliament, because what she was saying is totally incorrect.

I know that company tax cuts will help medium-sized businesses in particular in my electorate—those businesses that turnover up to $50 million, $100 million or $250 million. I have a business in my electorate that turns over less than $50 million. They turnover about $40 million. They are a bull bar company that sell Australian made bull bars for the front of your Toyota HiLuxes and things that are imported. For those people in the gallery, they employ 140 people in my electorate. If jobs are increased by 10 per cent, that is another 14 local jobs.

But, listen, for those in the gallery who are listening to those opposite from the Labor Party: do not hold your breath. They will never talk about medium-sized businesses with up to $50 million turnover or companies with up to $100 million turnover. All they talk about is big business and multinational tax avoidance. Yet they all voted—every single one of them in this place, apart from the new members—against the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill in December 2015. That is an important point. All they talk about is the big four banks, yet we did hear the member for Newcastle say that the company tax reductions would only benefit banks to the tune of 10 per cent. They never talk about the other 90 per cent. This is an important point.

I would like, if you will allow me, to play a little game. I will read you a list, and I would like you to consider what the common thread might be here. Angola, Costa Rica, El Salvador, Honduras, Kenya, Malawi, Mexico, Nigeria, the Philippines, Sierra Leone, Tanzania and Uganda—what ties these countries together? How did you go? Perhaps the Minister for Health might know.

Greg Hunt (Flinders, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

Lower tax rates?

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

Almost. The fact is they all have the same company tax rate, and it is the same as ours. But if you look at all other countries, what the United States are doing with their company tax rate is talking about lowering it to 15 per cent. Britain has lowered it down to 20 per cent. The United Kingdom has a 20 per cent company tax rate and are soon lowering it to 17 per cent to be in line with Singapore.

We know what those opposite think, but do you people in the gallery really think a business is going to base themselves in Australia and pay 30 per cent company tax when the US is about to drop it to 15 per cent, the United Kingdom is about to drop it to 17 per cent and Singapore has it at 17 per cent? They talk about jobs, but we are going to see jobs go out the door and continue to go out the door if they do not just do what the opposition leader said not long ago.

Let me remind you again, for those in the gallery. I do not know if you were all here. This is Bill Shorten—

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I remind the member for Petrie to use the correct titles.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

Through you, Chair, the opposition leader said:

Friends, corporate tax reform helps Australia's private sector grow—

That is what the Leader of the Opposition said—

and it creates jobs right up and down the income ladder.

That was the Leader of the Opposition not too long ago, and now, in this place after the election, they come in here, play politics and vote against everything the government wants to do to help Australians right throughout the country. As I said before, we are the only party with a plan. We are the only party with a plan for jobs. Those opposite have absolutely no plan at all.

We need a more competitive tax rate to attract foreign investment so that domestic households will not need to sacrifice current consumption to fund the investment. Reducing Australia's corporate tax rate would increase Australia's appeal as a place to do business. It would encourage higher levels of investment in Australia and lead to capital deepening, promoting growth in productivity, innovation, employment and wages. It is a point not lost on the Governor of the Reserve Bank of Australia, Philip Lowe, who has emphasised the 'need to make sure that our tax system is internationally competitive'. We need to be internationally competitive in the global economy. He is not alone. In the United States, President Trump has pledged to slash company tax to 15 percent.

I know that Qantas has just opened up a new maintenance facility in the United States, employing people to maintain planes. At the same time, people in my electorate who were working for Qantas in Brisbane have had their hours reduced. That is what has happened. I think that if we are stuck on a high company tax rate for decades into the future because of the Labor Party opposite we are going to see more jobs go to countries where they have a lower company tax rate and lower wages.

The estimates in the US are that a one percent cut in local business taxes will increase the number of local establishments by three to four percent over a 10-year period. The United Kingdom predicts that reducing the company tax rate to 20 per cent—and they are going further—would result in a permanent increase in investment of up to 4.5 percent over a 20-year period. So we are not alone in our push to reduce the burden on business.

The government's enterprise tax plan is a clear and defined road map. It is a solid and well-drafted plan that harnesses maximum opportunity for growth and shared prosperity. A five percentage point reduction in business tax will deliver a permanent boost to the Australian economy. The benefits to workers and the economy of lower tax will begin to flow immediately. Importantly, it will help 1.8 million Australians looking for extra work to boost their take home pay. It will give them more hours and assist with affordable living. If we do not cut company tax rates, we stand to stifle progress and to derail hope, confidence and achievement.

I love representing the people of Petrie. I take it very seriously. I come to this place because I want to see an improvement in the lives of all Australians. Whilst I am a politician, it is not in my nature, I must say, to play politics with a lot of these things. I want to actually get things done that help people. One of the most frustrating things about being in parliament is listening to those opposite—and sometimes maybe even those on our inside—play politics with issues that do not help the Australian people. I call on the crossbench and the Labor Party to get on board with what the leader of the Labor Party spoke about just a few years ago and support these company tax cuts, because I know that it will make a real difference not just in my electorate but right throughout the country. If these tax cuts do not pass through the Senate then it will not be me who is standing in the way; it will be those opposite, and they will have to answer to future generations. (Time expired)

Justine Elliot (Richmond, Australian Labor Party) Share this | Link to this | Hansard source

I, too, rise to speak on the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 which relates to the government's budget measures to reduce company tax. Talk about living in a parallel universe! I was listening to the member for Petrie as he was spruiking all the government's lines about this bill. But if you turn to some of the media speculation today, it looks like they are about to shelve most of it. It is quite interesting. I think it is quite symptomatic of the absolute chaos and mismanagement of this government. It is interesting, if you look at one of those reports in The Australian, to see that it says 'Company tax reform shelved in bid to save small firms' cut'. It says the Turnbull government are preparing to shelve most of the $50 billion company tax cut. The AFR article today says, 'Doubt grows over future of company tax cuts.' Yesterday, the Prime Minister and Treasurer were asked about that. Of course, they refused to give any clear statement. So we really can see that the government are in absolute chaos and that maybe they are about to abandon their great plan for jobs and growth. It certainly does reflect the chaos and mismanagement that we see from them.

The measures of the government in this bill are ones that we disagree with. We disagree with them because we know it is a matter of priorities. Our priorities are different to their priority—a $50 billion tax cut for multinationals and big business. Let's also look at the context of this bill and how long it has taken to get to this point. Months and months after the last budget was delivered, this, the absolute centrepiece of it—the so-called great economic plan—is finally before us. It has taken months and months to get here. The government have dragged their feet for a very long time, and who knows what will happen now with all this speculation that we are seeing. Make no mistake: this is an economic plan in which the Treasurer's response to the deficit is to actually increase the deficit by $50 billion over the next 10 years. That is his big answer to reduce the budget deficit—make it bigger. That is it. It really, again, highlights the government's economic mismanagement and their very chaotic state.

As I said, budgets are all about choices. On this side of the House we make very different choices to those opposite. We make choices that are based on assisting all Australians, not just the very wealthy, corporates and multinationals. We choose budget repair which is fair—for example, through reforms such as our negative gearing and capital gains tax reforms. We took those to the last election and there was a very positive response. I know in my area there was certainly a very positive response to those proposed reforms. Our priorities are based on better and fairer funding for our schools, hospitals and families. We make the choice to not to give away a $50 billion tax cut to multinationals and big business, because it is essentially unfair. We also, very importantly, prioritise and choose to ensure there is proper funding for rural and regional Australia such as my area on the north coast of New South Wales. It is only Labor that support and stand by those country areas and deliver for them.

