Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

Congratulations, Deputy Speaker Claydon. I spent some time on the Speaker's panel, and it's a great pleasure. One of the downsides of moving into the shadow assistant ministership is that I can't do that now.

The government talk about jobs and growth. They are the two words they use perhaps more than any other. I have struggled over the last four years to see evidence of any action which will actually drive jobs and growth. For the first three years under Prime Minister Abbott, I have to say, I saw the country essentially push the pause button on all the things that matter—on all the opportunities in the world and all the change that we have to undertake as a country. There was just a pause button for three years. Then, when Prime Minister Turnbull took that position, I had a moment of hope. It didn't last long, but I had a moment of hope because I honestly believed we could not continue with our finger on the pause button in the way we had under Prime Minister Abbott. Now here we are in the fifth year of the Abbott-Turnbull government, and the only thing I can see, the one-point plan that, according to the government, will drive jobs and growth is this big business tax cut. This is it. Of all of the things they could do, this is it—the one-point plan that we debate right here.

Essentially, it's a progressive tax cut that reduces to 25 per cent for businesses with a turnover of more than $50 million. It reaches that level in 2024-25. We will see a progressive reduction until 2024-25, when businesses with a turnover greater than $50 million will be on 25 per cent. It's a cost of $36.5 billion over the medium term. When you add that to the tax cuts for those below $50 million, it's $65 billion by 2025-26 and then multiple billions every year after that, when it fully kicks in. They talk about jobs and growth. This is their big plan, just this. But, by their own figures—and these are their figures; they're not mine—this tax cut will generate one per cent growth in 20 years time.

When Prime Minister Abbott was first elected, in his first couple of days he said, 'We're going to slow the pace down.' But I do not think that anyone would have expected that a government in this day and age, with the challenges that we face in terms of stagnating wage growth, general growth with a '1' in front of it and incredible increases in the underemployed, would be needing to slow the pace down to such an extent that we are looking at 20 years to get any benefit, even one per cent growth, from their one-point plan. This is all they have—one per cent growth in 20 years time or the equivalent of a $2 a day wage increase in 20 years time. That is their plan for jobs and growth. This is it. And then, of course, this dud of a policy will be built into the base, so every government that comes after this one will have that additional revenue drain out of the government budget in its bottom line. I am quite hopeful that this government will not be here in 2026—I suspect they will be gone long before that—but they have left an anchor around the neck of future governments with the bill they have presented today.

Since the election I have come in here, I have sat in caucus, I have gone through the bills we are debating and I have looked for anything that looked forward. I have some bills that trashed things, bills that cut things, bills that abolished things. But I haven't seen anything at all that genuinely attempted to stimulate the growth in their great 'jobs and growth' strategy. Nothing. They have blamed. They have misled. Even in their fifth year, anything that could possibly go wrong is still Labor's fault; we are the most powerful opposition ever! Five years down the track, the government has doubled the debt. But, somehow, it is still our problem. Electricity prices have risen enormously over the last four years. Somehow, that's our problem. Liddell, the coal-fired power station, will close in 2022. Somehow, that's our problem. Somehow, over the five years of this government, even in opposition we have managed to be responsible for all—which means they take no responsibility at all. Perhaps that is why they can come in here and sprout the words 'jobs and growth' and do nothing that actually achieves that.

The government—and I have said this once before, when I was talking about Treasurer Hockey—reminds me in many ways of a business that is going through tough times and cuts its marketing budget and inventory. So you walk past the shop and there isn't much there to buy; and you would know that what you have there is a business in its death throes, that is gradually winding itself down. This government reminds me of that. There is nothing to lead to jobs and growth—in fact, quite the opposite.

This bill will finally cut in in 2026. Looking ahead to what the country will need then, I am not sure the corporate tax rate is the thing that I would go to first. If we want to position our economy for 2026 and beyond, and we had $65 billion dollars to spend, what would you actually spend it on? Would it be this? That is the decision this government is making. We on this side say no, it's not the first priority. Funding for universities is essential. If you want this country to be competitive in 2026, we need to build the university and training sector for 2026. Yet this week we have seen this government vote to cut funding to universities to make it harder for people to make their way down that path to the jobs of the future.

You would also want really good high-speed fibre. You would want that not just so that people can enjoy the benefits of it but so Australian businesses in the technology space were able to compete with the rest of the world in that space. If you don't have a critical mass of high-speed fibre, you reduce the capacity of local tech companies to develop new products and grow in the way we need them to so that we can compete in 2026. What've we got instead? We've got a mishmash of technology that in some cases has download speeds that are miserable; and the upload speeds required for the Internet of Things, for example, are simply not there. The requirements of 2020, let alone 2026, are well beyond what this mishmash of technology will offer. The government of the day scrapped it because of its cost, yet it's prepared to put $65 billion into a tax cut for big business which will generate no more than one per cent growth over 20 years. I would bet that a real investment in high-quality fibre communications technology would give you a better bang for your buck than that.

