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

I rise to oppose this bill. I'm going to be outright and up-front on it. We know that many smaller businesses have been doing it tough in the current economic climate. We also know that smaller businesses provide approximately half of all employment in Australia. My electorate of Mayo is particularly blessed with small enterprises, with over 99 per cent of businesses being small businesses. Some have very large turnovers, but they are small family enterprises. The Nick Xenophon Team saw the tax relief in the previous bill as a way to give smaller businesses breathing space and to meaningfully encourage employment growth in Australia. These are businesses that have under $50 million annual aggregated turnover, including independent supermarkets, independent service stations, small construction businesses, the FruChocs brand and any other small family businesses and independent shops that you can think of. We acknowledge that they are quite different to the Coles, Woolworths and Bunnings of the world.

This is why we supported company tax cuts for up to $50 million with annual aggregate turnover—up to, but not beyond, $50 million. Remember that this threshold, as I've said, is not about profit. For example, it's not uncommon for an independent supermarket to have a turnover of over $15 million a year, but the owner would only be taking home the merest fraction of that. There are many businesses right throughout our communities that do have very high turnovers, but very low profit margins—service stations, in particular. I'm talking to small, independent service station owners in my electorate. They're often making less than one cent for every litre they sell. They might have a turnover of $12 million or even $18 million, but they only need a couple of people to drive by without paying for petrol and their profits for the day are gone.

The Nick Xenophon Team has a different view about big business. For big business, we are not convinced that tax cuts will translate into the same jobs growth as they will for smaller businesses. GDP growth can be split into growth in returns to capital, or profit growth, and in returns to labour—namely, wage growth. Australia has been experiencing declining wage growth, especially relative to profits growth. The wages share of total factor income has fallen from 54 per cent in March 2016 to 51.5 per cent in March 2017. The profit share of total factor income has increased from 24.2 per cent in March 2016 to 27 per cent in March 2017. Put another way, the returns to employees have been slowing down, whereas the returns to employers have been speeding up. It's hard to get a sense of the dramatic movements just from the numbers but, if you look at graphs, they look like cliffs.

Recent research indicates that there is also a high concentration of market power in many of the sectors in Australia's economy. This means that fewer and fewer large firms are dominating Australian markets. When markets are controlled by a few big firms, the more likely it is that they act in an anticompetitive nature, and that disadvantages consumers. It also means that these firms can simply use their market position to extract higher profits rather than needing to enhance competitiveness by attracting talent or developing their workforce. One classic example is the way in which Coles and Woolworths have used their market dominance to squeeze their supply chains, such as Australian farmers, to increase their profits. And yet, employees of Woolworths, for example, do not appear to have had a real wage rise since 1 January 2015. That's coming up to nearly three years. Although I understand that enterprise bargaining is underway, that is still a long time while all of their bills continue to go up.

In summary, unlike smaller businesses, I am not convinced that company tax cuts to the biggest businesses will result in significantly increased wages or employment. However, I will say the biggest challenge currently facing all businesses that I talk to in Australia is not their tax burden but the burden of the rising costs of energy. I have spoken at length in this parliament about the escalating prices of both electricity and gas, and the constructive steps that the Nick Xenophon Team have taken to address the issue. However, ultimately, the federal government must also act decisively under its own steam to tackle this challenge head-on. I urge the coalition, the government, to set aside their fruitless pursuit of big company tax cuts and focus on what are truly the biggest challenges facing all Australian businesses and end the policy uncertainty on energy. I urge them to do so with speed and haste. Investment in power generation needed to be stimulated years ago. With severe energy shortfalls looming, this can only herald further price spikes. Our time is running out fast.

When I talk with businesses in my electorate, what they tell me is they can't afford 20, 30 or 40 per cent increases in their electricity. They want to be able to put on young people; they want to be able to grow their businesses. They don't talk to me about needing to get a further company tax deduction. Those that are under the $50 million threshold are the true businesses that we should be supporting with a different tax regime. I say to the government: we have many, many things to work on in this parliament other than this endless pursuit to try to give the biggest businesses in our country, as well as the big four banks, even more money.

Madeleine King (Brand, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017. At a time when wages growth has flatlined to a record low of 1.9 per cent, when living standards, which had been climbing, went backwards in the last quarter and when Australian families are facing the harsh reality of rising living costs and rising electricity prices, this government is preaching to the Australian people about the need for budget repair. At a time when people are trying to make ends meet when faced with record high unemployment and underemployment, when hardworking people have been slammed with penalty rate cuts—with nearly 10,000 workers in my electorate of Brand alone feeling the hurt in their wages—and when average income earners are facing tax hikes while millionaires will pay less tax, this government has plucked an arbitrary $65 billion from thin air for the benefit of the big end of town.

Yes, that's right, there will be $65 billion in corporate tax cuts, while everyday Australians are lectured on the need for budget repair. It took a little while for this government to tell us what the tax cuts were going to be and what they were going to cost. It started at $24 billion. It went up to $26 billion and then to $50 billion, and later on in question time it went back down again to $36.5 billion. Eventually, the Treasurer settled on the reply that these tax cuts would cost the economy and the budget $65.4 billion.

You couldn't make this confusion up. It is staggering, but this $65 billion in corporate tax cuts that would be the result of the full plan would have an extremely minimal economic benefit—let alone the parts that the government managed to get through. By 'extremely minimal', I mean economic growth of one per cent in 20 years time and an increase in wages of $2 a day in nearly 20 years time. At the same time, they've failed to protect penalty rates for the lowest-paid workers among us—as I said earlier, those 10,000 workers in Brand across hospitality, retail and pharmacy services.

Labor will not be supporting this; Labor, of course, cannot support this. When reflecting on this and on all those cuts to the programs and services that the government have made, I cannot help but think about what could have been done with that $65 billion. All those cuts have been made so that the government can give a $65 billion corporate tax cut to big business. I think about the everyday people who are carrying an additional burden as they do their best to get by—hardworking people; students; parents with kids at school, TAFE or university; older Australians and people living with disability.

This government has seen fit to cut funding to schools, TAFE, vocational education and apprenticeships. More than $600 million has been cut from TAFE and vocational education in this year's budget, and that is on top of the almost $3 billion in cuts to TAFE skills and training, and the loss of more than 130,000 apprenticeships since 2013. This government has no problem in taking $22 billion from school funding. Not a dollar difference, they said in 2013, scrambling to match Labor's game-changing needs-based funding of our education system. It turns out it was quite a lot of dollars' difference—it ended up being $22 billion difference in 2017. A third of this tax cut for corporates would have paid for over 22,000 new teachers, and, obviously, countless other resources for schools.

When it comes to higher education, this government is eyeing up the university sector as another cash-grab opportunity. After years of their inaction, a policy vacuum was created for our great universities—our third-highest export industry in Western Australia. And after their disastrous attempt to deregulate university fees and introduce potentially $100,000 degrees and after this sabbatical and higher-ed policy, the brains trust comes back with a new plan—cutting university grants, which means less investment in research, in student support services and fewer courses on offer. This government is increasing student fees by 7.5 per cent, which in anyone's language is a barrier to young people wanting to pursue higher education. Or rather, it's a barrier to those students who do not have the capacity, or their families do not have the capacity, to take on this additional cost and this additional debt.

Where do the fees go from this extra 7.5 per cent? Does it go to new infrastructure in universities? Does it go to improving ageing infrastructure? Does it go to supporting the universities themselves to employ more lecturers, to help innovate teaching programs, to undertake research, which they are required to do and which they love to do? Does it have any of these things? No. No, this money does not go to the universities; it goes straight to pay for these tax cuts to corporates.

Our university students already pay the sixth-highest fees in the OECD, and we're adding to that. We're adding increased fees and new fees to students undertaking enabling courses. We're charging for enabling courses. These are courses where students have to go—and many students in my electorate go—to be able to obtain entrance into university because they may have a low ATAR score or did not complete high school at all. These enabling courses are generally shorter, and they help people, who are often the first in their family to be able to go to university, get into uni. Murdoch University—which is not in my electorate, but in the member for Tangney's electorate—has the OnTrack program. In 2016, there were 296 students from the region who took advantage of this program; this year, there are 453. Instead of keeping these courses as they are and not charging for them, this government is going to add them to the HECS regime. It just increases debt for young people who can't afford it. When I took this matter up with the minister for education—and, sadly, we've been talking about it through the press and not directly—he said there is no up-front costs for enabling courses, and that is right. It goes to a student's debt. He said:

There's no upfront cost for enabling courses and those students will be treated exactly the same as their peers doing other courses at university where the student loan program applies.

Except, these enabling courses are not the same, are they? They don't get you a qualification. They're much shorter and they're not the equivalent of a bachelor degree or a post-graduate degree. It's disingenuous of the minister for education to assert to people in my community that they might be.

These charges drive students away. They simply rack up the debt for those in our community least able to afford it, and those in our community we want to encourage to go into university, to take that plunge, to be the first in their family to attend a university to improve their lot for their future and the future of their children and their families. That's what that money's going to pay for—the corporate tax cuts—instead of helping more people get into university and get a better education.

As I said, our university students pay the sixth-highest fees in the OECD. Our government is pushing us further up that list. I guess it depends on your perspective, but perhaps you can congratulate yourself for limiting the access to university for those who can't afford it.

The education minister also mentioned the 'rivers of gold' that he somehow thinks universities live off. Once again—and I've mentioned it before in this place—it's an absolute farce that this government does not understand the essential cross-subsidy that is created in our higher education system. I wish it wasn't the case, but it is the case and has been the case for a long time. To expect or think that increasing student fees and having access to student fees after the places were deregulated meant universities had more cash in their bucket—some 'rivers of gold'—is entirely incorrect. It's untrue. It's no wonder the university sector is upset that it has a minister for education that fails to understand how the university sector actually operates.

The other thing the government is doing in trying to pay for this corporate tax cut is locking out the children of migrants who we have invited to live in this country. Changing arrangements so that only full-fee-paying university places are now offered to New Zealanders and migrants caught up in the government's punitive citizenship changes is not fair. It's not fair on the families who have made the decision to call Australia home, who've come here for a good and better life, and now find they can't afford to pay for their children's education. While pushing ahead with the $65 billion in corporate tax cuts that will be ineffectual at best, the government is throwing away good money for little or return.

We know it has wasted $122 million on a non-binding community postal survey to gauge people's opinions on how other consenting adults get treated by our laws. It's unfair; it's not right. I find it absurd and I find it abhorrent that our government has sanctioned this judgement-casting exercise instead of getting on and doing its job.

Honourable Member:

An honourable member interjecting—

Madeleine King (Brand, Australian Labor Party) Share this | Link to this | Hansard source

That's right—its job is changing the law, as it does and as we do, in this place every day. That $122 million could have been put towards having 1,900 new teachers in our schools or helping to educate our children. We could have trained 4½ thousand new nurses to care for the sick, the unwell and the aged. It could have provided 2,000 new beds to help address homelessness. Imagine what could be done if $65 billion could be found to address educational, health or societal needs.

The Prime Minister has also wasted the opportunity to connect this country with a first-rate NBN. Instead, he purchased, with taxpayers' money, more than 15,000 kilometres of copper—15 million metres of copper—for his second-rate, inferior and frustrating NBN. Today I invited the Prime Minister to come and visit Baldivis and its abysmal NBN and mobile reception communications black hole that he's formed. I perhaps said it in the wrong venue, which was question time. I'll be writing to him. I paid the price for that invitation and I got booted out, and that's fair enough. Nonetheless, I do urge him to visit and to speak to the people of Baldivis—and he can witness firsthand the kind of anger and frustration that I get to witness from people who are utterly confused and bamboozled and, quite frankly, angry about the money he's wasting on what is an outdated National Broadband Network before it's even been implemented.

So we're introducing more copper in a digital age. One might ask: what next? What next will this government attack or waste its money on so that it can fund a corporate tax cut? Well, how about we cut the bereavement allowance for the elderly—generally, the elderly? It's a short-term payment to help people meet the costs of bereavement and adjusting to becoming single. It's usually paid to a member of a longstanding elderly couple who has lost a loved one. It's not a great saving. It's a great amount of money for the people affected as they have to adjust very quickly to a single life. A single life is quite different from a life as a couple. It's even more different, again, when you have spent a long time with the same person and you find yourself in that situation. So, while you introduce a $65 billion corporate tax cut, you'll take a bereavement allowance away from those depending on a social safety net. It begs the question: what are the priorities of this government? Well, I guess we know.

Further from home, I'll talk briefly about foreign aid. The Prime Minister now holds the dubious honour of being responsible for the lowest level of aid spending as a share of gross national income in 60 years. By slashing our foreign aid budget—by cutting programs that alleviate pain and poverty for the world's poorest and that improve their health and therefore improve the health of Australians—the Prime Minister can hold his head high, should he so choose, that we are now 17th out of 28 countries in the OECD's aid rankings.

So all this pain; these cuts to wages, programs and services, the income tax rises, are for what? Are they really the government's answer to flat wages growth, and triggers to drive investment? They may be this government's misguided answer, but experience tells us another story. Only a few years ago, we had the biggest investment boom Australia has seen, with a headline corporate tax rate of 30 per cent. Assistant Governor of the Reserve Bank, Luci Ellis, has nullified the argument that you need this tax cut to drive investment. She has said:

When businesses make decisions about where to locate—the tax rate does presumably matter, but so does the business environment, the institutional framework, the rule of law, the macro-economic outlook and where the resources are.