As I said, this bill gives effect to a series of budget measures. It has taken months and months to get here. You would not believe, would you, that an economic plan could take so long to actually reach the House?

We are not opposed to sensible tax incentives for business, but what we are opposed to are cruel cuts to the most vulnerable in our community whilst the government are out there spruiking its $50 billion of tax cuts for multinationals. The government continue to pursue this at the expense of those who can least afford it. That is why we are opposed to this bill and, of course, why I support the amendments put forward by the shadow Treasurer. The bill sees the government giving that $50 billion in tax cuts to the big end of town whilst, at the same time, slashing funding to the most vulnerable individuals and organisations in our community.

Out of this $50 billion tax cut, this government are going to hand over a $7.4 billion gift to the big banks—the same banks that the government refuses to hold a royal commission into, despite the very widespread community concern about the need for a royal commission. I will continue to advocate for that. Many locals constantly approach me about the need to have a royal commission into the banks, and we will continue to raise it in the parliament and the community. Those on the other side continue to block it.

At the same time that they have this tax cut underway, we are seeing their massive cuts to family tax benefits and pensions. We are also seeing this government continuously slash funding for education. I also note a recent statement by Goldman Sachs, who said that around $30 billion of the government's $50 billion corporate tax giveaway will actually go overseas. That is 60 per cent of the funds that could be invested into Australian jobs, health and education. That is truly shameful. That is $30 billion that this government would rather see go offshore. There will be few, if any, tangible benefits to Australian families but lots of big benefits to the multinationals and big business. The fact is, this corporate tax rate is not going to generate the jobs that any of them claim—at all. It just will not happen.

As I said at the beginning, the government are completely devoid of an economic plan or a jobs plan. There is just chaos and mismanagement throughout the government. I would like to point out some of the areas that they should be prioritising and funding—areas that are very important in my electorate and, indeed, throughout the country.

They should be investing in Medicare but, of course, they are not. It provides a very stark comparison of our side of the House with theirs when I look at their priorities and how they are really hurting many Australians. We have always been committed to properly funding Medicare. We understand how important universal health care is and we believe that your health care should be determined by your Medicare card and not your credit card. We made it clear before the election that we are committed to lifting the government's very cruel freeze on the indexation of the Medicare Benefits Schedule. Let's just take a step back and remember what this government did. They tried three times to introduce that GP tax. They were very keen to do that. They could not do it, so they imposed a GP tax by stealth, by freezing the indexation on those rebates. They are still very much committed to that. Remember, in the Prime Minister's first budget, how much they ripped out of Medicare by extending the freeze even more. The reality is that this makes going to the doctor unaffordable for so many Australians. Labor understands that, and that is why we are committed to changing it, because that is what drives our health policy—we created Medicare and we will always fight to protect it. The government should be investing in Medicare and not investing in the $50 billion in tax cuts.

Another area where they have been particularly harsh with their cuts has been those welfare cuts. We have seen the cuts to family tax benefits and paid parental leave, with a lot of families worse off. We have seen other cuts—such as the cut to the energy supplement to pensioners, people with a disability, carers and Newstart recipients—across the board, to those most vulnerable. We even saw that late-night deal last night in the Senate with some of their cuts. How shameful was that, when they are cutting $1.4 billion from Australian families? Of course, this latest cut is straight from the horror 2014 budget, in which we saw a freeze on the family tax benefit payment rate for two years. How harsh is that going to be for families across the country? These cuts will affect every single recipient of family tax benefit, leaving 1.5 million Australian families worse off. It is truly shameful. We saw the Liberals—and let's not forget our old friends the Nationals, of course, who were right there—voting for it. That is what the Nationals do. I have said it many times and I will repeat it again: National Party choices hurt. They hurt people in the country when they choose to do things like this, when they choose to vote to cut family payments. They have certainly done it again and they should be very ashamed of what they have done to cut the family payments to 1.5 million Australian families.

We have seen that this government does not have a plan to help families either, except for cutting all of those benefits. It is certainly right across the board. It is only Labor that has been standing up for Australian families, to try and protect them from these very harsh cuts. We will continue to do that, because we understand how important these family tax benefits are in providing for families. Obviously, the government do not understand it at all. Instead, they are just committed to making sure that they have that huge $50 billion tax cut for big business.

Education is another very important area, and we have seen some massive cuts from this government. In fact, nationwide, they are cutting $30 billion from our schools. That is like sacking one in seven teachers. If we look at my electorate of Richmond on the New South Wales North Coast, our schools will lose more than $20 million. That is absolutely devastating. It means fewer teachers, less one-on-one attention and students simply being left behind. When we look at some of the education outcomes for those in regional and rural Australia, we already have a lot of challenges, particularly in accessing higher education. With the cuts to schools that we have and the government's plans for $100,000 university degrees and cutting funding to universities, it makes it extra hard for our children from those regional and rural areas to actually get the education that they do deserve. Those cuts to schools that I mentioned mean that students are getting less help with the basics. This is where it is truly annoying: this government cannot find money to fund a very needy regional school but, again, they have that $50 billion tax cut for big business. It really shows how twisted their priorities are.

On this side, we believe getting a good education is vital for accessing all of the opportunities throughout your life. We also believe it is absolutely critical to ensuring that we have a strong economy and secure jobs by making sure we have fully funded, needs-based education systems. That is why we are absolutely committed to the Gonski reforms. We understand it is important that we have funding so that every child in every school gets the support that they need. On top of those cuts to schools funding and plans for $100,000 university degrees, we have also seen them decimate the TAFE sector with their cuts to apprenticeships and training.

Another area that I would like to focus on, in terms of the government's twisted priorities, is their cuts to community legal centres and what that means for my community and my electorate. Again, they can give that massive cut to big business, but the cuts to community legal centres across the country mean that the Northern Rivers legal centre in my area will have funding cuts of nearly $180,000.

Some might say that is not a lot of money, but I can tell you the impact of these cuts will be very harsh on the Northern Rivers legal centre. What it means is that from 1 July their Tweed office and its outreach service at Pottsville and Murwillumbah will be forced to close—that is, essentially three offices that will be closed because of this government's harsh funding cuts. The Northern Rivers legal centre and its dedicated staff have been helping our local community since 1996. Now their funding will be cut by 23 per cent so it will seriously jeopardise their ability to actually operate and to provide those services. They provide free advice and services to individuals and groups in financial hardship and, indeed, to some of the most disadvantaged in our community.

The community legal centres across the country help hundreds of thousands of people in need of free legal assistance. They are in the front line sometimes in assistance for those who are fleeing domestic violence or for people with tenancy disputes or employment issues. There is a whole array of financial issues they assist people with. I know that in my community the centre has been utilised right across the board.

I would like to take the time to thank the shadow Attorney-General for recently visiting my electorate, meeting with the representatives of the Northern Rivers legal centre and hearing firsthand what those cuts are going to mean for our community. I asked the people in the Northern Rivers legal centre, 'What happens now when you have to shut these outreach offices? They said, 'These people will just not get help.' One of the lawyers said they were mediating a family law court dispute. What happens to those people? How do they get access to any financial assistance?

