Wayne Swan (Lilley, Australian Labor Party) Share this | Link to this | Hansard source

Today I want to expose a number of myths—four myths actually—that the Liberals use to justify cutting their unfunded corporate tax cut of $50 billion. The first myth is that cutting the corporate tax rate will reduce the incentives for companies to evade tax. The truth is many companies are paying little or no tax, and they will continue to evade tax whatever the rate that is put before them. The fact is, and it is an unfortunate truth, there are a significant number of our most respected companies who are already engaged in very significant tax evasion, and reducing the rate will not in any way impede that activity.

These respected companies have become fiscal termites, eating away at the foundation of our corporate tax system. Companies like BHP and Rio have engaged in a very aggressive process of transfer pricing, and have sought to evade, in the case of BHP, $5.7 billion, which has instead been squirrelled away in their Singapore tax shield. To make matters worse, BHP and Rio have also sought to evade state royalty payments in Queensland and Western Australia while engaging in unprecedented political interference and thuggery in state election campaigns—most recently in Western Australia, where they got even with those who stood in their way.

What we have in this country is a 'commodities Kremlin', where some of our biggest companies are behaving like dictators, treating the people of this country with contempt and behaving as if they are above the law. This commodities Kremlin, which operates mainly through the Minerals Council, has a darker layer of activity, which eats away at the very foundations of our democracy.

The second myth is that cutting corporate taxes will create jobs by encouraging investment and boosting economic growth. There is very little empirical evidence for this claim. If we look at OECD countries between 2011 and 2016, we see that Australia grew 15.6 per cent in terms of GDP growth and ranked 11th, but not one—not one—of the 10 countries that secured stronger economic growth than us over the same period did so by cutting its taxes. For the Liberals' myth to hold, Australian companies would have to be so cash constrained by high tax rates that they were unable to invest but, as the February ASX 200 reporting season showed yet again, most companies increased their profits and increased their dividend payments.

Furthermore, when compared with other OECD countries, Australian companies do not face exceedingly high tax rates. At 30 per cent, Australia's corporate rate is still lower than the OECD weighted average of 31.6 per cent. Thanks to the transparency legislation introduced by Labor, we actually know what the effective tax rate is for Australian companies. Public companies in Australia pay, on average, 24 per cent on their taxable income, while private companies pay an average of just 19 per cent. So if the jobs and growth that the government is seeking to propel are not materialising at Australia's effective rate of 24 or 19 per cent, how will any cut in the headline rate make any difference to what they are going to invest?

The third myth is that the benefits of cutting corporate tax rates will flow to workers. This one is a farce. The Treasury's own modelling shows the government's five per cent corporate tax rate would increase employment by just 0.1 per cent by 2026-27—all at a budgetary cost of only $48 billion! The only beneficiaries from the company tax rate cut will be foreign investors, who are excluded from dividend imputation.

The final myth is that cutting the corporate tax rate will help Australia to stay competitive and attract scarce foreign capital. Global markets are awash with cash; they are looking for safe places to invest, where companies are profitable and where the institutions of the economy are strong. Australia is a safe haven, and global capital wants to invest here because it knows it can make a profit with a secure outlook. If the corporate tax was such a disincentive to capital, we would not have 97 per cent of applications to the FIRB coming from countries with company tax rates that are lower than Australia's.

These four myths completely demolish what this government are on about with their corporate tax cut. What they are really on about is concentrating wealth, more trickle-down down economics and pushing all of the resources to the people who put them in power. They are puppets of the commodities Kremlin. (Time expired)

Susan Lamb (Longman, Australian Labor Party) Share this | Link to this | Hansard source

It was only earlier this week that I spoke in this very chamber against this government describing hardworking men and women who are members of their unions as thugs. These 'thugs' are teachers; they are nurses; they are pharmacists; they are educators; they are hairdressers and they are baristas—they are the people the government are calling thugs. You would think the government would have a better understanding of thuggery, considering how NBN Co has treated vulnerable small businesses.

Earlier this month I held a small business roundtable to understand the impact of the government's mishandling of the NBN rollout and the impact it has had on our area. Of the countless stories disclosed to me by small businesses owners about the NBN process and how their businesses had suffered, one stood out. It was from a lady by the name of Joanne who manages the Golden Age Retirement Village. She said that the 'downgrade' to NBN had not only cut the reliability of her internet access but taken out her phone line. To her business the line was dead, but to a caller the line would just ring continuously. Because of this she was subjected to some really angry visits from people who thought she was simply ignoring their calls. Joanne was forced to take out some paid advertisements in the local paper to let locals know that the business was still open and had not closed down. She is now very concerned about how she is going to explain these charges that she has had to incur on behalf of the village and the countless hours and dollars that have been wasted to her business auditors when tax time rolls around. How do you explain wasted money even if you really had no choice at all?

But what has really scared the Golden Age staff is that most of the people that live there have some pretty significant health risks and there may be implications to their health from an unreliable communication system. It is absolutely inconceivable that somebody would do this. Joanne expressed these issues to NBN Co time and time again. NBN Co ignored her time and time again. They refused to accept responsibility. They refused to help. Finally, there was a glimmer of hope, though: they agreed to come out and meet Joanne at the facility. But then shortly after that those hopes were dashed because NBN did not show up to the meeting. What is quite remarkable is that after all of these months NBN Co finally went out and resolved this issue, and it was only just days after I had released a media release reporting these issues and the plight of Golden Age Retirement Village—and all of a sudden they came out! It is outrageous that they turn their backs on this vulnerable business that needed them, until they actually spoke out.

But to make matters worse, they did not just fix the issues and go on their way. Instead, the representative tried to intimidate this business into signing a disclaimer stating that the outages were caused by no fault of the NBN. How are we supposed to believe that the time lines for these outages, which began immediately following NBN Co's intervention and ceased when the team actually bothered to show up, are just a coincidence? How can we be expected to believe that? No reasonable person could be expected to accept that because this is what thuggery is—when NBN Co turn up and try to exploit vulnerable businesses and then bully and intimidate them when they try to speak up. This government should hang its head in shame on the rollout of the NBN. Instead of working for people, they have politicised what should have been the largest and most significant infrastructure project in our history but, instead, is slow, ineffective and an unreliable mess. We know costs have blown out significantly. Countless Australians, including many in my electorate, are still waiting for what they were promised would be delivered by 2016. And now, as Joanne has just experienced, NBN Co are resorting to bullying tactics to silence those who speak out against them. This government has failed small businesses. They have failed our hardworking families, and they are failing to build the infrastructure that our country needs for our future.