There's a broader business environment to consider and those advantages haven't gone away.

Ms Ellis is right, those advantages have not gone away in Australia, and a corporate tax cut would do nothing, or at least very little, to improve business circumstances in Australia.

As I've said before, budgets are all about priorities. It's crystal clear that this government's priorities are at odds with what is just and fair and right. This government could not be more clear on where it stands, as it works to achieve big-business cuts, as high-income earners get a tax cut, as workers earning above $21,000 per annum get increased taxes, and as penalty rates are cut. Unlike this government, we in Labor have priorities which ensure that we deal with inequality in this country. This means funding our schools, and investing in infrastructure that will develop the jobs needed to keep people working in the future. This means a fairer tax system, levelling the playing field for first home buyers through reforms to negative gearing and capital gains tax. And, as announced recently, our plan to impose a minimum 30 per cent tax on discretionary trusts to deal with the issue of income splitting is dealing with something that has been in the too-hard basket for far too long.

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to talk about the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017. Labor obviously will not be supporting this bill. We have been very clear about our reasons why, but I'm very pleased to have the opportunity to articulate those further, and to perhaps give a bit of an indication from a northern Australian perspective as to why this massive cut in the corporate tax revenue for our country is not a good idea. At a time when some of our lowest-paid workers are receiving a $60 billion pay cut, it's disgusting and out of touch for the government to at the same time give their mates in big business a tax cut.

Since this has been bill introduced, we on this side of the House have been very clear on where we stand—and that is, that the cost is high and the benefits are minimal. By the government's own admission, one per cent of economic growth in 20 years time is not a significant amount of growth. I think those opposite would have to agree that it's simply not a significant amount of growth, particularly considering the massive amount of revenue our country will forgo if this bill is enacted. A $2-a-day increase in wages in 20 years time is about as exciting for an Australian worker as 50c extra in their pocket. That is as a result of this new energy policy that we've been hearing about over the last 24 hours, not that we've got much detail on it, but I think any reasonable person on the opposite side would agree that it's not significant. And not that we know that it's absolutely going to happen, because there's no modelling to say how they've derived that there will be that very, very small decrease in power bills. I was glad to see Senator Dastyari today using hamburgers and soft serve ice creams to illustrate what a month of savings looks like.

Mr Tim Wilson interjecting—

This government's energy plan actually looks like a cheap stunt. Thank you, member for Goldstein, for articulating what we all know to be true about this energy compromise with the member for Warringah.

Mr Tim Wilson interjecting—

But it must be confusing. For any observer in politics at the moment, member for Goldstein, it would be hard not to come to that conclusion. It must be a bit difficult when you've got two prime ministers running your agenda. I think what Senator Dastyari was pointing out is that, if it is true, this saving to energy bills—which is perhaps going to happen after 2020—is not significant. I digress slightly.

Government members interjecting—

It is like one per cent economic growth in 20 years time. So when my children, who are 3½ and five, are out there and hope to buy their own house, they might see a $2-a-day increase, because the opposite side of politics want to give a massive corporate tax cut to their mates. So it's tiny. It's a supposed wage growth. This is at a time when we've seen a total flatline of wages growth. We're seeing falling living standards and a huge pay cut through the penalty rates decision that this government has really encouraged. It has really encouraged the Fair Work Commission to cut the wages of low-paid workers. Obviously, it is a disgrace.

A little while ago, I spent some time with a young constituent of mine, Amber, who was expecting her and her partner's first child. Her take-home pay is going to be significantly reduced at a time when she has become a new mum and she's going to need every dollar in the household. She said that working on Sundays was worth it because she would actually be able to make ends meet, pay the rent, put fuel in the car and buy groceries. She recently had her first child. When I caught up with her recently, she was obviously thankful that there was a maternity leave system. What those opposite probably fail to realise—because they're becoming a bit out of touch, spending so much time with people who don't have to worry about paying the bills—is that people really struggle. So the priorities of those opposite are a bit mixed up.

We can't really see what the government is doing to help address the factors that have a huge impact on working Australians, so the priority is for a tax cut for their mates, but, at the same time, they're encouraging the cutting of penalty rates for working families. So it's not only not fair; it's not smart. We all know that, with that minute increase in 20 years time in a take-home wage or in the growth of the economy—which is, as all reasonable people would have to agree, minute—you've got fewer people in society with money in their pocket to put back into the economy. So it doesn't really make a lot of sense. And the government is looking at raising income taxes on all taxpayers with incomes above $21,000. That's just dumb. It's absolutely pathetic. The government's response to flatlining wage growth and falling living standards is to give a pay cut to working families and increase income tax. These are people who have low disposable incomes and spend the majority of their wages in the economy.

Those on the other side of the House will say that lower corporate tax rates are needed to attract investment, but all credible studies show that a lower tax rate is one of many features of the tax system that influence corporate behaviour. An example of another factor that influences corporate behaviour is government investment in infrastructure. The revenue we're foregoing with this corporate tax cut—

A division having been called in the House of Representatives—

Sitting suspended from 16:40 to 16:56

As I was saying, all credible studies show that a lower tax rate is one of many features of the tax system that influence corporate behaviour, but investment in infrastructure would be a massive incentive to improve our attractiveness as a destination for capital for investment. I think this government are just making things up when they say that the massive cuts—$65 billion worth—to corporate entities, much of which will go offshore, will result in more investment. By their own admission, there will only be a very, very small increase in take-home pay after 20 years. All these cuts do is show that the government's priorities are completely out of whack. Let's look at what they're doing at the moment.

They're pursuing cuts for the top end of town through their corporate tax cuts and tax cuts for high-income earners. They are pursuing higher taxes from workers and those workers will see their take-home pay slashed. They have also shown that they have completely given up on northern Australia by decimating the NT-based Public Service and disadvantaging people who already pay a premium on goods and services due to our location. So the cost of living up in the north is high. We were all hopeful that there would be some of that investment that I just alluded to. Much fanfare was made about the Northern Australia Infrastructure Facility. Two years after that scheme was announced, there still has not been one dollar provided in concessional loans to proponents who want to use the enormous potential of the north to drive productivity and drive exports, which will be good for our country.

Even though we only have five per cent of the population across the north, we supply a massive amount of exports, and that adds value and wealth to our country. We could do a lot more if we had some assistance in terms of investment in infrastructure. To date, we haven't seen much at all and the chambers of commerce across the north were here last night at an event, and it is clear that they want to see a lot more than words. They want to see some action. They want to see some dollars hitting the ground in northern Australia for the good of the country, for the good of their members, obviously, and also for the good of the community. We want to drive jobs and we want to drive sustainable population growth across the north. At the moment, we have not seen one dollar out of that $5 billion infrastructure facility.

On our side, we have our own priorities. We've heard a little bit about the priorities of those opposite and how misguided they are. I'm sure they know exactly what they're doing in terms of helping out their mates in big-business land with lower corporate tax rates, even if much of that is going offshore. Our priorities are supporting Australian workers in trying to drive their ability to have self-determination in their lives—not to be a drain through the welfare system but to be able to work, receive a fair day's pay for a fair day's work and support their families, like Amber and her young family that I mentioned earlier—because that's good for our country. When people are working, are happy, are supporting their families and are showing their kids a better life than they had, that is good for our nation.

At the same time as these corporate tax cuts are being given out by the current Turnbull government, there's also a decimation of funding for public schools in my electorate, like Anula Primary School. But, at the same time, private schools in big, southern capitals are getting exponentially more funding from this government. Now, that is obviously not fair, but, again, it is also not smart. We know that we need to properly invest in our kids, with a great public education system and a great private education system, and we're committed to doing that. We're committed to helping families meet their cost of living, which makes life pretty tough.

We also need to do another couple of things, and I'll cover them quickly. We need to stop people accruing millions in tax write-offs, by capping the amount people can claim in accounting expenses. Again, it's not fair that the top end of town can work the system. The extra wealth that they get—good for them. I'm happy for them to be wealthy, but not at the expense of, for example, our public education system. This tax cut was not funded. There was no plan whatsoever to actually pay for this corporate tax cut. So, again, it's largesse; it's helping their mates in the top end of town at the expense of everyday Australians. That is what is not acceptable about this and why we do not support these corporate tax cuts.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Like the member for Solomon, I will be speaking against the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017. I wholeheartedly support the amendments moved by the member for McMahon, because the Abbott-Turnbull government has fundamentally failed to deliver any economic leadership. These changes were first flagged in last year's budget and again in this year's budget, when the Treasurer reintroduced them into parliament straightaway. So here we are, in mid-October, with the government finally bringing the bill on for a debate. So much for the importance of Prime Minister Turnbull's apparent jobs and growth agenda. A hollow slogan for a hollow man.

Before I go further, I want to deal with one of the major furphies that the Turnbull government is propagating in this debate: the claim that other countries have lower corporate tax rates and that Australia's tax rates are comparatively high—a mantra regularly spouted by the neo-cons on the other side, or the backbenchers who know no better. Sadly, too many of those opposite have drunk the top end of town's Kool-Aid for way too long—they're a little bit confused. Australia has a rate of 27.5 per cent for small and medium businesses—that is, those with turnovers of up to $10 million—and 30 per cent for other big businesses. It's important to remember that a phase down to 25 per cent is already legislated over the next 10 years for companies that have up to $50 million in turnover. The Turnbull government's argument is that tax cuts are required because Australia's corporate tax rate is too high.

Let's put this to the test. Let's have a look at an analysis of this claim. We'll do our own little fact check. The US Congressional Budget Office, a non-partisan budget outfit similar to the Australian parliament's Parliamentary Budget Office, published a paper earlier this year saying that the statutory corporate tax rate is only one of the many features of a corporate tax system that influence investor behaviour. The US Congressional Budget Office paper outlined that average and effective corporate tax rates are better indicators of incentives for corporate investment than the headline rate. On the statutory corporate tax rate, Australia's 30 per cent tax rate ranks as 10th. On the average corporate tax rate, Australia rates 15th, the fourth-lowest in the G20. On the effective corporate tax rate, we're ranked 11th.

On the statutory corporate tax rate, we're 10th, which is competitive with most of the G20 nations, but when you look at the average we're ranked 15th, and on the effective we're ranked 11th. This means that our average and effective corporate tax rates are average or below average when compared with the other G20 countries. That is a relevant comparison because, obviously, the G20 countries make up the world's 20 largest economies.

Don't forget, Mr Deputy Speaker Howarth, as many do on the opposite side, that we have dividend imputation, which means that we essentially refund our corporate tax to our domestic investors, something which is quite unique around the world and often gets lost in this debate. If we're going to compare our tax rate internationally, let's have a proper debate. Let's compare our corporate tax rates on a proper basis—on average and effective rates—with our competitors around the world. When the Turnbull government tells you that Australia's corporate tax rate is uncompetitive, remember the facts; that is not the case.

It is certainly true that Paul Keating took the approach of lowering the tax rates. However, he only did that by broadening the base. The tax changes were funded in another way. Despite the stern opposition of the Liberal and National parties of the day, Mr Keating, as Treasurer and Prime Minister, brought in lasting reforms, including capital gains tax, fringe benefits tax and an assets test. He made difficult decisions and then had to retail them to the Australian public to ensure that the Australian tax base was broader. What does that mean? It means that our social safety net is better able to target and help most Australians. Labor tax policies always have fairness at their core, not greed. Sadly, those opposite have fallen for the misinformation being peddled from the top end of town.

What has the Labor Party done from opposition? Under the member for McMahon, we've seen some tough decisions, such as those about negative gearing, trusts and deductions for managing tax affairs. Labor and the opposition leader Bill Shorten understand that it is only through proper base broadening that you earn the right to have conversations about expenditure or lower company tax rates. The Abbott-Turnbull government has not earned that right. Here we are in their fifth year of government. The coalition has been unable to make any tough decisions on fiscal policy in Australia, so Labor will oppose this part of the government's $65.4 billion tax cut for big business. We've always opposed such significant structural deteriorations to the budget over the medium term that do nothing to broaden the tax base. In the current fiscal and economic climate, it is not appropriate.

The Labor Party has been clear in highlighting the minimal economic benefits of these business tax cuts. We're heading for one per cent growth in 20 years time—perhaps. This has come at a time when wages growth is stagnant—and, for some people, it is going backwards—and the effective tax rate for some members of society, especially the lower wage earners, is going backwards. At the same time, corporate profits for CEOs are soaring. This huge hit to the budget shows the rank hypocrisy of a government that lectures the Australian people about the need for budget repair.

I remember when those in the government used to talk about a debt and deficit disaster and a budget emergency. I think there was a truck circling Parliament House; there was a truck circling the country. Yet, on the Liberal and National Party's watch, what has happened?

Mr Dick interjecting—

Has the deficit blown out? It has blown out—and I'll take that interjection from my neighbour, the member for Oxley. The deficit has blown out. Debt has crashed past the half a trillion dollar mark—a nightmare for our grandchildren and their children. And who will bear the brunt of this tax cut for big businesses that those opposite are championing? Everyday working families will, through income tax increases.