I will continue to call on the Turnbull Liberal-National government to reverse these cruel cuts as a matter of urgency. Throughout the country, these cuts are devastating but, in the regional areas, we just have no capacity to get access to those legal services at all. I sometimes think those on the other side do not understand how vulnerable and disadvantaged people are or how really severely impacted by these cuts they will be, so I will continue to call for that funding to be restored.

I want to touch on another example of this government's twisted priorities—that is, the failed roll out of the second-rate NBN. This is really hurting people right across my electorate whether it be their business access, their home access or their educational access. The government used to say their second-rate NBN would only cost about $29.5 billion. It later went to $41 billion. It is now $56 billion. But of course their second-rate copper NBN is a complete failure and, like the government, is in total chaos. We know the NBN is the largest and one of the most important infrastructure projects in this country and it is important that it is done properly. In my electorate, thousands of households are still waiting for the NBN. I have a wonderful creative hub of people who desperately need the NBN to be able to communicate worldwide so they can run their businesses effectively. All small businesses need it. From an educational perspective, people need it. It tends to be in complete chaos because this government are not able to manage anything. Their internal dynamics are so chaotic—

Milton Dick (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

Toxic.

Justine Elliot (Richmond, Australian Labor Party) Share this | Link to this | Hansard source

Toxic indeed, absolutely toxic. That is all that is driving them. We have got massive mismanagement.

In conclusion, budgets are about priorities and this government's priorities are all wrong. As I said, our priorities are based on better funding and fairer funding for schools and hospitals and families, and on proper budget reform of negative gearing and capital gains tax. It is certainly in contrast to the government's only commitment—a $50 billion tax cut to multinationals.

I started out talking about the parallel universe the member for Petrie was talking about because it now looks like the government are in so much chaos they may be shelving some of these reforms. I do not think they even know what they are doing. They could not answer in question time and tell us what was going on. Nobody seems to know what is going on in this show, and the chaos continues. We on this side have many concerns about this bill, as I have raised today.

Milton Dick (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

Is this what it has come to? The centrepiece of the Turnbull government pre-election strategy, the big jobs and growth strategy, and the government have given up. There are no speakers. They have stopped speaking. This was the one single reason we had the election and now you can see the government are flat lining on their centrepiece. We know that when we have asked questions and when the shadow Treasurer has asked pretty straightforward questions such as: will you stand by your one economic plan, a failed economic plan, but a plan so-called nonetheless? They could not answer the question. We know this is unravelling, and I would suggest that is why we are not seeing any more speakers from the government, because they know this is a dud plan. This is a dud economic plan for our nation.

When I return to the electorate of Oxley and consult with the residents on the weekend, I will be reporting to them that not only have the government run out of ideas but their one centrepiece for this week was not about creating jobs, was not about delivering increasing economic productivity. By their own admission, they have given up by not speaking on this legislation, by not investing in our skills base, and by not looking at the infrastructure needs of the growing communities that I represent in the south-west of Brisbane. No, the centrepiece, the one key announcement by this government for this week was about enabling racial hate speech.

As the former member just said, governments are about priorities. And time and time again we see the priorities of this government laid out for the nation to see, priorities which will give $48 billion tax to big business over the next 10 years. At the same time, the government wants to ensure there are cuts to families through changes to family tax benefits, cuts to pensioners through scrapping the energy supplement, cuts to jobseekers by forcing them to wait longer times for Newstart, cuts to young people by forcing them from Newstart onto the youth allowance, and of course cuts to new parents and families by changes to paid parental leave. On top of this, if this so-called strategy was not enough, we are now seeing the government delivering a $77-a-week pay cut to some 700,000 Australians who rely on penalty rates to put food on the table, put books on desks and simply to pay the bills.

This is all about the government's priorities—ensuring there is a tax advantage for large multinational companies but at the same time ensuring some of the most vulnerable in our community are hit to pay for it. My community will not stand for it, and, as a representative in this parliament, I will not stand for it either. We know that the government is hell-bent on making it more and more difficult for everyday Australians, whilst at the same time handing over this $50 billion tax cut.

But let us have a look at the facts. We know from the government's own modelling that, in 10 years time, we will not see a huge return on investment from this tax cut. The first point I want to make is that there would be an annual ongoing cost of $8.3 billion to the Australian taxpayer. That is according to modelling that was released this week. On top of this handout, Australian families, pensioners, new parents, young people, students, people living with a disability and jobseekers will be disadvantaged. They will be forced to do the heavy lifting, with the ongoing cost to the budget of that $8.3 billion per year.

New calculations which have been released show that the $50 billion big tax cut in the Prime Minister's budget—do not forget this is the centrepiece of the government's economic strategy—will cost the Australian people an extra $4 billion in interest charges. As we have heard in the debate so far, that equates to $162 for every man, woman and child in the nation. The total interest bill will hit over half a billion dollars in 2021-22, before blowing out beyond $1 billion in 2023-24. So we are attempting to give multinationals a big tax cut, whilst at the same time sending ordinary Australians an interest bill. After all the lectures from this government about debt, deficits and spiralling interest costs, there is a $50 billion big tax cut in the budget, which will vandalise the budget and which will potentially threaten Australia's important AAA credit rating.

After all this is said and done, what is the endgame? We know from the government's own modelling—released by the government on budget night—that the economy would potentially be one per cent bigger as a result of this. That is one per cent over a decade. The economy would not be one per cent bigger every year—just at the end of the 10 years. This means the economy would grow at just 0.1 per cent each year. But that begins at the end of the decade of the tax cuts. So the claimed one per cent dividend is actually 20 years away. That is 20 years—two decades—of the Australian people waiting to see what that growth will mean for them. It is 20 years of waiting to ensure that they will be $8.3 billion worse off per year and that they will be slugged with an interest bill of $4 billion per year. Like many in the community that I represent, we are struggling to see any positives in this bill at all. We know from Treasury research showing the economic benefits of these company tax cuts that it will take 20 years for any long-term value, with half the benefit coming in 10 years.

So we are deeply concerned. As the Leader of the Opposition has continually said, we want budget repair with fairness. Clearly, we know that this government is so out of touch that their No. 1 priority, their No. 2 priority and their No. 3 priority are ensuring that we look after big business, that we look after the big banks, whilst Australian families bear the cost of this irresponsible and disastrous economic plan. It is a plan that will deliver cuts to Australian families, pensioners, new parents, young people, people living with a disability and jobseekers. As I have said, this comes down to priorities.

I am proud to represent a diverse community in southwest Brisbane, and I know from speaking to local small-business owners just how hard they work. I know the efforts and sacrifices that they make, away from their family, working long hours and putting in long days. In the electorate of Oxley, there are around 8,700 businesses. I am here to support them and to represent them. I am not here to represent large multinational companies. I am not here to represent the large national banks. They will take care of themselves, and they do. I am here to stand up for the hardworking men and women who I proudly serve in this parliament.

This is about a government full of wrong priorities. Just this week, there was a report about the significant contribution that the previous Labor government delivered in education reform. The Gonski reforms, which are transforming the power of education across the nation, are Labor's vision and legacy. It is about using investment to ensure we are investing in our young people, in our schools and in our skills sector. We know that the Gonski funding has been invested across the nation to lift the performances of all students in literacy and numeracy. They are Labor's priorities. When I speak to the school principals in my electorate, I know how important that investment has been for the kids and for the mums and dads in my community and in schools like Forest Lake State High School. Principals like Tom Beck have told me about the power of Gonski funding, which has paid huge dividends. The school has seen major gains in reading skills for students in years 7 to 9, with double the expected gains and achievement scores on reading tests.