We've seen this government cut the ground from under renewable energy, and we've seen investment in that area fall to incredible lows—a dramatic reduction in the amount of investment going into renewable energy, because of the uncertainty. Again, this is an area that you want to grow if you want to position this country for 2026, not just so that we can have cleaner power and contribute to emissions reduction but so that our businesses can be world leaders in the technology which is taking over the world. If you don't invest now, other countries and other businesses elsewhere will fill the space that we leave. We want our businesses to be world leaders, yet this government are not there at all; they've driven that sector backwards.

If you want to look to 2026, you have to understand that data is going to be the oil of 2026. We have a government siloing ours and selling it off to business in little sections—the cancer register to Telstra, for example. That's where you invest. Where is the investment from this government in making sure that Australia is one of the world leaders in big data, and the use of government data by businesses external to government exploiting data for the benefit of the community and for business growth? Where is the government's plan for that? There isn't one. There's no talk of it. There's nothing going on in that space. It's the same with fin-tech and reg-tech. We hear a few words every now and again—we heard some words early on from the Prime Minister—but there's very little going on in that space, from the government perspective. In fact, as you'll remember, Madam Deputy Speaker Claydon, in the early years the government actually lost its minister for science and its minister for innovation. They are back, fortunately, but for many years this government had them on pause.

Of course, if you want to position Australia for 2026, you have to worry about climate change. We've just seen massive storms, three cyclones in a row, hit the US. We've seen a flash drought, a term I'd never even heard used before—air that was so dry and so hot that it sucked the water out of the soil and in a few days created the conditions of long-term drought, and farmers lost their crops: a flash drought. We've had bushfires. We have a total fire ban in New South Wales now, in September. None of these things individually can be sheeted back to climate change, but the increase in their frequency can. You cannot position Australia for 2026 without addressing climate change and the needs of our environment. And that's before you start to talk about the extinction of species, and children who may never get to see some of the species that we take for granted. We must act on that.

We're looking at $65 billion for a tax cut which generates only a one per cent return in 20 years, versus cuts to education and our capacity to compete as workers and as thinkers in the knowledge economy; $65 billion in big business tax cuts for a one per cent growth in GDP over 20 years, against really good quality fibre that would allow our businesses to position themselves and compete in the new technology that is being developed around the world; $65 billion for a one per cent increase in GDP, against serious investment in renewable energy that would allow our businesses to own the patents that will drive down the use of fossil fuel power over the next decade. That is where this government should be going. If this government is serious about positioning Australia for 2026 but the best thing it can do is provide a tax cut of this magnitude for such little gain, then it really should think again.

We have stagnating wages. Wages growth is falling, and real wages fell in the last quarter. We have a government that's happy to see the cutting of penalty rates. We have a government that's actually happy to see the living standards and the spending capacity of middle Australia shrink. I know from my days as a small-business owner—and from talking to small businesses around Western Sydney—that what businesses actually need much more than a tax cut, even though they'll take it if you give it to them, is customers that are spending, and a secure investment environment so that banks and finance institutions will invest in them. That's what they need. They need certainty, investment capacity and customers that are confident, that have money to spend.

When you reduce wages, when you cut the energy supplement from pensioners and when you pick away at the living standards of middle Australia, you actually damage small business. They might get their tax cut, but their profits won't be as high. And I tell you, when you ask any small business—or any big one, for that matter—whether they would rather have investment certainty, consumer confidence or growth in the number of customers, they will go for that. When offered nothing else, they'll take the tax cut. But, when you drive the wages of people down through cutting penalty rates, when you cut away at the safety net in the way this government has and when you ensure that a person graduating from university has a huge debt to pay off in those first early years, you do not drive growth and jobs forward; you actually drive it back. The thing that drives growth in an economy is the capacity for customers to pay, and investment certainty.

We've got a government that lectures people about tax, when they're increasing the tax rate on working Australians. They're actually increasing the tax rate. Through these tax increases, they're taking money out of the pockets of businesses' customers and of families. Any Australian who earns more than $21,000 will pay more in tax if this government gets its way. A worker on $55,000 will pay $275 a year more. If you're on $80,000, it's an extra $400. So, we've got a government that's reducing taxes for the big end of town, for virtually zero gain in the medium term. And, on the other hand, it is cutting the capacity of families and small businesses to do well. It's actually backwards. We know that many of the families that are getting these tax cuts spend all of their money. Give them that money, make sure they keep it, and they will spend it. It will flow through the economy a couple of times and eventually end up in the government's coffers. The plans this government has are completely inverted. We need to make sure, in 2026, that we're actually positioned for the future. This bill drives us backwards.