The independent Parliamentary Budget Office put out a report a few months ago stating:

Personal income tax receipts are projected by the PBO to increase by 1.6 per cent of GDP over the medium term, from 11.1 per cent of GDP in 2016-17 to 12.6 per cent of GDP in 2027-28 (Figure 1). Once the tax 'cap' is reached, personal income tax receipts are projected by the PBO to continue to rise as a per cent of GDP as company tax receipts decline from 2023-24 as a result of the Government's Enterprise Tax Plan. The PBO projects that the average tax rate on personal income will rise from 22.7 per cent in 2016-17 to 25.9 per cent in 2027-28.

In 2023-24—not that far away—people in my electorate of Moreton, in the member for Oxley's electorate and in the whip's electorate will see personal income tax at 12.4 per cent of GDP, while company tax will be at 4.5 per cent of GDP. By 2027-28, personal income tax will be 12.6 per cent of GDP, while company tax will have gone down to 4.2 per cent of GDP. Under the harbourside mansion tax plan, the Australian worker will have to do even more heavy lifting, from 12.4 per cent to 12.6 per cent of GDP, while the CEO battlers—those battlers at the top end of town—what will they be doing for Australian society? Their tax rate will be going down, from 4.5 per cent to 4.2 per cent of GDP. From 2023-24 through to 2027-28, when the company tax rate is supposed to decrease to 25 per cent for all companies, personal income tax will rise by 0.2 per cent of GDP at the same time as company tax decreases by 0.3 percentage points. It's clear that low- and middle-income Australians are paying for the government's $65-billion handout to big business through rising personal income taxes.

What does this mean for the mums and dads and the working young? It means that the chefs from Sunnybank are going to be doing more. It means that the motor mechanics from Moorooka will have to do more. It means that the rockmelon stackers from Rocklea will have to do more. Low- and middle-income Australians will have to do more while CEOs pay less. Earlier this month, this was again confirmed by the PBO—an independent body, trusted by both sides of parliament, set up by Peter Costello—when it said:

In addition to the effect of nominal income growth, average tax rates are projected to increase due to policy changes, most notably the policy decision to increase the Medicare Levy from 2019-20.

Australian workers and their families are facing a cruel and nasty cocktail of stalled wage growth, record unemployment, n increased costs of living and rising electricity prices, all on the Abbott-Turnbull government's watch. And all the government has to offer is the Prime Minister telling us this week that power bills might—might!—fall by 50 cents per week in three years time. We've got a climate of fear and uncertainty. We know that fear and uncertainty in the market are infectious and spreading, and what does the government offer us? 50 cents.

Inequality in this country is getting worse. That is a fact. And yet the Liberal Party and the National Party are still pushing the failed trickle-down economics of tax cuts for big business and the wealthy few, which more and more economists are saying does not work. It is not good for growth. Read Wayne Swan's book on this topic if you need to understand it more.

Mr Rick Wilson interjecting—

Real wages for the top 10 per cent of income earners have grown by 72 per cent over the last four decades, more than three times the rate of increase in real wages for the bottom 10 per cent of income earners. I hear the member for O'Connor laughing opposite. You know where this is felt most? In the bush. In the middle of Perth it might be a different experience, but in the bush it's particularly exacerbated. The latest GDP figures show that 51.5 per cent of income went to employees. This is the lowest percentage since September 1964. Over the past four years, labour productivity has risen by nearly six per cent. Normally, if labour productivity is on the increase, what happens? Normally, wages go up. But we've seen real wages actually fall by 0.6 per cent, and the wealth gap continues to widen.

In 2014, households in the top 20 per cent owned 62 per cent of the wealth, while the bottom 20 per cent owned less than one per cent. Home ownership rates are at a six-decade low. This week, National Anti-Poverty Week, we've heard from the Australian Council of Social Services that they estimate over three million Australians are living in poverty. Governments are all about choices. Their policies can either fight inequality or entrench inequality. The Turnbull government is entrenching inequality.

Election results have consequences and, so far, since the coalition came to office, they have proposed slowing the rate of pension increases, cutting the income support bonus, removing consumer protections from financial advice and giving a tax cut to people who already enjoy million-dollar incomes. They've launched a relentless attack on working people. We've seen wage growth stall. We've seen penalty rates slashed on their watch. We've seen them impose tax increases on the bottom 80 per cent of the workforce. They've attacked unions and workplaces by launching a politically motivated royal commission. They've established the ABCC and the Registered Organisations Commission. We know that unions are the scapegoat—but I'm going to say the 'escape goat'. It's what they go to when they want to sacrifice something to their neoconservative volcanoes. These measures are all about shifting the balance of power in workplace relations, allowing unscrupulous employers to engage in practices that avoid fair work obligations, such as sham contracts and dodgy labour-hire companies. Enterprise bargaining agreements, when they have ended, are becoming bargaining weapons, like we're seeing with the Streets Ice Cream workers at the moment. Inequality is about fairness, and this Turnbull government is unfair. They're entrenching inequality in this country and we deserve better.

The Turnbull government could use its power to fight inequality. Budgets are all about priorities, and this government, quite simply, has them wrong. The 'harbour-side mansion' budgets have delivered big-business tax cuts and high-income earners getting a tax cut. Workers above $21,000 are getting increased taxes and penalty rates are being cut. The Turnbull government's priority will always be to look after the top end of town: the big corporations, the conglomerates, the millionaires and the billionaires. There is no other way to interpret a budget that is so fundamentally unfair to ordinary working Australians.

Labor understands that inequality is an impediment to economic progress and community happiness. We have our priorities, ensuring that we deal with inequality in this country. Obviously, this means properly funding our schools. This means proper investments in infrastructure. This means a fairer tax system and further dealing with superannuation tax concessions. It means levelling the playing field for first-home buyers and capping the deductions people can obtain for managing their tax affairs. And it involves our plan to impose a 30 per cent tax on discretionary trusts. Dealing with inequality means providing more affordable housing so Australians can live close to where they work. To tackle inequality, this country needs a brave government. It needs a country with a brave heart, not a small heart.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I, like my colleagues, rise to speak in this debate of the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017. Just in case I don't get to it, I should declare from the outset that we will oppose this bill. We will do this on the basis that this bill stands as a savage attack by this government on Australian families and their households.

I've spoken on many occasions about my electorate. My electorate is the most multicultural electorate in the country. It's very colourful, very diverse and one that lives in harmony. I have the lion's share of refugees coming into the country. I get to see their aims and their dreams for their families, particularly their children. By the way, that's why education is so significant in my community. But my community is not a rich community. It has many, many social challenges. Issues of housing are certainly impacting on my community. The average household income in my community is under $60,000 a year. So, as I say, it is not a rich community. I believe that what the government proposes in this piece of legislation is only going to exacerbate the emerging inequities that we are seeing in our communities. And that's not just my community. I think if you took a broad snapshot of all those represented in this place, they would find that they, too, are presiding over an emerging position where, regrettably, we are moving to increase the level of inequity applying in our communities. We're told this is all about budget repair. Clearly, budgets need to be addressed, and my friend—what's your seat, Graham?

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Moreton.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

My friend from Moreton has spoken about what we heard a lot about leading up to the last election—a debt-and-deficit disaster. He spoke about the issue about budget emergency—a deficit that we see has not only blown out but the debt has crashed now past the half a trillion dollar mark under this government's watch. You can't make an argument for the Australian people, get a mandate to be in government—even though it's by one seat—on the basis that you're going to do something about addressing the budget emergency or this debt-and-deficit disaster. The thing that you want, most of all, in coming to government, is to give big business, multinational companies—including the four big banks that probably should be subject to a royal commission, given the fact that they presided over 50,000-odd instances of money laundering in the case of one bank alone—a $65 billion tax reduction.

From my perspective, I think this is going to lead to a structural deterioration in the budget over the medium-term. Certainly you've got to think about how, not in a plain economic sense, this is now being received in local communities—communities that, like mine, aren't rich; communities that do need family assistance; communities that do, regrettably, have high levels of unemployment; and communities that are trying to get their head above water, trying to use the TAFE or the education system to facilitate their job readiness. All those things have been impacted by this government's recent budget, and yet this is all being set aside, effectively, for a $65 billion tax break for big business.

When this was being prosecuted—and Madam Deputy Speaker, you'll recall the shenanigans that occur from time to time in question time—and you think about the questions that were asked in the lead-up to: 'How much is the government's giveaway to big business going to cost?', one answer that was given was $24 million. Another answer that was given—I think by the Prime Minister—was $26 billion. We got to $50 billion. Then it was back to $36.5 billion. Ultimately, the Treasurer had to concede that the real cost over the medium-term of the tax cut for big business would be $65.4 billion. I think we were a little surprised about that. And, no doubt, our colleagues on the other side of the House were probably similarly concerned because they probably didn't know what they were signing up to when they made all these grandiose plans at the last election. Similarly, colleagues from the other side used to tell me they didn't know what they were signing up to when John Howard brought Work Choices in—a piece of legislation that made it legal for the very first time in this country to pay workers below the award rate of pay. And colleagues from the other side thought that it was just the Labor team acting up and protecting trade unions, and they never believed what we were saying until the legislation was enacted. John Howard, the then-Prime Minister, had control of both the House and the Senate, and enacted the legislation.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Because of Barnaby Joyce.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

Yes—and what they did, at a corporation level, was start to pay people below the award rates of pay. Not that we want to digress into a political history of this, but when Labor came to power in 2007 it wasn't just the traditional Labor voters that rallied behind Labor. Let me tell you, when I did railway stations, as everyone does, and street meetings, it wasn't only the mums and dads but the grandparents coming along and saying, 'We never thought this would happen.' It was their fear at what was being delivered, or what was going to be imposed upon their children and their grandchildren, which certainly corralled people to think that the only people who were going to stand up for them and for their future was a future Labor government. I'm not trying to give a lesson on this, but maybe it's food for thought for those on the other side. Perhaps you should think about what a $65 billion tax cut for big business really does mean when you want to put it in terms of who is going to pay for it. What about the families? What's going to be the respective position? What services are you going to cut? This is all based on the assumption that there's trickle-down economics—if we give big business a tax cut, that will flow off to their workers. I don't know about you, Madam Deputy Speaker, but I don't really subscribe to the 'pigs might fly' concept.

I know many of my colleagues were at a seminar early this morning by Catholic Social Services Australia. There was a launch of a new publication entitled, An economy that works for all. The introduction was delivered by someone whom I think we all know very well—Father Frank Brennan, who is the CEO of Catholic Social Services. This publication is part of the Catholic Social Justice Series. Regrettably, I haven't read it all yet. But there were a few things I was able to pick out, only because it dealt with trickle-down economics, of all things. It cites from the 2007 social justice statement entitled, Everyone's business: Developing an inclusive and sustainable economy. That was a paper by the Australian Catholic bishops. It focuses on not only the distribution of wealth but its creation and how it is used. It's all about issues of social inclusion and ensuring that people's positions aren't being exacerbated by the way we distribute wealth in our economy. In that, the Australian bishops agreed with the remarks of Pope Francis when he said this: 'Trickle-down theories, which assume the economic growth encouraged by a free market will invariably succeed in bringing about greater justice and inclusion in the world, have not been proved.' I think that's the argument we've been trying to make for some time. This theory that big business, by a tax reduction, are going to turn that into higher wages for their people and are going to distribute the wealth throughout their workforce is, as I say, up there with the theory that pigs might fly.

Hopefully, most people will see that this is certainly a misplaced priority by this government. Simply hoping in the belief that, for instance, the big four banks are going to see the error of their ways and just pass this onto their account holders—it's not something that shows us as being of sound mind when we're considering the general application for economics in this country.

The whole basis of the government's position is: multinational companies—big business—pay too much tax, people earning under $87,000 don't pay enough tax and, besides that, people who work on Sundays and public holidays get paid too much. You can't have it all ways. You can't then decide that the remedy for our economy is: put it in the hands of big business and give them the tax cuts in the blind belief that they're going to actually distribute wealth to shareholders, workers and bank account customers. It's certainly taking a lot of it on trust. I would have thought that many on the other side of the House probably winced when they actually heard the real figures that have now been confirmed by the Treasurer—as being a $65 billion cut. That is what the cut is really going to cost the economy.

Let me put this in some perspective. We've had a big argument, as you'll no doubt recall, Madam Deputy Speaker, about the amount of cuts occurring to schools—$17 billion. There are cuts to universities of $3.8 billion. There are cuts to TAFE and vocational education of $657 million. These cuts have all been made to help sustain this tax cut for big business. But, when you add to that the cuts that have occurred in respect of family payments and age pensioners and the government making it more difficult for people to get the disability support pension, you can see that those at the lower end of the spectrum, the most vulnerable in our community, have been singled out to do the heavy lifting for this tax cut.

This is all in the guise of budget repair. That is how the government is backing it in. This is not the right course that we should be adopting. It's certainly not what you would think the priority should be for this government. We know we've got issues that we need to address, but taking money off schools—$17 billion—and taking money out of universities? The best thing we can possibly do is invest in our future. The future is our children. They are going to go on to run this place and look after us and everything else in the process. The future starts with a good education. We have moved aside from that and said, 'We need to make cuts there.' That's not terribly businesslike. These are direct cuts that are going to impact on our future—our economic future, our competitiveness in the world, as a producer, and what we need to do as part of the emerging smart economy. We have moved to cut in that direction. It just shows that this government's priorities are all wrong.