Those results are there and that sort of investment is there for the world to see. We can see the transformational nature of investment in things like education, especially early education. The shadow minister at the table, the member for Adelaide, understands the importance of this and has been a long-term advocate for proper, adequate funding for and investment in early childhood. What we see from the government is the complete opposite—wrong priorities after wrong priorities.

We understand that, with this $50 billion big business tax cut, the government will be cutting funding from a whole range of areas that we know the community support. They will be cutting $30 billion from education funding over the next 10 years, including $20 million in 2018-19 from schools in my electorate of Oxley. That is $20 million that the government do not think is important. We had this ridiculous argument in the parliament yesterday, where the government seemed to pride themselves on wanting to cut funding from schools. This could be potentially the only modern government in Australia's living history that have proudly advocated reducing the amount of funding that we want to spend on our schools. They will be taking money from primary schools and lining the pockets of some of the largest multinational companies in Australia. It is clear to see that, by giving them that tax cut, the government are interested in the wrong priorities, not in investing in the future.

But we have also seen the crab-walk away, with the government now trying to look as though they are saying: 'We're open to new ideas. We're going to look at how we can target businesses elsewhere.' We have heard from the Treasurer in the last couple of days all this wriggle language, as he tries to walk away from their centrepiece. That is why I am not surprised that they have given up speaking on this bill today, that they have walked away. We have to remind ourselves that this was the government's centrepiece. This was the slogan of the election campaign. They said, 'Trust us; we'll deliver jobs and growth.' Well, we know that economic growth is not moving forward. We know that jobs growth is not moving forward either. As a result of them hoodwinking the Australian community, they have given rise to false hope, and they are now delivering a failed economic plan.

Labor has committed to a reduction in the small business company tax rate, provided there is bipartisan support from the coalition and it is conducted in a fiscally responsible fashion and in a fair way. I am proud to work alongside my chambers of commerce—the Greater Springfield Chamber of Commerce and the Centenary & Districts Chamber of Commerce—to support the 8,748 small businesses in the electorate of Oxley. The presidents of those local chambers do a fantastic job advocating and arguing for small business and jobs in our local community. I know that these local businesses are the backbone of our local economy and they provide hundreds, if not thousands, of local jobs. It is these small businesses—the mum-and-dad operators in my community and right across Australia—who deserve our support, who deserve to have Labor and the coalition work with a constructive and bipartisan approach. That is how we will see economic growth improve and that is where we will see the jobs growth.

But I will not stand here today and support a $50 billion tax cut to some of the largest multinational companies in our nation, when mum-and-dad operators—the coffee shops, the cafes, the service industries—in my local community need support. This is what the government should be focusing on, not worrying about the millionaires and billionaires across Australia. Labor supported the cut in the company tax rate for small businesses to 28½ per cent and we will support the further cut to 27½ per cent proposed in the 2016 budget, which will cover small businesses who represent 83 per cent of Australian companies. However, billion-dollar corporations are not small businesses, and it is time the government heard this message. Let us be clear about the government. They do not stand up for pensioners. They do not stand up for young people. They do not stand up for jobseekers. They do not stand up for Australian families. All the government are interested in is looking after the big end of town. Labor will stand by those who need it. (Time expired)

Rebekha Sharkie (Mayo, Nick Xenophon Team) Share this | Link to this | Hansard source

There is no doubt that the Nick Xenophon Team have shown that we have been a long-time supporter of small businesses. Small businesses, including over 100,000 farmers, are the backbone of the Australian economy, accounting for over 90 per cent of all businesses and just under half of all employees. It is an inescapable reality that Australia now operates in an internationally competitive market for investment. In order to entice more investment, to help grow our small businesses and to increase employment, we need to make Australian small businesses as attractive a destination as possible for investment. The Nick Xenophon Team is therefore supportive of extending the tax cuts to small businesses of up to $10 million in annual turnover. We can see that many small businesses do have a turnover higher than $2 million, particularly when you look at businesses like independent petrol stations, small supermarkets, restaurants, family accountants and even local lawyers and tradies—your average small businesses. In my electorate of Mayo, 99.6 per cent of businesses have an aggregated turnover of less than $10 million. To put it another way, of the almost 11,000 businesses in Mayo, only 43 are major enterprises with turnover in excess of $10 million.

Tax cuts can make a big difference to small business cash flow, and this has a real impact on how well a small business operates. It can mean the difference between taking on an extra employee or not, or opening a second shop. It can mean the difference between keeping their doors open or shutting down. Big businesses, on the other hand, enjoy economies of scale. They do not face the same disadvantages in managing cash flow or attracting investment that small businesses face. Whilst a lot of big businesses do pay their fair share of tax, many unfortunately do not. The Australian people are increasingly aware of how big a problem multinational tax avoidance is for our country and how it is undermining Australia's prosperity and future. This is because every tax dollar that multinational businesses do not pay is another dollar that must be taken out of the pockets of honest Australian businesses, workers and families. Businesses that engage in multinational tax avoidance are leaning heavily on Australian taxpayers, forcing them to put more than their fair share in to fund the services and infrastructure that multinational businesses also get the benefit of.

As I mentioned in my speech on the Diverted Profits Tax Bill 2017 in the parliament earlier, there are many examples of multinationals not paying their fair share of tax. For example, Google had an estimated income of $2.5 billion from local advertising in 2015, and yet they declared revenue in Australia of only one-fifth of that amount and paid only $16 million in tax. Why would they be entitled to receive a tax cut? That tax represents just 0.64 per cent—one fraction of one percent—of their estimated revenue. I cannot see why we would be kicking goals for them. In 2015, Facebook Australia's gross revenue figures were reported to be a measly $33.5 million, yet investment bank Morgan Stanley estimated that Facebook Australia's actual earnings from advertising in this country were between $500 million and $600 million. Facebook in that year paid only $814,000 in tax. Tell me, do we really need to give them a tax cut? Do we really need to support legislation that would give a company with those sorts of figures further ability to reduce their tax?

According to documents released by the tax commissioner in 2015, Transfield, a company with a $2.8 billion turnover, paid zero tax in the 2014 financial year. That same financial year, Adani Abbot Point Terminal in Queensland, which had a turnover of $268 million, also paid no tax—zero tax! How can it be possible that such huge companies can operate in Australia and pay zero tax? Something is seriously wrong if we think that that is okay and at the same time we are trying to put through this parliament $50 billion worth of tax cuts. According to Oxfam:

… as a result of tax dodging by Australian-based multinational corporations, the Australian public missed out on an estimated AUD $5-6 billion in 2014—

alone. To put this in perspective, this is roughly equal to the size of the annual South Australian health budget, and it is not too far off twice the annual South Australian education budget. Just imagine what we could do with that money if it were spent on our communities, not just in South Australia but all over Australia. People are doing it tough all over this country while the big multinationals are laughing all the way to the bank and being supported by government to do so. The government continues to reduce funding for health and education instead of focusing on efforts to combat multinational tax avoidance. It continues to rip money out of public hospitals and rural roads instead of getting the Googles and Facebooks to pay their fair share of tax.