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

It's very pleasing to hear the member for Parramatta talk about drivers of jobs and growth. It was only a couple of hours ago that we heard some wonderful news from the Australian Bureau of Statistics: the figure for jobs growth in this nation in the last month was 54,200—substantially above what was predicted. All the economic experts predicted an increase of 20,000. We have had 54,200 new jobs created in this economy in the last month. What a vote of confidence by the business community in this coalition government. This is something we should be proud of. We've sometimes seen those ABS statistics vary a little bit. Sometimes they will be a little bit inconsistent. But, for the last several months, we've had continuing very, very strong job growth in this country. Although the headline unemployment rate number has stayed consistent, that is only because we've had a significant increase in the participation rate, up from 65.1 per cent to 65.3 per cent. This is good news. We heard this morning that the dollar has also surged on this news.

The coalition is getting on with the work. We are getting on with driving growth in this economy and we are getting job growth happening. What we must always remember is that the 54,200 new jobs created in this economy over the last month were not created by governments or bureaucrats. They were created by private individuals putting their capital on the line and taking a risk, taking a business risk, taking the risk to put on a new employee. And that is exactly what the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 is about. This bill is about lowering the rate of corporate tax in this nation to incentivise people to continue to take that risk.

Although we can be very satisfied with that rate of job growth in the last month, there is still a lot more work to do. We must make sure our nation is internationally competitive for those in the business community that we ask to go out there and put on new employees. We've got to give them an internationally competitive environment to play in, and we can't do that if we are burdening them with a higher rate of corporate tax than we see in other countries. Peter Costello, the former Treasurer, understood this. The shadow Treasurer, the member for McMahon, used to understand this. He actually wrote an entire book on the subject of the importance of lowering your corporate tax rate to incentivise business investment and get jobs growth happening.

But, sadly, today's Labor Party no longer believe in that. They no longer understand the importance of business having an international competitive playing field to compete on. So they are quite happy to see the corporate tax rate in this country well above OECD averages. They are prepared to see personal rates of tax in this country well above averages. How can we incentivise young Australians to stay in this country with Labor's policy of an almost 50 per cent rate? They want to have a top marginal tax rate of 49.5 per cent. That is the rate that they want against somewhere like Singapore or Hong Kong, with 15 or 17 per cent. That becomes a disincentive.

Dr Chalmers interjecting—

And the so-called tax increase, which I hear the member at the table bellowing about, is to finance the National Disability Insurance Scheme. We owe it to those disabled people—we have to owe it to them. We can all talk up a big game here about how we all support the National Disability Insurance Scheme, but we have to fund it. It would've been wonderful if we could've funded it from a budget surplus. It would've been wonderful if we could've funded it from additional growth. But the reality is: the only way that we can fund the National Disability Insurance Scheme is to ask everyone to contribute a little bit more through their Medicare levy—and we have Labor members coming in here representing that as a tax increase.

The member for Parramatta also went on about renewable energy and how important that is and the uncertainty that's facing it and how there's no investment in renewable energy. That's simply untrue. There's something like $7 billion being invested in renewable energy in this country today. But the problem is that it's being invested in importing containers of solar panels from China and importing foreign-made wind turbines. It is not the investment that we need. The investment in renewables should go into research and development, not into the rollout of the current technology. We have seen from the Australian Energy Market Operator's report that when we most need our electricity, in that time of peak demand, we can only rely on renewables for two per cent of their capacity. So the $7 billion of investment is doing nothing to fix the shortfall of generation capacity in this nation. It is doing nothing to encourage research and development in what we need.

What we really need to do is make sure that the investment is in the best areas of the economy, and the worst people to pick that—the worst people to decide how that should be—are government. We need to release the private sector to put their investment capital on the line, where they think it will do best. They will not always get it right. The majority of Australian businesses after several years, we know, will no longer be trading. But those few businesses that continue to grow and expand are the ones that will drive our economy forward in the future.

The other thing that we need to have international competitiveness on is not only our taxation system but the cost of energy. We've seen the policies of the Labor Party: a 50 per cent renewable energy target that will do nothing but drive up the cost of electricity even more than what it has been in this nation. We have seen the example from South Australia, the state that now has the proud title of having the world's highest electricity costs. It has pursued a policy of a 50 per cent renewable energy target, and what has it delivered? The world's highest electricity costs. How are we going to get business investment and job creation if we go down the track of putting in policies that the Labor Party want that will deliver such high, internationally uncompetitive electricity prices?

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

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