What do we really aim to get out of this staggering thing? I'm sure this got raised in the party room somewhere along the line. There is minimal growth opportunity for us through these tax cuts to big business. In fact, it is one per cent over 20 years. Would you believe that that equates to about a $2 a day increase in wages in 20 years time? Therefore this is not something that's going to net a huge change in corporate behaviour. It's not going to net a change in the way corporations do business. And yet this government has bet the farm on this notion of trickle-down economics. We expect more from those who occupy the government benches. They need to ensure that a sustainable approach is taken when we address the long-term aspects of budgets. I take you back to what Pope Francis said—that trickle-down theories in economics have not been proven. We have taken on something which just does not seem to make sense. It certainly doesn't apply in any other economic area. This government has bet the farm on this, and it is certainly not in a position where any credible economist will come out and say it has done the right thing. (Time expired)

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

I endorse the comments of all my colleagues who have spoken in respect of the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 thus far. Just as I was about to walk into the chamber to speak on this matter, I came across—sitting on the top of a pile of my papers—an article that was published earlier this year. I want to quote it, because it is so relevant to what we are speaking about. It is an article written by an economics correspondent, Eryk Bagshaw, on 28 February this year:

Company profits have surged to record highs at the same time wages suffered their sharpest decline in eight years, new figures show, as the Turnbull government prepares to argue the case on Tuesday for a $50 billion company tax cut.

The three months to December 2016 saw a 20 per cent jump in profits, while wages fell 0.5 per cent - the largest decline since mid-2009, according to the Australian Bureau of Statistics Wage Price Index. Over the course of 2016, company profits rose 26 per cent.

The opening statement of that commentary sums up what this is all about and why it is so wrong. The $50 billion figure that was used in the article at the time has since changed, because of the government's budget measures in 2017, but the principle and the essence of what was being said remains true.

We have a situation where company profits are at record highs. Wages have literally stagnated, and yet the government is saying the companies need to be given a tax break. It simply doesn't make sense. And no rational person out there in the community will buy the government's argument that these tax cuts are necessary to stimulate the economy. It won't work because—as the member for Fowler has just made clear—trickle-down economics has proven to be an absolute nonsense. The only beneficiaries of trickle-down economics are the CEOs, and maybe some of the senior employees of companies, who are paid millions of dollars and whose income has increased over the last decade or so by millions of dollars each year—but certainly none of the broader based employees of those companies. The facts speak for themselves. Mr Deputy Speaker, I'm sure you're aware of CEOs that I'm referring to who are now being paid, in one case, tens of millions of dollars for their service, while the rest of the employees are lucky to get the minimum wage or so.

With this legislation, the simple message that goes out to the community is this: at a time when housing affordability is at a crisis, when wages growth is non-existent, when penalty rates are being cut, when higher education costs are increasing, when pensioners are being squeezed of every last dollar that they have and when we have an NDIS system that the government are struggling to fund, which helps some of the most vulnerable people in the community—at a time when the government can't help those people in desperate need, they are saying to the Australian public: 'We can help big corporations that are making some of their highest profits in many, many years.' Indeed, in this legislation there will be an extra $35.6 billion of tax cuts for big business over the years ahead.

We are talking in this case about big business. This is no longer the argument about the small mum-and-dad business. These are businesses that turn over $50 million a year or more. No-one can sincerely say that these are small, struggling businesses. When a business is turning over $50 million, it's a pretty big business in anyone's language. What is even worse about this legislation is that, when the tax cuts are granted to these companies, most of the money is very likely to go to shareholders who live overseas or who invest overseas. That's where most of the money will go. It won't even go back—putting aside the trickle-down economics—into Australian businesses or Australian homes that might in turn spend some of it in their own communities and therefore stimulate their local economies, and the country for that matter. It's very likely that most of the money will go offshore, and the statistics will just highlight that that is going to be the case.

Just as concerningly—I think it was only about a year ago—we saw reports from the taxation department about companies not paying tax in this country. And we saw that there were, I think, one in three companies in Australia that didn't pay tax. Again, these are large companies. One in three, roughly 33 per cent, was the figure for 2014-15. My understanding is that for the previous year, 38 per cent of those companies didn't pay tax. The government are saying that they want to offer a tax cut to a group of companies who, in many cases, are not paying tax in the first place. We're talking about companies that are either public or foreign with an income of $100 million or more, or private companies with a turnover of $200-plus million. These are the kinds of companies that are not paying their tax—1,904 of them.

Putting all that aside, as everyone knows, most companies and certainly any company that has a $50 million a year turnover would employ accountants—people who are smart at knowing how to manage the finances of the business they've been employed to look after. Those companies, quite legitimately and legally, find all kinds of ways to minimise their tax obligations. So the truth of the matter is that, whilst we might have a headline rate of around 30 per cent for companies right now, it's not surprising that in 2012—and that was the last year I was able to get the figures—the companies were paying a company rate of 17 per cent and an effective tax rate of only 10.4 per cent. We talk of companies supposedly paying 30 per cent, but in reality the average tax rate for 2012 was 17 per cent and the effective rate was only 10.4 per cent. That's what they paid, so let's get real about what companies are contributing to the economy and to the taxation revenue of the country.

Amongst those companies are some of the biggest income earners in this country. In recent years, we've seen the profits made by the four major banks. In the first half of this financial year, 2016-17, the four major banks have already made $15.6 billion in profit. Yes, they pay tax—I do not dispute that for a moment—but do they really need a tax cut in order for them to grow when they have made $15 billion profit already? If they do get a tax cut—and that will add to their profit—will they really use it to employ more people, improve their services or perhaps establish more branches around Australia? In the very years that they've been making these excessive profits, we have seen them do the exact opposite. I'm not at all convinced that these tax cuts will be used in a way that will benefit the broader Australian community by stimulating the economy, creating more employment and the like.

The truth of the matter is that these tax cuts are also driven by government ideology. Yes, budgets are about priorities, and we accept that, but they're also about ideology. The coalition government is driven by ideology rather than common sense and fairness when it comes to this matter. It has a budget that is already in crisis. Last year the deficit was $38 billion. This year the deficit is anticipated to hit nearly $30 billion. We have a national debt that's now topped half a trillion dollars. With all of those debts hanging over the government and the difficulty in getting its books in order, the Turnbull coalition government are saying to the Australian people, 'We have a budget in crisis, but we can afford to give $65 billion to big business'—and, in this case, specifically, $35 billion to businesses that have a turnover of $50 million or more. And it does this at a time when the government has taken an absolutely disgraceful stand on some matters. Firstly, with respect to penalty rates, not once did it stand up for some of the lowest paid people in the country. Perhaps somewhere between 650,000 and 700,000 people will be affected and worse off, in some cases to the tune of $6,600 a year, because of cuts; people who are already on the lowest levels of income. Not once has the government stood up for those people, nor did it stand up for the people on the minimum weekly wage in this country when that matter went to the courts for consideration.

This government shows no compassion and no concern for the people who need government support the most, yet it is prepared to stand up and support the people and the companies that don't need a government handout or government support in any way. We have seen that time and time again, regardless of whether it's to do with the shipping legislation, the minimum wage, penalty rates, the 457 visas or any industrial relations matter. We even saw it yesterday when we were debating the industrial chemicals legislation in this place. The government only hears the voice of big business, and no-one else. Whatever big business wants, this government thinks that's the right way to go. That is shameful and it should not be the case, particularly when, in many cases, those very big businesses that the government purports to support do not even have their bases here in Australia and do not make a full contribution to this country in the way they could and should.

I'm going to finish on a couple of other matters that are pertinent to my home state. Again, at a time when we have this government saying that it wants to give billions of dollars of tax cuts to big business, we have agricultural growers in my region who are simply asking for a pittance in comparison to what is being proposed here to support their industry. A year ago we had floods in the northern plains. As a result of those floods, some 50 different producers were directly affected and in most cases lost all of their produce. Their losses amounted to about $150 million. For them, that was all their income for the year. They've asked for some money to build levee banks along the Gawler River—which flows through their properties—which will, if there is a future flood, prevent them from losing their crops.

The state government has come on board with $9 million. The local councils—because there's a group of councils—have come on board with $9 million and are asking for $9 million from the federal government. That's all they're asking for—$9 million. When you compare that with the money that is being sought here, you can appreciate that it really is a drop in the bucket. The Prime Minister went out and saw those flooded farms a year or so ago, but he never got back to them and has never offered anything to them. That's a classic case of the government simply not hearing, not listening and not caring about people who really need some help and who are asking for something that is not unreasonable.

Lastly, on Friday, we will see Holden close its doors in the northern region of Adelaide—an industry that has been producing cars in this country for 69 years. Holden has become an iconic motor vehicle for Australians, and, for the region that I represent and which the member for Wakefield represents, it has been the foundation of the economy. It underpins the economy and has done so for the last 50 years or so. This government could not find the money to support this industry, which generated more tax revenue for the government than it was being asked to provide and which created thousands of jobs for the region, but it can afford, and can find the money, to support big businesses that don't need that support—which is absolutely disgraceful. That has resulted in the loss of tens of thousands of jobs across Australia. It just shows the foolish priorities of this government, the heartless attitude of this government and, quite frankly, the stupidity of this government in cutting off an industry sector that was returning more money to it than it was costing it.

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

I'm very pleased to follow the member for Makin and to support his remarks in relation to the devastating impact that the closure of the car industry will have, particularly on the livelihoods of individuals and families in the northern suburbs of Adelaide. It's going to be a very, very hard time. How this government can continue to ignore the needs of people in this part of Adelaide absolutely astounds me. They should hang their heads in shame.

If you were looking for a piece of legislation that really summed up the approach of the conservatives, you'd have to say that this legislation that we're debating here tonight sums it up. This really is it. The Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 really displays all the twisted priorities of this government: trickle-down economics writ large, tax cuts for multinationals and big business, a $65 billion tax cut for big business. I might remind the government, who like to go on about the size of the deficit—or, anyway, they used to —that this $65 billion tax cut for big business is, of course, totally and completely unfunded.

This conservative government thinks that big multinational corporations pay too much tax. That's their view. But they also think that ordinary Australian workers—like the people the member for Makin was just talking about—earning less than $87,000 a year should pay more tax. These are the priorities of those opposite—that multinational corporations and the banks should pay less tax and low-income workers should pay more tax. That sums up this Liberal-National Party government. At the same time, we have low-income workers who work on the weekends who are going to have their penalty rates cut. This government has done nothing to stop that happening. How on earth can that be fair? How can it be fair that big companies in this country get a tax cut, low-income workers get a tax increase and a whole lot of other people who have to work on the weekends lose their penalty rates? If you are a big business, you will get a tax cut. It is one rule for the rich and powerful in this country and, of course, a very, very different rule for low-income workers.

More than anything else, it really does demonstrate just how out of touch this Prime Minister is. It also shows the rank hypocrisy of this government when it comes to budget repair. We get lectured every day by the Treasurer about the need for budget repair. It started when they came into government a few years ago. They said that we had a budget emergency. You never hear that anymore because, of course, under their watch the deficit has blown out. One of the reasons it's blowing out is they want to spend $65 billion on a huge tax cut to big business. We will not support this part of the government's $65 billion tax cut. We don't think it's fair. We actually think that big business and the banks need to pay their fair share of tax.

I just want to remind everyone about an incident in question time earlier in the year that really demonstrated how much this government wanted to hide the cost of this tax cut. People on the Labor side will of course remember this, and I suspect the Treasurer will too, because it was very embarrassing. We asked a simple question of the Prime Minister: what is the cost of the full company tax rate plan? You might remember that we got a whole range of answers that day. First it was $24 billion. Then it was $26 billion. Then it was $50 billion. When asked again to confirm it, the Prime Minister flicked it to the Treasurer—a hospital handpass if ever I've seen one. At first, the Treasurer said it was $36½ billion. Then, a little later in question time, he'd obviously thought better of that answer and came back and said $65.4 billion. In the space of question time, the company tax cuts had gotten more expensive, to the tune of $15 billion. What a farce. Honestly, you wouldn't trust this lot opposite with a $20 note. Let's be very, very clear: all the evidence from the last three decades, during which it has been implemented by conservative governments across the world, is that trickle-down economics doesn't work. Trickle-down economics has been a failure.

Government Members:

Government members interjecting—

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

Get up and defend it. Tell us what happened when Margaret Thatcher tried it and Ronald Reagan tried it. What we've actually seen—

Government members interjecting—

Funnily enough, the International Monetary Fund doesn't agree with you. We wouldn't want to take any notice of them! You, of course, know better than the International Monetary Fund! You know better than the OECD! Well, actually, these big international organisations are making it absolutely clear that trickle-down economics does not work. We've seen workers' wages—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

Member for Jagajaga, as an experienced member, you know that using the word 'you' is reflecting on the chair.

Jenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | Link to this | Hansard source

That's very kind of you, member for Swan, to remind me of this. We around the world have seen workers' wages stagnate—all of us. Even those opposite who want to ignore what's happening to wages, we're seeing wages stagnate while the profits of big companies have soared. We're seeing the casualisation of the workforce. Too many young people are stuck in part-time and insecure work. While this is happening in our economy and society, we're seeing tax cuts from this conservative government and cuts to social services for the most vulnerable people in our country.