Beyond this fundamental issue of equity is the broader question of whether tax cuts to big business would actually return the benefits to Australian society that the government argues that it could. Work by The Australia Institute indicates that a third of all benefits from the company tax cuts would accrue to just the largest 15 publicly listed companies in Australia. These include the big four banks and Macquarie, BHP, Rio Tinto and Woodside Petroleum, the supermarket duopoly, Telstra, QBE Insurance, CSL and Westfield. You will note that most of these companies operate in markets with high concentrations of market power. The predominant strategy of these duopolies and oligopolies and is to maintain their market share, through which they derive their market power and their ability to keep prices high. Innovation is far less important than advertising and strategic competition in these markets, and where there is innovation, it is to reduce costs—for example, by automating jobs through ATMs and self-serve check-outs, or outsourcing their domestic call centres to countries across Asia.

I have read very carefully what The Australia Institute have reported on this. They say:

If the aim of the company tax cut is to increase investment and employment much of it will be wasted if it is given to—

these large businesses. For example, in 2015 the large banks and insurers in this country made nine per cent of taxable income yet only 1.2 per cent of the total private investment in Australia. The evidence is thin on the ground that larger profits from these large banks would translate into more domestic employment or higher salaries, except for upper management or those who are in a better position to capture the super profits. I had a look before I came down to the chamber: as reported in The Australianin November 2015, Westpac cut more than four per cent of their workforce—more than 1,300 people lost their jobs—despite in the same season stating that they earned a $4 billion profit, increasing their profits by seven per cent. Where is the evidence that if we give these big banks a tax cut then they will somehow magically put on more staff? There is no evidence.

Besides which, the real profit of the company tax cuts is meant to be to attract foreign investment to Australia, the argument being that the benefit in terms of jobs and innovation that the foreign investment will bring in will outweigh the cost of the tax revenue forgone. But if our domestic companies are already making more than enough profits to enable them to reinvest in their own businesses, all a tax cut does is create a leakage of tax revenue via their foreign shareholders. This is a substantial leakage. In 2015, total foreign ownership of Australian non-financial corporations was over 40 per cent. For financial corporations, a group that includes the big banks, total foreign ownership was about 55 per cent. This means that, on average, 55 per cent of the value of a tax cut to a bank will be sent overseas to the pocket of a foreign shareholder. It is no wonder that even some of the coalition backbenchers have spoken about making the big four banks exempt from company tax cuts, although I note that that was quickly shut down.

This is an absolutely rubbish return for the Australian taxpayer. There is no reason to think that foreign shareholders are necessarily investing their fatter dividends into brand-new projects and enterprises in Australia. A tax cut for big business is simply not a tax cut well spent for the Australian economy. Even if you were trying to encourage foreign investment, it does not seem fair to tax the Australian firm more than the foreigner, even if one is a lazy domestic big business and the other is an innovative foreign investor. However—and here I return full circle to my original argument—it makes more sense to give tax cuts to smaller firms than to larger firms, because small business tends to be more competitive, more innovative and—dare I say—more agile, because they have to be in order to survive.

In conclusion, the Nick Xenophon Team will support tax cuts to businesses with an aggregated turnover of up to $10 million. We understand that those are your neighbourhood petrol stations, we understand that those are your small supermarkets in your townships and we will continue to stand behind the small businesses run by hardworking Australians every day. But we cannot in good conscience support tax cuts for the biggest Australian companies, which do not necessarily reinvest a strong percentage of their profits in domestic activity that would generate additional employment. And we cannot in good conscience support a tax break for big business while multinational tax avoidance remains meaningfully unaddressed. We need to ensure that big national businesses pay the fair share of tax they are meant to be paying before we as Australians give them another tax cut.

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

It is my pleasure to follow so many colleagues who have made so many good points about the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016, including just now the member for Mayo. But there are also the points that have been made on this side of the House by the member for Oxley and others as we oppose this big business tax cut, a $50 billion ram-raid on the budget. I am proud as well to support the amendments moved by the member for McMahon, who made the very sensible point that when the budget is in the condition it is in right now it is just madness to contemplate taking $50 billion off people and off the bottom line of the budget and hand it to the big multinationals and the big four banks. So I am proud of our position.

We are part of a bizarre spectacle where we are debating a bill about a tax cut that we do not know will even make it to the weekend. When you read the articles that have come from well-placed sources in the government, when you look at the fact that the Treasurer stood at the despatch box a couple of times yesterday, and many times in the media, and could not even back-in this tax, which he says is so important to give to big multinational corporations and big banks. He has refused to back that in in the last little while. So everyone in this place and everyone in the media, and people in the broader Australian community who follow this important national debate know that in the House right now we are debating a bill that the government is about to gut. When they do gut this bill, it will be a humiliation for the Treasurer. It will be the final humiliation for the Treasurer, who has made a habit of humiliating himself, whether it be from his connection with the bright idea of holding the NDIS hostage to vulnerable people, or holding child care hostage to making cuts to the payments to vulnerable people, this Treasurer is generally at the seam of the biggest debacles.

The best summary of this shambles we are debating right now really is the fact that for some time now this Treasurer, this Prime Minister, all the ministers and all of those opposite have been going around the country saying that this tax cut is absolutely essential to jobs and growth. It is their only policy for jobs and growth in this country. They have gone around for months and months saying that it is absolutely imperative that we have this, because without it there will be no jobs and growth. In the short time since the election this tax cut has gone from essential to expendable, and now we get all these weasel words from the Treasurer about whether or not this tax cut will survive at all. This was their one-point plan for jobs and growth and that one-point plan is now in tatters.

The problem for the Treasurer, and the reason he cannot come to the despatch box and say whether or not the tax cuts still exist, is that he is in the unenviable position of knowing that he cannot keep the tax cuts, but nor can he ditch the tax cuts. The reason is that he has been given the choice between keeping the tax cuts or keeping his credibility, and, in his usual way, he has found a way to smash both. He has found a way to abandon the tax cuts, while simultaneously abandoning his credibility—it is quite an effort. It seems that if the government cannot hang on to its signature policy there is very little reason to hang on to the Treasurer. Already, we are seeing that process beginning, with the Prime Minister putting it about that the Treasurer is not quite up to the task of selling the budget and he, the Prime Minister, will probably have to do it himself. There are all of the sneaky little leaks in the pages of our newspapers, with all the colleagues on that side of the House, including the Prime Minister himself, considering that the Treasurer is not up to the task, not just of selling the budget, but he could not even get his one-point plan for jobs and growth through the parliament.

It is important to understand that these tax cuts are likely hitting the fence not because the government has come to the realisation that they are unaffordable and unfair, which is the point that Labor has been making for some time and not because of some conversion or some realisation, or finally seeing common sense. These tax cuts are hitting the fence because they are so incompetent that their highest priority, their reason for being, the whole purpose of those opposite, and they cannot even convince the parliament and the Australian community, and not even sections of the business community, that these are a good idea.

We have never supported this bill. We have not at any stage supported a $50 billion ram-raid on the budget. This budget vandalism sees more than $7 billion go to just four of Australia's biggest banks. We do not support it and we are proud that position. We are proud to support tax cuts for genuinely small businesses, the businesses that do fuel our local communities, the businesses in my area and right around the country that do work so hard and deserve some tax relief. We have supported them from the beginning. But we have not support of a tax cut for the very biggest businesses.

The reason we have never supported this bill and these tax cuts is that they will smash the budget at a time when we have a deficit that has tripled between the first coalition budget, in 2014, and now, and we have a $133 billion blowout in net debt from the day the government came to office to now. It seems just common sense that Australia cannot afford a $50 billion tax cut for the biggest businesses, which is the point made in the amendment to this legislation moved by the member for McMahon.