Let's think very carefully about the supposed economic benefits of this proposed company tax cut. The government itself has admitted it will deliver just one per cent of economic growth in 20 years time. I don't think the current Prime Minister will be here in 20 years time to see the impact. It would deliver a $2 a day increase in wages in 20 years time. This is at the time when wages growth has flatlined. We're seeing economic data released recently showing that living standards are going backwards. We on this side do, of course, have very strong concerns about what's happening with wages growth. The diminished bargaining power of workers and unions has played a key role in stagnant wages growth and rising inequality. And, of course, the scorched earth approach that those opposite tried in their 2014 budget, a budget that targeted so many vulnerable Australians—that budget really did, of course, try to rip up Australia's social security system.

The government have no real answers to the big problems that need to be addressed in our economy. Their only answer is to hand out $65 billion for big business. I do want to address one of the criticisms made by those opposite about our position on this issue. They like to go on that we only make these criticisms because of some kind of politics of envy or some kind of class war. But this is an extraordinarily outdated and dishonest notion—that the only way for Australia to grow and prosper is to give the biggest tax breaks to those who need them least. That really is the view of those opposite. It is a vision for a less fair, less prosperous and more divided Australia. Now, that's not the Australia that I know. The Australia that I know deeply values fairness. We are a kind and compassionate country. The proposed company tax cut will damage that. It will damage that kindness and compassion for our fellow human beings and it will badly damage our budget.

What we actually need right now is fairer growth—growth that is all about increasing employment, investing in our people and making it clear that if you work hard in Australia you'll be rewarded, but if you do fall on hard times you'll get help. From our point of view, in Australia you're never on your own. And that is why Labor will oppose this bill.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

This is an astonishing piece of legislation. This is a situation where recently—on 10 October this year—the government borrowed, according to the Australian Office of Financial Management, $150 million in one day, repayable in 2040. That's one for the grandchildren, because of the government's failure to manage their debt and deficit. When we left office in September 2013, we faced the debt trucks of the then opposition leader, the member for Warringah—and we faced the member for Wentworth—saying that a $300 million debt projection was absolutely gigantic, and a debt-and-deficit disaster. Well, the budget figures clearly show that since September 2013, when the Labor government lost office, government debt has risen by $231 billion to now be $504 billion. According to the Australian Office of Financial Management, they're not going to start paying off some of these borrowings until 2040.

Just last week, the Australian Taxation Office revealed—whilst they patted themselves on the back for clawing back $1 billion from multinationals in corporate Australia—that $3.5 billion in tax revenue had been lost by multinationals engaged in tax evasion. Now, $3.5 billion could do a lot. But the government now feels that it can afford to give away $65 billion to corporate Australia. Most of those who will benefit will be the big multinational companies, including the big banks. Their dividends will be imputed—and most of their shareholders are big corporates overseas. So Australians won't benefit; even of the corporate shareholders, very few will benefit. But if Thatcherism and Reaganism showed one thing, across the 1980s, it is that budget deficits blow out, and budget debts blow out. In fact, society has become more unequal. That's what happened under Thatcher's UK and Reagan's USA. This government feels that we're going to follow the failed policies of Margaret Thatcher and Ronald Reagan—trickle-down economics—which will result in greater inequality in our country.

This is at a time when disposable income is just $29,640 per household—below the 2013 level of $31,650. Annual wages growth at 1.9 per cent is the lowest rate ever recorded. The proportion of the Australian total income to GDP—wages are now the lowest since records began in 1959. In fact, the situation is that the decline in terms of household income over the last six months for the nation was a staggering $20.4 billion—the steepest percentage drop since the 2002 recession. For the 10th time recently, jobless figures in this country revealed that over 700,000 people—currently 725,000—are unemployed. The last time that happened was before the coalition was elected in 2013: Deputy Speaker, guess when it was: it was in 1997. So at a time of economic growth in the country but with stagnant wages growth, rising inequality, household consumption down and household income down, the government feels—at a time when profits have gone up by nearly 40 per cent per annum, but wages have remained stagnant at about 1.9 per cent—that they can afford to give more money to large companies, mainly multinationals, to benefit those companies and their shareholders—overseas shareholders—and Australian households will suffer.

The coalition and the conservatives never learn. They seem ideologically obsessed with Thatcher and Reagan and do not understand economics at all. In fact, we get lectures in question time about economics and engineering, but they don't seem to understand anything about economics. Why pursue failed policies? Why pursue them at all?

We've got a situation where this government's got a structural deficit. It is really important to understand this—I see the member for Fisher smiling. The Abbott-Turnbull government added $231.9 billion in gross borrowings in a matter of 48 months. That's $4.83 billion per month during the strongest global recovery since the 1950s. In the last financial year, 2016-17, the coalition government added $6.71 billion in borrowings per month. And they've got the nerve to lecture us! What a hide this mob have! It's extraordinary that they would lecture Labor in relation to this. But, at the same time, they are prepared to give $65.4 billion in tax cuts to corporate Australia and $16,000 a year in tax cuts to millionaires. At the same time as households are doing it tough, at the same time that disposable income is the lowest it's been for some considerable period of time, they want to increase the tax on those persons with income above $21,000 a year. The inequity is rank. The hypocrisy is extraordinary.

As many of my colleagues have pointed out, the figures are quite clear. The government says we're out of touch with the world in terms of our corporate tax rate, but that's not true. The figures are crystal clear, and many of my colleagues have referred to them. In the past, the US Congressional Budget Office said that the headline rate might be 30 per cent in terms of the corporate tax rate in 2012. The average rate in Australia is 17 per cent, so the effective tax rate is 10.4 per cent. And I mentioned dividend imputation before. That's one of Labor's greatest economic reforms. But the truth of the matter is, this government is committed to an ideological pursuit here. This is an absolute special from those opposite: big business and high-income earners—millionaires—get tax cuts, but anyone earning above $21,000 per annum gets a tax hike.

This is all at a time when, from the middle of this year, 700,000 Australians face penalty-rate cuts. The hypocrisy and inconsistency of the government's position is extraordinary. They give us lectures about energy reliability and affordability, but they oppose the supplement of $365 for pensioners and $550 for pensioner couples which is designed to assist them with their energy needs. They want to get rid of it; that's their policy. And, at the same time, they say to us, 'If our policy's accepted and you give us bipartisan support, some might be about $100 per annum better off in 2030.' That's a couple of dollars a week. Even on these particular government figures, the people are only going to be better off by a couple of dollars in a decade. So where's the benefit of this particular corporate tax cut they're giving? It's not there.

I think government budgets, just like budgets in the household, reveal people's values, their ethics and their priorities. Recently I met with Geraldine Mackenzie, the new USQ vice-chancellor, and Ian Hawke, the director of advancement in the Office of the Vice-Chancellor at USQ, in my electorate. That's a great university, but the government wants to slash funding for universities. This is a regional university that's hit its Bradley target with respect to low-socioeconomic students—for many students, it's the first time anyone in their family has ever gone to university. This is a university with campuses in Ipswich and Springfield in my electorate. But what is this government doing? It's cutting $3.8 billion of funding to universities in the higher education sector. Ian Hawke says: 'Clearly, the decline in funding means Australian students will be paying more for potentially a lower-quality experience. And, of course, the further risk is an international student market thinking Australia is a poorer-quality proposition because the government has reduced its commitment, and the uncertainty is destabilising.' They can't find the money for the university sector, but they can give the money to multinationals? It's a warped sense of priorities.

They've taken $637 million out of TAFE training and apprenticeships, cut $2.5 billion out of skills training, and they've cut $17 billion out of needs-based funding for schools. But they do this all in the context of giving back $65 billion in tax cuts for big business. It does not make sense. If we want future growth and productivity and to make sure we're an economy that can compete in Asia, we're not going to do it by slashing penalty rates. We're not going to do it by slashing wages and salaries in this country. We're going to do it by the ingenuity, creativity and skills of our people. Investing in TAFE, in higher education, in the tertiary sector and in our schools is the way to go. Don't give a tax cut to multinational companies; invest the money in education. Because, long-term, that is better in terms of productivity and economic growth. And with economic growth will come social justice and equality of opportunity. It'll give a fair go, and Australia will have both a productive and growing economy and a strong and prosperous future, with an equal say for people from all backgrounds. It will be an equal society. There'll be greater equity in the economy and our society.

We've had 130,000 people employed in our university sector, and I'd like to see more people employed. It supports another 40,000 jobs. I'd like to see our universities be cathedrals of learning. I'd like to see our schools as palaces of education. I'd like to see our preschools—our kindies—as places where kids can come and learn as best they can, with teachers who are best trained to care for them, who want their advancement in life.

Education is the great equaliser in society. But the government thinks the great equaliser in society is Reaganism and Thatcherism, and it's not. They're going to raise fees, cut university funding and put a greater financial burden on graduates, universities and their students, and resourcing. That's the priority we should have. We shouldn't be debating this legislation; we should be debating other legislation with extra funding in the budget for universities, for TAFE, for schools, for preschools and kindergartens. That'll make a difference in our region. Just think about that.

I'll finish where I started, with the $150 million they borrowed, which will be refunded in 2050. We've just wasted about $120 million on a marriage equality survey. They can afford to do that—honestly! I voted 'yes', and we'll be voting again in weeks to come, when I expect the 'yes' campaign to win. We'll be voting in this parliament in relation to that issue again. We should have done that and dealt with this issue months ago. Those are the warped priorities of this government. They're getting it out of whack. We need access to fair and well-funded education in this country. That's one of the most effective tools to fight against inequality. But this government is about an unequal Australia, not an equal Australia. It's about inequity, not equity. It's not about social justice; it's about social injustice. This is a government that has its priorities all wrong. That's the difference between us and them in terms of the economy. We're about the economy, and we're about equity. The government is not about the economy and it's not about equity. They claim they're the great champions of the market. They claim they're the great champions of economic growth, but they're not. They're not about a prosperous future for this country. They're not about that at all. We should not be supporting this legislation. It is not fair on the country. It is not good economics and it's not good for society.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

It's always hard to follow the member for Blair. I think it is the member for Blair—somewhere around Ipswich way. He's always a very well-prepared, well-thought-out speaker.

A government member: Doesn't say much for you!

I'm receiving a bit of negative feedback from across the aisle from my friend. There's a bell ringing around this country, and it seems it's ringing louder and louder. The only people who can't hear this are the government. It gets louder and louder every day. By election time, it will be like a gong. It's a warning bell to the government, the community and society, because fundamentally we have a whole lot of troubling aspects in the economy. We have low wages growth. We have rising income taxes for working- and middle-class Australians. We have cuts in penalty rates at a time when workers are supposed to be asking for a pay rise. We have sham contracting in the labour market. We have vicious competition in many areas of the labour market. We have a shift away from the traditional arrangements of permanent employment, permanent part-time employment and even the traditional arrangement of casual employment. We have increasingly more arrangements in the labour market, whether it is labour hire or self-contracting or subcontracting. Sometimes we have contracts upon contracts. All of these arrangements are designed to have a vicious deflationary effect on wages. That is the reason they exist. We've seen it in Caltex and Bardier and one wage scandal after another. All of this ripples throughout the economy.

I've seen many situations in my own electorate. They were working people who once would have been on predictable arrangements with predictable pay rises and would have had a level of security which is commensurate with their ability to not just pay the bills, but also to get ahead. If they worked hard, they could get into a situation where they could become middle class and their kids could go to uni, which is the Australian dream. Traditionally, it's been the dream of Anglo-Saxon postwar economies. That is, we would have a large middle-class—fewer super-rich people and fewer poor people, but a large middle class. That was the aim of the society. All of Menzies' speeches—and we hear it all the time from those opposite—were consistent with that, and so were the speeches of most postwar leaders.

What we're seeing is income deceleration out there in the economy, and this affects the consumer economy. One of the things around the penalty-rates debate is that I've had cafe owners say me: 'If only I could cut the penalty rates, I could open up on a Sunday or I could employ someone else on a Sunday.' I say: 'That's fair enough that you might look at your own enterprise and think that, but what happens if everybody does it? There's less money in the economy.' Most particularly, what happens when the big entities get to do it? They just profit that. They take that wages cut and put it in their pocket or give it to shareholders. It's not new thinking. Otto Niemeyer during the Depression famously had the same idea: cut pensions by 10 per cent and wages by 10 per cent and put your economy back into surplus. There is one problem with that—and we've got Mr Hughes' portrait up there to remind us all in this chamber of the effects of history—it doesn't work. In actual fact, you find that your economy decelerates. It's an interesting thing. We've got that big warning bell—that gong—going off in the economy.

I've said before in the House—and it's worthwhile repeating here—that we hear from the government all the time that a job is the best form of welfare, but it can be put another way too. ACOSS put it in Poverty in Australia 2016:

Being unemployed is the strongest overall predictor of poverty, with higher rates of poverty amongst this group than any other group.

So what happens when a government sets out, in parts of the economy, to court unemployment for groups of people? You saw it in the car industry this week. The last car rolled down the line at GMH Elizabeth. You can go on Facebook. There is a page tracking this car's progress from the body shop to the paint shop. It's now getting the doors, the windscreens, the dash and the engine put in it. It's slowly making its way. On Friday, that last car will come off the line. With that last car, thousands and thousands of workers in the economy will suddenly have the predictability and certainty of a highly skilled job with good wages suddenly ripped away. We know what's going to happen to the car company. Nine hundred and fifty people are going to seek other work. Some of them are going to be unemployed, and that unemployment will be the greatest predictor of whether they stay in or out of poverty. It's largely dependent on their family circumstances and what's happening in their own family units. In the components sector, it's going to be very difficult indeed. It's going to be very difficult for blue-collar people in South Australia, where they also face big reductions in the shipbuilding workforce, big reductions in civil construction and big reductions in commercial construction at the moment. So we're seeing a sort of blue-collar hit on jobs in South Australia. We're seeing the same thing in Victoria. Often, the jobs that the government talk about as though they're creating them—but, actually, it's the private economy creating them—don't directly translate to those who are losing their jobs. So there's going to be great dislocation come Monday next week.

You see that uncertainty spread by this government all the time. It's spread in terms of not just the economy and wages but the energy crisis. We see the government order a report. We have business, unions, state premiers, the Labor opposition and Senate parties all lining up behind the Clean Energy Target. So you've got a semblance of certainty, you've got modelling and you've got government process. They ordered a report, they got the report and they considered the report. Initially, they said nice things about the Clean Energy Target. Then what do we have coming out of the party room? It's a result of the division and the malevolent power that Tony Abbott has on the coalition party room to say no, to spike things and to threaten the leadership. Of course, that uncertainty around energy policy ripples throughout households. It ripples throughout manufacturers. Every manufacturer I've been to see has talked to me about power. Every food manufacturer, welding shop—wherever you go, people are talking about their power contracts in manufacturing. It impacts on investment. Higher education is more expensive.

The government are slowly—and you can see it everywhere, such as with the housing affordability crisis—putting up big blockades on the ramps to the middle class. They are keeping everybody on a low road in a low-wages economy. This hasn't worked anywhere else. They'll tell us on this bill that they're doing tax reform. But they're not dealing with negative gearing and the capital gains tax concessions, which are fuelling the housing affordability crisis. They're not dealing with trusts, where we know people income-split and deliberately manipulate the taxation system to lower their taxation rates. They're not dealing with the people who spend thousands and thousands of dollars every year on their accountants to reduce their tax so they don't contribute to society. They would rather pay their accountant than pay the taxman. What kind of disloyal, miserly thinking that is—that you would rather give your accountant 10 grand or 15 grand than give your country 10 grand or 15 grand! It's lunacy. It's actual lunacy. It's a deeply sort of immoral/amoral thing to do. So they're not dealing effectively with the people who are just dodging their responsibilities. It's not just about dodging tax; it's about dodging your responsibility as a citizen. They don't want to pay for the roads that they drive on and they don't want to pay for someone else's health care and education. They don't want to pay for the very things that make us a community and a society.

Tax cuts by themselves are not tax reforms. It's not tax reform to just simply cut tax. This has been done before. Ronald Reagan did it, and George Herbert Bush famously said, 'So what I'm saying is: it's just not gonna work,' and then he went on to refer to a man who's investing in 'voodoo economics'. We know what that did to public finances in the United States. It destroyed them. So simply handing out unfunded tax cuts doesn't do anything for your economic growth. We know what the predicted and modelled economic growth is. It's one per cent in 20 years time, and the wages that we're supposedly all going to benefit from will be two bucks a day in 20 years time.

This is an assault not just on an economy that might serve working Australians; it's an assault on good public finances. It's an assault on good public finances to think that you can give out this $65 billion tax cut. But let's not forget that we've had different figures all the way along. First of all, the Prime Minister said $24 billion, $26 billion and $50 billion in answers in question time. It was in the shadow Treasurer's speech. Then the Treasurer said, 'It's $36.5 billion,' and then he came back and said, 'Oh, it's $65.4 billion.' So they're all over the shop. What we do know is that this is an assault on good, cautious public finance. It's a departure from the traditional role of conservatism in this country—a departure from my grandfather's Liberal sort of faith. This is just a big giveaway to the top end of the town in the vain hope that you might somehow get an economic policy out of it.

Meanwhile, what are they doing to the people who have stagnant wages growth and whose friends and family—and maybe themselves—are being thrown into an economy where labour hire is increasingly prevalent and, with it, job insecurity and sham contracting becoming increasingly more prevalent? Well, they're giving those people an income tax rise. If you're on 55 grand a year, your tax is going up $275 bucks. It doesn't seem to make much sense. Those people are actually the big contributors to economic growth in this country. They're the ones who spend their wages at shops, buy things, invest in things and make things. If you're on 80 grand, it's an extra $400.

All of this means that there is a big bell ringing in the economy—ding, ding, ding, ding, ding, ding, and on and on it goes. Everybody else in the country can hear it and everybody else in the country knows it. Even the CBA's chief economist, Mr Blythe, talked about wages growth being two per cent 'if you're lucky'. He is reported in the Australian Financial Reviewas saying:

We used to talk about wages policy … and considering the current backdrop. I think maybe the time has come again to think about that.

You've got there a bank economist talking about wages policy. The government should listen to him. Frankly, they should also listen to the opposition and start thinking about what they're doing to public finances, to public trust in the economy and to overall economic growth—because this bill is not going to be good for it. It's going to be very, very bad for it. It's going to be very bad for public finances and very bad for the national economy.

Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

I listened to a CEO recently who was asked about the wage levels of his sector and when he expected to see wages in his sector rise. They've been very flat and there's a lot of casualisation. He was asked what he thought might have to happen before wages would become more secure and wages would rise. His response was: 'Well, profits have to get better.' That seems to be a bit of a catchcry for the corporate world—that it all depends on profits being better. But you have to ask yourself how much better they need to be.

Official data show that wages are actually going backwards, while company profits are surging. At the end of last year, in particular with mining and construction leading the trend, the Bureau of Statistics business indicators for the December quarter showed a massive 20.1 per cent surge in profits over the quarter, while wages fell 0.5 per cent. I guess that's got me asking—when does the trickle start? When does it start to go down from on high and catch workers? When do they get to feel any bit of dampness or moisture? Right now they're not getting it. That's what this enterprise tax plan relies on. It relies on trickle-down economics. All the evidence would suggest to us that it just ain't going to happen. If you're not getting it when you're seeing a massive 20.1 per cent surge in profits, you've really got to ask when are you going to get it?

When I think about this whole idea and whether minimum wage earners will get a trickle-down treat from company tax cuts, whether new jobs will be created by this trickle-down that is meant to happen thanks to this legislation, it is really hard to see what might happen. History and international experience would tell us that you have to be optimistic to think that it's a thing. It assumes that the benefits of any productivity growth that are associated with any increased investment will actually come through, and we're just not seeing it. That really is the framework in which I look at this piece of legislation. I think it is rather ironic that this came out of the so-called jobs and growth agenda, which of course we haven't heard much of lately. We've got different three-word slogans that have replaced that. There's been a variety—reliability and something and something.

Honourable Members:

Honourable members interjecting—

Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

Well, some people can remember them. But I think we've got to be as dubious about them as we are about the 'jobs and growth' phrase. It was first flagged in last year's budget. Then just before this year's budget, we really got a bit more detail about it.

I want to put on the record that I'm a huge supporter of tax cuts for small business. As someone who's been in small business for 25 year, I've had the benefit of being my own small business, employing people, having different structures and there's no way I would travel to the other side of the chamber. I am certainly not the exception on my side of the chamber either. There are many, many of us who at different times in our life have had different models of self-employment. It's certainly not a gift that's only bestowed on those on the opposite side. I've had the benefit of being a small business but have also worked a lot with big business. I'm hugely supportive of tax cuts for small businesses. Small businesses do an enormous amount with very little. The people who miss out when it's a small-business tax cut and have missed out through all of this are the people who aren't incorporated, the people who are sole traders and work for themselves. They don't often employ people—it might be a husband and wife team. They miss out completely on any of the benefits.

What I'm not a supporter of is a small-business tax cut that just goes on and on and on to any size business, especially one that ends up being a $65 billion tax cut for business. I will never forget the question time when we actually first heard the detail of what these cuts would be—and I should be specific; it's $65.4 billion. This is a hit to the budget bottom line; absolutely, a straightforward hit to the budget bottom line. Really, for a government that has so hypocritically ranted and raved about reining in the budget deficit and about budget repair, to throw this on to the table is an extraordinary act, and then to watch as the figure to this was allocated. It was a simple question that we asked in question time. It was the Leader of the Opposition who asked the Prime Minister a very simple question: what's the cost of the full company tax rate—cut, plan? What is the cost? The answer had three figures: $24 billion, $26 billion and $50 billion. Forgive us, but I think on our side we were a little confused as to which was the right figure. So when asked again to confirm the figure, the Prime Minister , as is his want, flicked it to the Treasurer. We've seen him do that a lot with energy in the last few days. Out of that the Treasurer disclosed, with quite a bit of drama and performance, a figure of $36.5 billion that this enterprise tax plan would add to the budget bottom line. We were still confused because this was a different figure to the three that the Prime Minister had given us. So we asked again, and we got yet another answer to the same question. The Treasurer replied $65.4 billion. In one question time, those tax cuts, the ones we're discussing today, got more expensive to the tune of $15 billion. It's probably lucky question time wasn't much longer.

We've been very clear since this plan was first introduced to highlight not just the hit to the bottom line but how minimal the benefit will be. We are talking about—and people should really remember this—one per cent of economic growth, not next year, not the year after, but in 20 years time. And we're talking about how this would trickle down to wages. Well, it will—to the tune of a $2 a day increase in wages in 20 years time. As a small business operator, you're always weighing the investment and the return and you're trying to keep your costs down and maximise the benefits that you get. I just can't see that $65.4 billion is a really great use of that money to get only one per cent of economic growth in 20 years time or a $2 a day increase in wages in 20 years time. This is all happening when wages growth has completely flatlined to record lows of 1.9 per cent.

The economic data shows that our living standards which had been climbing have gone backwards, that families are facing a really difficult mix of rising costs of electricity prices, stalling wages, record high underemployment. These are all the issues we're confronting, and this is all we've got. It does nothing to address any of those issues. It also comes at a time when this government has supported penalty rate cuts which came in on 1 July this year. By the way, the penalty cuts were meant to allow employers to hire more people. I don't think we've seen that yet. Maybe I'm missing something. In my community I'm not hearing people say to the government, 'Thank you so much for cutting those penalty rates, because now I've got a job—lower pay but I've got a job.' I am not hearing that; I'm hearing that people are starting to feel that pinch, and I'm listening really hard to my electorate of Macquarie. I think I must be listening much harder than government members are listening to their electorates.

When I hear those who support this measure say that it's needed to drive investment, I reflect that in no time in the 25 years I've been in business can I really see that these sorts of initiatives have made any difference. Fortunately, governments have not tried this very often but, if you put it into the broader context, not that many years ago, we had a huge investment boom in Australia and we had a headline corporate tax rate of 30 per cent. It didn't seem to impact on that massive investment. The US Congressional Budget Office put out a paper earlier this year, saying they recognise the statutory corporate tax rate is just one of many features of the tax system that influences corporate behaviour. My experience with corporates would reflect that as well: that there isn't one single reason a company decides to do what it does. There will be a number of things, but a corporate tax rate is not the sole driver of it. And the US Congressional Budget Office says that, because of their broader scope, the average and effective corporate tax rates are better indicators of a company's incentives to invest in a particular country, rather than the statutory corporate tax rate. The paper points out that, with a headline rate of 30 per cent in 2012, the average rate for Australia of tax paid by corporates was 17 per cent and the effective tax rate in the end was 10.4 per cent. I really think that this is a government trying to take a shortcut—to try to be seen to be doing something to help big corporates, to try to be seen to be doing something about unemployment and to be seen to be creating jobs. But there are so many better things that they could be doing than this. I can think of so many ways that $65.4 billion could be better spent.

I noted with interest this week that the Assistant Governor of the Reserve Bank, Luci Ellis, actually quashed the argument that you need this tax cut to drive investment. Maybe the RBA is missing something but, in my experience with the RBA, they are smart people and they look really closely at the evidence before they say things. Ms Ellis said:

When businesses make decisions about where to locate – the tax rate does presumably matter, but so does the business environment, the institutional framework, the rule of law, the macro-economic outlook and where the resources are.

There's a broader business environment to consider and those advantages haven't gone away.

We are very fortunate that we do have those business advantages. When it boils down to it, budgets are all about priorities. This was announced as part of a budget, and this government has quite simply got the priorities wrong. They've got their big business tax cuts, they've got high-income earners getting a tax cut, they've got workers who earn $21,000 getting increased taxes, and they've got penalty rates cuts. You would have thought all of this might be enough. But we have a government that continues to try to take more and more measures.

In the time that I have left, I might mention that we are one year into this term of parliament, but we are five years into a coalition government. Australia and the economy are facing serious challenges on the jobs front. It's not often that you hear those on the other side acknowledge that, and acknowledge that things are tough. But in the other chamber today, I did hear some acknowledgment that things are tough, and I think that's important for people to hear from all sides of politics. It should be more than enough for the Treasurer of this nation to be focused on these challenges, and possibly coming up with some more creative ideas. Let's think about what would be some better ways to tackle the issues that, supposedly, this enterprise tax plan will address.