With a fiscal record like that—a fiscal reform of tripling the deficit and big blow-outs in debt—it is no wonder that the ratings agencies are circling this government and warning that the AAA credit rating, which matters for mortgages out in our neighbourhoods and towns and matters for confidence in our economy, is at risk because of the gross incompetence of those opposite, because of the shambles they have made of the budget. In that context we should never give $50 billion away in such an unfair way and in a way that smashes the budget. That is before we even get to the point the member for Oxley made about the $4 billion in interest that Australians would pay when the government borrowed $50 billion to give to others.

I have said it before, and I will say it again—

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

Say it again.

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

thank you, Member for Adelaide—if you say to those opposite, 'Can we find the money to properly fund the NDIS,' they say, 'No, that's impossible.' 'Can we properly find the money to fund child care?' 'No, that couldn't possibly be done.' But if you say, 'Can we give $7 billion to the big banks?' They say, 'Of course we can.' 'Can we give $50 billion to the big companies in this country?' 'Of course we can.' They can find $50 billion then, but they cannot find it when it comes to the things that we really care about in this country: a decent social safety net or looking after people with disability.

Even their own Treasury analysis of the tax cuts, and analysis that has been done by others, shows that the growth dividends from these tax cuts, despite being such a huge cost to the budget, will have a negligible impact on growth and a negligible impact on wages even some decades down the track. They are not worth the money that the government wants to spend on them. That is one of the reasons why people from the business community have started to come out and say: 'You know what? The company tax cut the government proposes is not the be-all and end-all for us.' Businesses make decisions on a whole range of issues: on infrastructure, on human capital, on the regulatory environment and on consumer confidence. All of these sorts of things matter, and it has been pleasing and it has been heartening to see elements of the business community make that point in recent weeks.

Those opposite like to claim that if we transfer this money to the bottom line of companies there will be some miraculous impact on jobs and on wages. They are failing to understand that we have got booming company profits at the moment. There are really high company profits—I think the last available data said it was a boost of about 20 per cent—at the same time that we have record low wages. That link between company profits and wages that are paid to people who do the work for these companies has been severed. We have record low wage growth and we have these extraordinarily high company profits, so the claim that somehow, if you transfer another $50 billion to the bottom line of these companies, it will have some kind of boom in wages or employment is a laughable claim. It should be dismissed.

Mr Howarth interjecting—

It is very tempting to take the interjection from the member for Petrie, but—

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

The member for Lilley supported them before and he was a member of staff.

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

The member for Petrie could not be more wrong.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

The member for Lilley clearly supported them.

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

The member for Petrie comes in here and makes a laughable point. We have never supported these tax cuts, and nor should he.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

The member for Lilley clearly supported them.

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

The member for Petrie has some kind of obsession with the member from Lilley.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

It is the first time I have spoken about him in four years.

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

Every time the member for Petrie comes in here, he proves again why he is such a struggler in this place. The member for Petrie would do well to learn his facts before he pipes up.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

Mate, I have got quotes from the member for Lilley.

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

In fact, the member for Petrie really should not pipe up in this context. Without any protection from the Deputy Speaker, who lets this fool interject over and over again without any intervention, I will just persevere.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I think the member for Rankin is quite able to look after himself.

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

I do my best.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

He does not need my protection.

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

The biggest problem with these company tax cuts is their divisive nature. In a time when we have people looking for political alternatives, in a time when we have record low wages, in a time when people are struggling to get by, the government's bright idea is to cut family payments, to support cuts to penalty rates at the same time as they give $7 billion to the big banks. It is hard to imagine a more divisive agenda than this. The member for Petrie will not be able to say whether the tax cuts are coming or staying. He is probably a few days behind as usual, and he has probably come in here not realising that the Treasurer is going to ditch the tax cuts that the member for Petrie is speaking in favour of.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

Well, if you vote for them, they will not be going anywhere.

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

My advice to the member for Petrie is to go and have a gander at the papers and see that the Treasurer has abandoned this tax cut that the member for Petrie is still arguing vehemently for. You are generally a couple of days or a couple of weeks behind. I will let you catch up.

What we have got in the omnibus bill that was in the Senate last night, what we have got with the government's support for wage cuts for low-income earners, is an extraordinary contrast not just between this side of the House and that side of the House but also an extraordinary contrast between what they propose to do on that side of the House and the fair go that we cherish in this country. What they want to do over there—the member for Petrie and all of his colleagues over there on that side of the House—is make the fair go in this country an aspect of Australia's history and not an aspect of Australia's future. We will not stand for it. That is why we are proud to oppose these tax cuts that are about to hit the fence anyway, no matter what the member for Petrie says. The member for Petrie can charge into the debate saying they still should be going ahead; at the same time the Treasurer, in his office right now, is trying to work out how to slink back from these big business tax cuts.

Whether the tax cuts stay or go, they will remain an aspiration of those opposite. They will remain a symbol of the government's intention to take money from the most vulnerable people in our community and to shower largesse on the wealthiest people in our community. They will remain a symbol of this redistribution of wealth that they drool over, which is to take money from people who are on family payments or take money from the NDIS or take money from people who work on Sundays to serve them coffees. They want to see money come out of the pockets of ordinary working people, and they want to see it go to the bottom line of the big four banks. That is a disgrace.

For as long as they have that view, the Australian people will continue to turn on them. Some of them will continue to look for political alternatives in the extremes of our politics, but, mostly, people will judge them harshly for an agenda that takes money off the weakest in our community and showers largesse on the strongest. That is the main reason why are we oppose these big business tax cuts. We do not think that money should be showered on the biggest companies. We do not think that the big banks should get $7 billion tax cuts. It is very important to us. When the budget is in the mess that it is in, when the deficit has been tripled by those opposite and debt has blown out so substantially, the country cannot afford a $50 billion tax cut.

The fact that so many speakers have dropped off the list for those opposite shows they know, as we know, that these tax cuts are probably going to hit the fence. We know that when that happens not only will they be humiliated—particularly if they stand up in a moment and defend these tax cuts—but also the Treasurer will be humiliated. If the government is not prepared to cling to the Treasurer's own policy, it is hard to see how the government will cling to the Treasurer himself.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I am not sure whether the member for Rankin has ever bought, run or owned a small business, but by the content of his speech I would have to say, no, he has not. I have. My husband and I bought our first small business, a dairy farm, on the day we got married. We learnt very, very early on how important interest rates and tax cuts are. We built a business at a time when interest rates went from 18 to 23 per cent. If you were a small business operating in that environment, every single point or per cent of a tax cut was critical to whether you survived or failed. Now, I would suggest that that is an experience that the member for Rankin has not had the courage to take a risk with. From the content of his speech, he has not. He does not understand small to medium enterprise or the people who are actually having a go which is what we support on this side and why we are so supportive of the measures in this Treasury Laws Amendment (Enterprise Tax Plan) Bill. I am very pleased to speak on this bill. I have every confidence in our Treasurer and the measures that we are taking as a government. In fact, when we look into the medium term it is a saving of around $250 billion on the mess left to us by Labor. So I will not be lectured by the other side.

Australia might well be a geographical island; we are certainly not an economic one—which is the rubbish we hear from the other side, that somehow we stand in isolation. Well, we do not. In economic terms, the world is a much smaller place and a smaller and very competitive marketplace. As a dairy farm, my products are competing with those around the world. If a German group is landing a milk product into China at 65c a litre, I know that that is what I have to compete with. That is the nature of the market—the real world, not the fantasy world of the member for Rankin. When we were a group of independent colonies, early on in our Federation, we could survive easily on our domestic consumption, as we saw, and easy agricultural exports to the Old World. The nation did indeed ride on the sheep's back—and perhaps on dairy cows. But in the world of this 21st century, it is entirely different.