I think the things we have to focus on are things like properly funding our schools. That is one way to reduce inequality. If people have money to spend, they have learnt well, they have got great tertiary education, and they get well-paid jobs or they create their own businesses. We on this side of the House would definitely like to see people creating their own businesses. They are the things that will make our economy boom and, quite frankly, then there'll be demand, and then big businesses will benefit as much as other businesses. We could see a fairer tax system. We could further deal with superannuation tax concessions. It's something that we've announced—and yet somehow this government has decided it was a secret super tax and we've been hiding it. But, in fact, we are very upfront about the sorts of changes to the tax system that we would like to see. If you want to improve the tax system, forget this one—let's level the playing field for first home buyers through reforms to negative gearing and capital gains tax. Let's cap deductions that people can obtain individually from managing their tax affairs to $3,000, so they actually do pay a fair share of tax. Let's make sure big business pays its fair share of tax. They're the sorts of things we should be discussing in this chamber, not this bill.

Meryl Swanson (Paterson, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to remind the Turnbull government that my colleagues and I believe in a fairer tax system for Australia. As such, I will not support this government's $65 billion tax cut to big business. My electorate of Paterson is home to several communities that are living, breathing, collateral damage of a system where the government takes from those who are less well off and gives to those who are far better off.

A $65 billion—just saying those words!—payout to big business is being funded by low- to middle-income individuals and families. That's $65 billion drawn from the pockets of some of the most hardworking people in our country, including in my electorate of Paterson. Under this budget, Australian families are suffering stagnating wages and rising electricity costs—we all know that too well! And don't you look forward to getting the text to tell you to turn the air-conditioner off on the 45-degree days? We'll all wait with bated breath for that. That is alongside record high unemployment and serious underemployment. In an economy that has traditionally been characterised by strong economic growth, living standards went backwards in the last quarter. I'm not sure what evidence this government is relying on to justify big business payouts, but Labor is listening to the experts. And the Assistant Governor to the Reserve Bank, Luci Ellis, nullified the argument that you need a tax cut to drive investment. We ask again: where are this government's priorities?

Labor is committed to helping the people of Australia. We want equality across the board. We want people to have good and productive lives and jobs. Labor believes that budgets are about identifying needs, prioritising them, developing good solid policy responses and compiling a measured and equitable financial pathway towards implementation. In contrast, the Turnbull government budget fails to address some very serious economic challenges. The government has assured us it's meeting the challenges on the jobs front and the wages growth front, but this government has promised the people of Australia many things. And, once again, the people of Australia have been let down, seriously let down.

Labor believes in ensuring equal access and opportunity for every Australian. That begins, first and foremost, with a properly funded education system, not this watered down Gonski 2.0 nonsense. It begins with proper investment in infrastructure and ensuring all Australians have access to information and communication that is so vital to living in a modern world. It is, indeed, so vital to every facet of business and industry, vital to staying engaged in a global community. I'm talking about connectivity, digital communication and, specifically, mobile and internet connectivity. This has been an abject failure on the part of the Turnbull government from the very person, the Prime Minister, who, when he was communications minister, was the master of all things connected. He was going to create a great internet. Do you remember that one? It was going to be faster and cheaper, and have a multi-mix technology basis—and wouldn't it be great? I can still remember that image of the member for Warringah and the then-communications minister standing in front of the illuminated board pointing out how fantastic it would be. What an abject failure it's turned out to be.

Just today, we've heard from the Telecommunications Industry Ombudsman that more than 27,000 reports were lodged with them during the past financial year, and complaints about the NBN have risen a whopping 160 per cent. And I want to share some of the ombudsman's, Judi Jones's, comments in her report published today:

Australians are relying more than ever before on technology to stay connected, to be informed, and to do business, so it is critical that consumers are able to rely on the services they sign up for. While it is necessary to acknowledge the role of the national broadband network in driving significant change in Australian telecommunications, complaints have increased across the board. Complaints about services delivered over the national broadband network have more than doubled.

This is the ombudsman's report that was published today, with Judi Jones saying:

This includes an increase in complaints about connection delays and reliability issues such as faults. The increase is somewhat to be expected given the accelerated rollout of the NBN, but is still a concerning trend.

There you have it, hot off the press today from the telecommunications ombudsman, Judi Jones. Clearly, this is not good enough. It is patently not good enough. It is an outcome fundamentally out of keeping with the priorities that Australian people so desperately want. We need to keep pace with the technology. We want to be connected to each other, not only to our friends and family, but to our business associates. We see members constantly glued to their phones as they walk around this House. Imagine if they couldn't get the internet or mobile communication. As the member for Paterson, I am extremely distressed to say that I don't have the NBN and I don't even have internet at my residence. We have to rely on a dongle. It is clearly not good enough. And there are so many more in my electorate who are absolutely bitterly frustrated by this failure.

Another great fail has been this government's so-called jobs and growth agenda. What a spectacular flop! In the Hunter Valley, home to my electorate of Paterson, the unemployment rate hit 7.6 per cent in August. At the time, this was nearly two per cent higher than the national unemployment rate. In June, youth unemployment in the Hunter Valley hit 10.9 per cent. As the member for Paterson, I am committed to ensuring that high unemployment rates in my electorate become history. I am committed to ensuring that we identify the barriers that my electorate faces in finding work. I'm committed to ensuring that our communities have the opportunity to create jobs as well as just find them.

I demand to know: what has the government done to help the battlers of my electorate? Not much, I suspect. This government has offered tax cuts to big business. This government has ensured tax cuts to high-income earners. This government has ensured increased taxes for workers earning above just $21,000. And let's not forget about penalty rates. This government has worked to ensure that some of the most hardworking individuals in our country don't get financial recognition for the service they perform for our community, for the hours that they spend away from their loved ones during what is traditionally family time, for the nights they spend serving others on shift work instead of enjoying recreation themselves or even sleep.

Many of the roles that require penalty rates to provide even a modicum of a respectable wage are the province of casual or part-time employees. There has been a move towards casualisation of jobs right across Australia. People don't need to hear it from Parliament House. They're living it every day. Casual workers have minimal job security and work hours foreign to most people. We hear about the 24/7 economy. Whilst I don't deny that it exists, I say to you: when schools operate 24 hours a day, seven days a week, then we might consider it, but I'm sure that will never happen. While we have young children who need to be educated within a Monday-to-Friday, nine-to-three framework, that will be the basis for the working week. It is just common sense. Anything very much outside of those times is not conducive to family time, and we need to be thinking about that more. It is the government's responsibility to address this issue. They're doing precious little, and I personally don't like waiting around.

I was delighted to welcome the Australian Jobs Taskforce to Paterson. This federal caucus committee, chaired by the member for Longman, Susan Lamb, is travelling across Australia to address inequality in employment and opportunity. The statistics are undisputed. Regional areas across Australia are suffering incredibly high rates of unemployment, and our young people are being hit the hardest. I remind you, Deputy Speaker Claydon: just last year, the youth unemployment rate in the Hunter Valley hit over 20 per cent— and I know you know this well, as, being the member for Newcastle, you share this area with me. It is truly distressing. That meant that one-fifth of our young people were looking for work and couldn't find it. This astronomical rate was second only to outback Queensland, which had a youth unemployment rate of 28 per cent—almost a third of young people not being able to find work. I fail to see how the government continues to let this happen.

A fair go is something we Australians once upon a time were proud of. We were proud to offer it to all, but it seems we are really struggling—and I am struggling to see how this is providing a fair go. During the recent Australian Jobs Taskforce hearings in my electorate, I heard from young people who were desperate for a job—people who had disabilities so minor they've fallen through the cracks with regard to any government funding or support but who still have so much to offer, and highly skilled and qualified mature age workers who, after leaving employment due to family commitments, cannot re-engage with employment. Their references are stale and their contacts are out of date, but, again, they're smart, strong and willing. These people want work. They have so much still to give, and yet no-one will give them a go. It is people such as these who are last on the list when the economic climate is tough. Those who are most vulnerable are struck the hardest.

These high unemployment rates reflect the economic climate of the region. Stagnating wages and little economic growth point to an economy that is struggling. That is squarely the remit of the Turnbull government, who like to constantly remind us that they're the economic maestros in this concert. They like to tell us how good they are at balancing the books and driving investment, driving wages growth and driving down unemployment, yet, after four years, we're still not seeing any of this. Where is it, you economic geniuses? I ask you: where is it?

Another factor driving youth unemployment is the skills mismatch we're seeing right across Australia. Growing industries in my electorate, as in many others, require high skilling, yet in the past year we've seen the constant erosion of TAFE and VET programs. Since June 2014 we've seen over 4,000 apprenticeships lost in the Hunter region alone. It's further evidence that the very great value of these training opportunities is being lost, yet this government's skewed budget priorities consistently leave this out of the equation.

The erosion of funding is only reinforcing the stigma that sees apprenticeships regarded as second class, and this is wrong. There are many skilled, well-paid, valuable and, indeed, noble crafts and trades that have literally built this country.

Government Member:

A government member interjecting—

Meryl Swanson (Paterson, Australian Labor Party) Share this | Link to this | Hansard source

Your government's not helping to train anyone. Apprentices are what the economy needs, and we've said that, if we're elected to government, one in 10 of the people on every federal government infrastructure project will be an apprentice. I think that would be a fantastic thing. The benefit would be twofold: it would give our young people jobs and it would also encourage them on a lifelong path of learning.

How can a government that's so committed to jobs and growth constantly ignore the facts? In 15 years, today's youth will be the leaders of this nation, and the government is not helping them off the starting block. The longer youth remain unemployed, the more their opportunities in the workforce dwindle, and it only takes six months. Someone who is finishing their HSC this November—and many are sitting it right now—only has those precious few months into summer to find a job before it will become exponentially more difficult for them to do so. The longer they remain unemployed, the harder it will be to find a job. But it only takes six months for it to become really difficult. Potential employers look at a resume and say, 'You haven't worked for six months. What's going on here?' even though we all know how quickly that time can flit by. The problem compounds and people have fewer prospects for employment and income growth. By pursuing such an ill-advised budget, this government is directly diminishing the futures of Australian youth.

In Paterson, we're actively working to try to combat this policy void of the federal government. We're doing our own thing, if you like; we're engaging in grassroots initiatives, which I'm heavily involved in. There have been some fantastic projects. In the short time I have left, I want to acknowledge Cessnock City Council, which has been running the Cessnock city youth employment project. They've been training a small group of people with a great model. It's a 12-week program. The results from the pilot program are that five of the five young people found employment after completing the program. Congratulations to Jane Holdsworth, the economic development manager of Cessnock City Council. She's doing a magnificent job. She's hoping to roll this model out to other councils all around the country. Personally, I would really like to see that happen, because I know it is very successful and quite novel. In the words of Jane, if every council in Australia took 20 young kids and got them a job at the end of the year, 14,000 to 15,000 jobs would be created every year. Imagine if each of our councils could train 40 or 50 young people. It would be truly amazing.

This government has its priorities wrong, and this is well and truly exemplified in the current budget.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

As my colleague so ably said, the fact that the government is pursuing these big-business tax cuts shows how wrong their priorities truly are. Not only are they intent on continuing to push their big-business tax cuts; they also have gotten rid of the deficit levy whilst we have a deficit, so they're giving high-income earners a tax cut as well. At the same time, with their increase to the Medicare levy, they're giving ordinary workers a tax rise. They want to give big businesses $65 billion in tax cuts and they want ordinary workers who earn $21,000 to have a tax increase. How is that fair? How is it that this government thinks that this is okay? How is it fair that this government continually attacks working people in Australia? How is it fair that this government wants to believe in trickle-down economics and wants to believe in the jobs-and-growth plan that it keeps talking about, where businesses are going to employ more people if the government gets this through?

We saw the Business Council of Australia in the media today saying, 'We really need this. Australia has one of the biggest taxes on companies in the world. People won't invest and we're not going to get the jobs if this doesn't happen.' But the RBA Assistant Governor has belled the cat on that today. The Reserve Bank Assistant Governor, Luci Ellis, said that the corporate tax rate in Australia was 'irrelevant' for domestic investors because of our system of dividend imputation. Indeed, she said that the tax rate was only one of many variables considered by foreign companies who want to come and invest in Australia. She said that one of the things that actually impacts is the investment that we've seen in recent years over the mining boom because we have the resources. Multinational companies are coming here because we have the resources, not because of our tax rate, and we had that mining boom at a time when we had the tax rate we've currently got. Ms Ellis said that, when foreign companies are making these decisions on where to invest, they consider many variables, including the tax rate, the business environment, the rule of law, the educational base of the country and where the resources are. That's what international companies and companies that are going to invest in our country are making decisions on.

Not only that, the claim that we are one of the highest-taxing nations in the world when it comes to company tax is simply not true. If you look at the United States' Congressional Budget Office's paper, put out earlier this year, it shows that Australia is actually down here when it comes to corporate tax rates. That's what it says, because that is the truth. It says:

Because of their broader scope, average and effective corporate tax rates are better indicators of a company's incentives to invest in a particular country than is the statutory corporate tax rate.

It points out that, while there is a headline rate of 30 per cent in Australia in 2012, the average rate for Australian companies was 17 per cent. Because of the reforms that we supported, we're getting a bit of transparency now about how much tax some of these companies are actually paying in Australia. Some Australians are quite shocked when they see that published list. They see that some of the companies that are in Australia are actually paying very, very little tax. Indeed, some of them pay zero tax. To come in here and claim that these companies need this tax rate when some of them don't even pay any tax, and some of them pay very little tax, is ludicrous. To say that this is going to increase jobs in the economy is simply not true, but the government continues with these warped priorities and continues to insist that this is the only way forward.