As a small, open economy competing with the nearby fiscal giants, Australia's living standards are determined by the level of the terms of trade, our labour productivity, labour force participation and population—all of those. Improvements in our living standards must be driven by a higher level of labour productivity, which we as a government believe will be driven by lower company income tax rates. It is no longer sufficient to believe that the investment will simply come to Australia because of our stable government and safe investment environment. They were the staples underpinning our economy in the second half of the 20th century, and we constantly heard businesses talk of Australia being a safe investment option. But safe is no longer the determining factor.

Today, a raft of nations are seeing a massive influx of capital, including many which were, until the turn of the century, considered developing just decades ago. Asia and Africa are both now magnets for investment capital and we in Australia are at risk of being forgotten by the policies of those opposite and seen as a wallflower in the global economic dance. The rewards available from investment in countries previously labelled as unsafe are too attractive to ignore. That is the competitive world we live in. Yet, within this new economic paradigm, ongoing investment in Australia is critical as one of the key drivers of our labour productivity and economic growth. That investment will demand a competitive corporate tax rate.

Corporate tax rates that are increasingly uncompetitive will make it harder for Australia to continue to attract the necessary investment. Our corporate tax rate is high compared to many countries that we compete with for investment, especially those in the Asia-Pacific region. Of course, as we have heard from the other side and from the member for Rankin, Labor are arguing that this tax burden is better placed on corporations than on individual citizens. However, company tax usually is passed on so that the burden is carried ultimately by shareholders, consumers and employees. So the individual bears much of the burden anyway.

A more competitive business tax environment would encourage higher levels of investment in Australia, which, as an absolute net exporter of capital we need, given the falling levels of private investment we have seen as we transition from the mining investment boom to broader based economic growth. The increased investment will benefit all hardworking Australians through increased employment and wages in the long run, predominantly through permanently higher after-tax real wages and consumption. That is how it works. As economies become more open, barriers to investment can have a greater impact on economic growth and real wages growth. In response, corporate income tax rates have fallen worldwide in recent years. This is our competitive environment. The loss of this competitive edge will have real impacts in the future.

The United Kingdom reduced its main corporate tax rates in stages from 30 per cent in 2008 to 20 per cent from 1 April 2015. Over the period from 2008 to 2014, Canada reduced its main corporate tax rate from an average of 36.1 per cent to 26.5 per cent. And an extreme case, Singapore has reduced its corporate tax rate from 20 per cent to 17 per cent. So we do need more competitive tax rates just to be in the game, not to be ahead of the game just to be in the game. So reducing Australia's corporate tax rate would increase our appeal as a place to do business and that is what the opposite side used to agree with as well, and it would encourage high levels of investment in Australia.

In Western Australia this is particularly relevant. We back small businesses and we understand their value to the economy. We are reducing their tax rate to 27.5 per cent, starting with businesses with a turnover of less than $10 million on 1 July of this year. This will deliver a lower tax rate for around 870,000 companies who employ over 3.4 million workers in this country. That is a great result for those small to medium businesses. Over 10 years, the government will encourage investment and higher-paid jobs by decreasing tax rates across the board. This helps to make Australian companies more internationally competitive, because it is a very tough global marketplace. That results in much better, higher living standards for Australians, and it is of benefit to all of us.

On this side, we know that small businesses are a key driver in our economy. I see it at the local level all the time. It is the small to medium businesses that carry much of the weight of the economic multipliers in the $16 billion GDP region that is my South West. There are over two million actively trading businesses in Australia. Almost 96 per cent of those are small businesses and 3.8 per cent are medium businesses. The combined numbers of those two business types employ 70 per cent of the nation's private sector workers, and 59 per cent of all Australian workers are employed in small to medium businesses. It is no wonder we are focused on small to medium businesses. Small businesses, those with less than 20 employees, alone account for nearly 46 per cent of all Australia's businesses in the private sector. That is an extraordinary effort by the small business sector.

As I have said previously in this place, so often it is a small business that will give the individual their first employment opportunity, and often, in the more senior years, it is a small business that will give somebody the final employment opportunity in their working life.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

That is correct.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

They do an amazing job in this space. In my community, and in so many others that I see, the small to medium businesses support my football clubs, my sporting clubs and my community service organisations. The small businesses are often the glue that helps to hold our small communities together. It is important for me, as a dairy farmer, to be able to drive into my home community of Harvey and buy the basic items I need for my business. When we break down or we need an item for a repair or maintenance, whether it is for the milking machine or to do with our vehicles, we often to draw on other small businesses that are providing services in our community. That is the importance of small business right around Australia.

I am very pleased that we in this government have been very proactive in supporting small businesses with many of the initiatives that we have taken. The instant asset write-off has been an absolute boon for many small businesses. Some of the businesses in my electorate are doing such a great job. I want to talk about Traffic Force. Traffic Force is a 100 per cent WA owned and operated business involved in traffic management solutions, and they are doing a fantastic job in Bunbury. I look at all of the farming businesses, the small to medium enterprises and, of course, our food manufacturers. So many of them are small to medium enterprises, and we have heard how agriculture has overtaken mining as our major exporter. How many other small to medium businesses, both direct production and manufacturing businesses, sit beneath them? There are thousands of them. These are the ones driving the exports.

I have been able to secure nearly $10 million from this government to help upgrade the Busselton-Margaret River Regional Airport to enable it to manage international freight. That is going to be a transformative opportunity in the South West. Not only are we going to see the potential of 120,000 new tourists coming from, perhaps, this side of the world, some of the members in the House might choose to fly directly into the Busselton-Margaret River area and enjoy some of the amazing experiences and food. Outside of Perth, it is the events capital of Western Australia. We have so much to offer, and the fact that very soon you will be able to fly directly into this area is going to be an absolute economic multiplier. All sorts of small to medium businesses that we are seeking to offer tax relief to will be part of that growth and, in fact, will drive that growth and opportunity. I look at other small businesses like Think Water in Bunbury. Some of the work they do with irrigation systems is just amazing. Hastie Waste at Donnybrook has grown from a small business to be a key part of managing waste in our region. Accountancy and all sorts of service providers in my part of the world are also doing a great job.

I want to finish on a company called BCE Surveying. They have the only 3D-survey-grade, mobile laser scanner in the Southern Hemisphere. They have taken a risk, invested their own money and gone out and bought and perfected this particular equipment. It is an amazing piece of equipment that can have a significant impact on the cost of building major roads and bridges, bringing them up to 3D-survey grade by driving through and capturing all of that information. They are doing an amazing job. Now they are going even further, investing in the type of laser that brings up all the services beneath the surface. There are opportunities in construction and maintenance of long-term assets with the sort of picture that that will give. If you were tunnelling and you were able to do a run-through with this 3D-survey-grade laser scanner to look at the top level, at all the buildings, you would be able to bring up the finer details of each building. Then, if there were claims made about, perhaps, increased damage to buildings, you could do another run with that particular piece of equipment and you would be able to bring up if and when there had been any damage. So this particular piece of equipment has incredible capabilities, and I commend BCE Surveying for actually investing and taking a risk and employing people to do so. And that is why we are so committed to the measures in this bill, and so committed to offering tax relief to small and medium businesses and to making sure that everybody investing in this country gets the opportunity they deserve.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Member for Forrest, just to clarify for Hansard: did you actually say, at the beginning of your address, that you purchased your farm on the day you were married?

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

Yes, Mr Deputy Speaker—on the day we got married. My husband actually said to me: 'I hope you're not marrying me for my money. It is all printed in red.' And it was!

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

It is always a pleasure to rise in this House and speak about the tremendous things that this coalition government is doing to support business and economic growth in this great country. I rise to speak today on the coalition government's plan for greater investment and more jobs through the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016.

Reducing the amount of tax that business pays, through this enterprise tax plan, is designed to help 1.8 million Australians who are looking for extra work to boost their take-home pay—and not only to boost their take-home pay. For those who are presently employed, there is the understanding that the businesses they work for are more stable and more financially secure and that that improves their job security and their prospects for the future.

The concept is simple, albeit that those opposite do not seem to be able to grasp that concept so well. It is that business paying less tax frees up their money—and this is the important aspect: it is their money—to pay employees more and to give them more hours of work, and to invest in new equipment and to grow their businesses.

It is important that, as a government, we continue to ensure we have a long-term, sustainable, social services security net for those in our community who are genuinely in need, including funding for health and education and the welfare budget. This will help those people in the community who need that hand up. But these important measures in this space cannot be achieved without having a strong economy, and to have a strong economy we need strong businesses of all sorts but in particular small business. To improve this, we are looking to reduce the tax burden on these businesses so that there is more money to employ people and to increase their hours of work and pay. This is why we do need a company tax cut.

Those opposite have rejected the enterprise tax plan and want to deny small business and their hardworking employees access to further investment and growth opportunities. If those opposite get their way, our economy and the hardworking people in it will be the worse for their actions.

Compared to many countries around the world with which we compete on a daily basis, we are now seeing that our corporate tax rate is coming to be at the high end of rates globally. And corporate tax rates which are increasingly uncompetitive are going to make it harder for Australia to continue to attract the necessary investment. This is important because we, as a nation, have had a history of requiring external capital investment in our country to grow and develop. That ongoing investment is one of the key drivers of growth in our economy, while company tax paid by companies is ultimately a burden that is passed on to consumers and employees. A more competitive business tax environment will lead to or encourage high levels of investment in Australia—or, importantly, will retain the existing levels of investment in this country, because, as I said before, as a net importer of capital, we need to ensure we have a competitive framework to attract and, importantly, maintain that capital.

This is especially important in the current environment where we have falling or plateauing levels of private investment, as we have made the transition from the mining investment boom to broader-based economic growth. This increase in investment will benefit all hardworking Australians, not only those directly employed by those businesses but also those who are customers of or suppliers to those businesses, through an improved range of products and the purchase of new equipment. It is the flow-through and multiplier effects of this investment through our economy that do such a great job in growing the economy through a broad range of businesses. That is the value of this enterprise tax plan.

And the big winners out of this plan are Australia's small businesses and those hardworking mum-and-dad businesspeople who are having a go and making an enormous contribution to our economy. Small businesses in Australia employ more than three million workers and, in 2013-14, added some $340 billion to our economy. Australia needs our small business sector to succeed. It is the home of enterprise and opportunity and often the place where big ideas begin.

Leading into last year's federal election, the coalition government provided its vision for the future of Australia, and that vision was to see our great nation grow and prosper and to give every opportunity to Australians to excel. When we shared our vision for Australia, we also presented our plan for that vision, and the Australian people endorsed our plan and returned us to government so we could see it through. With our government's major plan to grow the economy and create more jobs, we promised to stimulate small business by cutting the company tax rate to 27.5 per cent for businesses with an annual turnover of less than $10 million.

Many of us in this chamber have small businesses in our electorates. In my electorate of Forde there are more than 15,000 small businesses. Reducing the company tax rate for these 15,000 small businesses in Forde creates a tremendous opportunity for these small, and in many cases family, business operators to grow and develop their business. It reduces financial pressures and gives them the cash flow they need to reinvest and grow their business. As I said before, this money is not the government's money; it is the money of these business people. It is money that they and their employees generate through their time, effort and ideas. Reducing the company tax rate means the difference between a business potentially stagnating or using that opportunity to reinvest and purchase new assets that help grow the business, new plant and equipment. It means the difference between potentially struggling to manage current operations and expanding their workforce to improve customer service, product development and business turnover.

My electorate of Forde, located in South-East Queensland, is one of the fastest growing regions in Australia and one of our most prosperous areas is the Yatala enterprise area. The businesses in the Yatala enterprise area are of a wide variety, large to small. They produce a range of products that many would never hear about because they go into some other bigger product. Our population is growing, new homes are being built and our road infrastructure is getting busier. It is why we need growth in our business sector: to provide the government with the revenue and funds necessary to be able to build the infrastructure and services we require to support this growing community. The government needs to support this growth. We want to see our electorates prosper, and this is what this enterprise tax plan is designed to do.

The coalition government recognises that business taxes represent a higher cost for small business, which is why we will reduce the tax burden on small business first. Since many small businesses are not companies, the government will extend the unincorporated small business tax discount from 2016-17. The discount will be available to businesses with a turnover of less than $5 million, up from the current threshold of $2 million, and will be increased to eight per cent. Further support will be provided for small businesses to expand and create jobs. Access to a number of tax concessions will be provided by increasing the threshold for those concessions to $10 million, up from the current threshold of $2 million. These changes alone will benefit over 90,000 small businesses in Australia.

I am proud to say that the many hardworking small business owners in my electorate of Forde are ready to embrace these opportunities that these tax concessions will provide. For some it will mean investing in new equipment, expanding their workforce or taking on trainees and apprentices, for others it will mean investing in marketing, improved technology or expanding into the international market. However these businesses decide to reinvest their hard earned dollars, it means more opportunities for Australians. This is the value of the enterprise tax plan and why is it so important that this enterprise tax plan passes the parliament.

What is the alternative? Well, there isn't really one from those opposite, other than higher taxes for hardworking Australians and small business people. Those opposite have rejected our enterprise tax plan and want to deny small businesses and their hardworking employees' access to further investment and growth opportunities. This is despite the fact that the Leader of the Opposition said in 2011:

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.

This was despite the shadow Treasurer writing in his book:

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

I find it fascinating that those opposite now consistently claim that we do not need the enterprise tax plan because education will deliver a bigger and more immediate economic benefit. The problem with that is that if we want education to deliver those benefits, then those people who are educated need a job. If we do not have lower taxes and create the opportunities for businesses to grow, develop and prosper and if we do not have jobs, then what are they going to use their education for? This is why it is so important that this plan is passed in this parliament, so it creates the opportunity and the incentive for business to grow, prosper and develop. It will provide opportunities for employers to invest in their businesses; it will give businesses the certainty they need to make long-term investments. That certainty also creates the opportunity for business to grow, because the business owners have a confidence in investing that capital. It also gives foreign investors the opportunity and the security they need to make long-term business decisions.

It is only the coalition government that has a plan to support business growth and economic development. We are supporting Australians who want to work more hours, we are supporting Australian who want to earn more and we are supporting Australians who care about securing their future. The government's enterprise tax plan will boost the Australian economy and we will see benefits in every electorate, in every home and in every business. I commend this bill to the House.

Debate adjourned.