We have our own priorities on this side. We're going to prioritise other things, like properly funding our schools, which is what the government said it would do. We all remember the government said it was on a unity ticket with Labor when it came to investing in children's education. The funding wouldn't change depending on who won government. We all remember it well. There were people out there with their signs saying that the government was going to invest in schools and education, just like Labor was. We now know that that's not true.

Another of our priorities is infrastructure. In my home state in Tasmania, we've seen no new infrastructure projects under this government—not one. The only infrastructure projects that have occurred in Tasmania are ones that were funded in Labor's plan in 2013 and ones that Labor committed to, and the government had to copy us in election campaigns. That is it. That is all the government has invested when it comes to infrastructure in Tasmania—no new plans, no investments.

On our side, one of our other priorities is having a real fairer tax system. That is, a tax system that leads to dealing with some of the inequities in the system. We have said very clearly that we want to deal with the superannuation tax concessions. We've said very clearly that we want to level the playing field for first home buyers through reforms to negative gearing and capital gains tax. Of course, we believe that the housing issue in Australia and housing affordability are a serious issues that need to be addressed by the government, and we've seen very little from the government in this regard.

Another one of our priorities in our fairer tax system is capping the deductions that people can obtain for managing their own tax affairs. We've also recently announced our plan to impose a minimum 30 per cent tax on discretionary trusts to deal with some of the issues around income splitting. So it's not like we're shying away from the hard decisions. We are making our tax system fairer. We want to do that. But, of course, the government is the one that is pursuing this $65 billion tax cut rather than investing that money where it should be—in infrastructure, in schools and in other areas.

If you want to talk about the government's inaction, there's no clearer way to do that than to talk about the portfolio that I'm the shadow minister for—ageing. The government in recent weeks has had a review into the Living Longer Living Better reforms that Labor instituted when we were last in government. It has had, for the first time, data about home-care packages—the packages for older Australians so that they can stay in their own homes for longer and get the support that they need. When the government released the David Tune report into Living Longer Living Better and it finally released the data that I've been calling for since March, what has become evident for the waiting lists for home-care packages is that more than 90,000 Australians—vulnerable, frail Australians—are waiting for care packages so that they can get support to stay at home. The sad reality is that those people are going to be waiting some time for those packages.

This would be a great investment from the government, rather than giving $65 billion in tax cuts to big business. This is the sort of thing a government should invest in. Not only does it actually save the system money; it's actually a better outcome for the individuals, their families and carers. It also creates jobs. One of the fastest sectors for jobs growth in this country is health care—and, indeed, aged care. We're going to need a lot more workers to look after our changing demographic and our population. So it would be a very sound investment. Instead, what we've seen is no further investment from the government, but they will release an extra 6,000 packages. So that's only 6,000 packages to deal with over 90,000 people waiting on that list. That's just one example of where the government could spend some of the $65 billion it wants to give away to business. That's what the government keeps talking about—this trickle-down effect. They say, 'It will create all the jobs. This is our priority.' But it's simply not going to work. It's not going to work the way we are in Australia at the moment—for today's economy and for the situation that we face in Australia today.

One of the issues that keeps getting raised when it comes to jobs in Australia at the moment is wages growth, or the lack of it. We've seen some of the big companies pay very little or no tax. Already, they're not investing in their people and their workforce to the level that they should. But we've seen a campaign to reduce penalty rates from some of the businesses in Australia. We've also seen people not willing to give workers the pay rises that they deserve. We've also seen—and this is really interesting—that the link between increased productivity and increased wages appears to no longer correlate the way that it used to. That is because of technology and the changing workforce as technology is occurring in our system. We need to deal with that. We need to find a way to ensure that Australians have secure, well-paid jobs so that they can function and have confidence in their own investments and in their own family life. It's a very serious issue that there are so many Australians in casual and insecure work. This is something the government could tackle. Giving $65 billion in tax cuts to big businesses is not the way to tackle it. It will not do anything to help those workers who are vulnerable in insecure jobs, who are out there working really hard and who are also having their penalty rates attacked. If the government wants to do something about wages growth, cutting people's actual take-home pay is not the way to go about it.

We have seen support from unions for workers in the High Court and the decision that has happened with the Fair Work Commission. On our side of politics, we've said that we would intervene to change Fair Work Australia's essential regulations to make sure that workers cannot have their take-home pay cut. We don't want to see workers who are already in casual and insecure work have their take-home pay cut when they're working unsociable hours on the days that other people don't want to work—the days that other people want to spend with their families. How is cutting their pay going to help the economy? These people are often 100 per cent consumers: everything they earn, they spend in their local economies, which creates jobs. I don't understand why the government wants to continually attack workers on the one hand, while, on the other hand, saying that, if we give big business a tax cut, we'll end up with more jobs for the workers. It just doesn't correlate.

Trickle-down economics has failed in the past. I don't understand why the government is so attached to it and why it thinks it's going to work in this instance. I really cannot see why the government is so attached to this big-business tax cut. I'm curious as to whether it thinks it's going to be able to get it through the Senate. Of course, we don't yet know what sort of deals it's doing to try and achieve that. Clearly, there are some issues, and the crossbenchers and Labor in the Senate have stated our position on this bill. We don't believe that big business needs this tax cut, and we don't think it's affordable, given Australia's current financial position. We have said very clearly that there are other priorities, such as investing in education and infrastructure. We've said very clearly that we have our own plan for a fairer tax system that ensures that Australians who are doing it tough are rewarded, not given the tax increase that the current government is proposing for ordinary workers who earn more than $21,000. We have a completely different plan to the government's.

It's interesting when you go out and talk to constituents, because constituents are awake to this. You go to any town hall meeting, community meeting or mobile office in your electorate and the constituents are really concerned that the government is continuing to pursue this big-business tax cut. They know it's the wrong priority, and I'm amazed that some of the backbenchers on the government side, particularly those who are sitting in marginal seats, are not telling the Prime Minister and the senior ministers this. I'm amazed that they are not hearing people in their constituencies say that this big-business tax cut is the wrong priority at this time. I would be very amazed if the local member over there doesn't hear it from his constituents. Think about what that $65 billion could do if it were invested in children's education, health or infrastructure. Those things would create more jobs and be more productive for Australia's long-term future than a simple big-business tax cut. That's what my constituents are saying, and I am really surprised that the backbench and the marginal seat holders on the other side are not telling their leadership that this is the wrong priority. Australians know it's the wrong priority, and I'm sure those members are hearing it out and about in their electorates. I would be very surprised if they could stand up in this place and say, 'I have no constituents that are concerned about whether this $65 billion tax cut is a good idea at this time.' I would be very surprised if their constituents aren't saying, 'That's the wrong priority.'

If you're going to give $65 billion away, don't give it to big business; give it to the little people. Give it to the workers. Give it to the kids in the schools. Give it to the patients in the hospitals. Spend it where it's really needed. This is not where it's really needed, and it won't make a big difference to these businesses at this time. As I said, many of these businesses don't pay the full tax rate anyway. Many don't pay the amount of tax that we believe they should and some are paying zero tax. We know that is not right. We need a fairer tax system for Australia, but this is not the way to go about it. It can be done in a better way, and the government should abandon this idea and do it properly.

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

I rise to speak about this bill and to support the previous speaker's comments. She explained very eloquently and made quite clear why we oppose this bill, the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017—otherwise known, as I would call it, the '$65 billion tax cut for big business at the expense of pensioners, families and working people bill 2017'. That's what it should really be called. The bill has already been rejected by the Senate—the Senate has already looked at it and rejected it—yet here we are again with the government trying to ram it through.

As we've heard in this place, during question time a couple of months ago the Leader of the Opposition asked the Prime Minister what the full cost of the company tax rate cut would be. We heard three different figures over a couple of days—or in one day or whatever it was. One figure was $24 billion—that would be the cost of the company tax rate cut plan. Then we heard $26 billion—a difference of $2 billion. Then we heard a third figure: $50 billion. Then, when asked again, the Treasurer said $36.5 billion. So we had four different figures of what the cost will be. But, then again, what's a few billion between friends? What's a few billion between some of the Prime Minister's big-end-of-town friends?

Today in this place, we talked about electricity prices—an issue that affects all of us and every Australian. We know that bills are skyrocketing—they're through the roof. People are struggling to deal with huge increases under this government's watch—under the five years that this government has been in power. The average household is spending over $2,000 a year on electricity, and the government is throwing its hands up in the air and saying, 'Call your provider; get a better deal,' 'Nothing to see here; we have no role,' 'Blame the states; there's nothing that we can do,' and 'Blame the former Labor government that was in five years ago'—soon it will be six.

The real issue here is that, when mums and dads, working people, are calling for something to be done on energy, we have a government that's not willing to take any action to bring down prices. But, when the big end of town—the big multinationals, the big, big businesses—call the Prime Minister or visit Kirribilli, with the champagne flowing, and ask for a tax cut, the government says, 'Sure; yes, we'll hand it over. Here you go; here's $65 billion. Let's take it away from the pensioners, from the low-income workers, from health and from education'—and that's just to name a few. How unbelievably out of touch is this government—when you're giving away $65 billion to the richest people in this nation?

This brings back some memories for me. When I was here in 2006-07, the Howard government listened to the big end of town and the same thing took place. They listened to the big end of town and tried to pass an outrageous bill for working people. That was Work Choices. We on this side all remember Work Choices. This reminds me of that. You can just see it: the richest people in Australia knocking on the former Prime Minister's door and saying, 'Give us a break. Get those working entitlements out of the way so that we can make more money'—and off he went and did it. This is the same thing. The Prime Minister is listening to the big end of town—the billionaires—and giving them exactly what they want. Back then with Work Choices, it was a cut in employment expenses for the corporates at the expense of working people of Australia. Well, we all know what happened back in 2007. The people of Australia did not like it. They were offended by it and they fired Mr Howard, and Labor restored the wages of our hardworking constituents, who were not listened to by the former Liberal coalition.

This isn't about small businesses that employ millions of Australians. We need to do more to support those small businesses and do as much as we can for them to help them survive and ensure that they are able to employ people. This bill is about the greed of corporate Australia. This particular movement is about the corporate greed of Australia, and they certainly do not need a handout. They certainly do not need a handout when there are people out there struggling to get a job and people wanting an education. We see what's been done through cuts to universities in the last 12 months. The big end of town do not need a handout. Let's support small businesses. Let's support the small businesses that employ many, many people. I've got some great start-up businesses in my electorate of Hindmarsh that I visit, as well as some established small businesses, that really need a hand up or some assistance. Let's help them. Let's look at the facts in this bill. The facts are one per cent economic growth in 20 years time. We're going to get a benefit of one per cent in the economy in 20 years time and, for workers, a $2-a-day increase in wages in 20 years time. We're going to take $65 billion out of the budget—and we really don't know what it will cost, because there are four different sets of figures—to get that miniscule one per cent growth and a $2 increase for workers in 20 years time.

This is at a time when wage growth has flatlined, with record lows of 1.9 per cent currently. This is also at a time when the government has supported penalty rate cuts from July this year. So we have big, big benefits to the top end of town, giving them massive tax cuts, handing over many, many billions of dollars, and there is no action on reversing the cuts to penalty rates for people who absolutely need those penalty rates because they work on weekends. It could mean the difference between putting food on the table and paying their energy bills. On top of this, the government expects workers on incomes over $21,000 to pay higher taxes.

The government are telling the big end of town, 'We will give you $65 billion,' but at the lower end, where people really need some assistance and help, anyone earning just over $21,000 will be expected to pay more. So they are telling people who cannot afford it, 'We're going to squeeze more out of you so we can give to those who can afford it the most.' Obviously, not much for our millionaire class. This has to be a criminal act. This is wrong. How does the government expect to get away with this? How do government members expect to go to their constituents and say, 'You're going to pay more tax, but we're going to let the multinationals, the big companies, some who pay zero tax, off the hook and we're going to give them a bigger tax cut'? That's what those opposite are going to have to say. To be honest, I don't think that many members of parliament will be able to do that. The public are listening. They know. They're watching their hip-pockets, and their hip-pockets are empty. Let's not forget, the previous member spoke about university students and universities having to deal with huge cuts to their budgets.

We all meet with constituents, and so do I in my electorate office in Glenelg, and I meet with people who are struggling to make ends meet and struggling to find jobs. I meet with parents who want to find jobs for their kids and are concerned. These people need assistance. But, no, we're going to make them pay more tax. If I didn't win the last election in Hindmarsh, I seriously wonder how the former Liberal member would be able to look these people in the eye, people I see every day, and explain why the government is giving millionaires a massive cut, yet taking away from the people who come to our electorate offices for assistance. How can you justify the old, failed trickle-down economics? This is what it is: it's trickle-down economics. 'Let's handover shovels full of dollars to the multinationals and big millionaires and, hopefully, a little bit of it will trickle down.' It hasn't worked, it doesn't work, and we know it won't work. This proposed tax cut is insane. It's constituents like the ones I speak to that give me the strength in this place to stand up and fight against bills just like this one. What makes me so angry is that the government is willing to get out the chequebook for the fat cats, but not when it comes to supporting manufacturing workers—manufacturing workers in Adelaide who have been done over with the closure of Holden. What we've been saying is that manufacturing workers in Adelaide need help. We need help to support those people with targeted assistance during a period when Holden is closing down, and again in 2013 those people needed help. GMH should have been targeted with assistance during a period when the Aussie dollar was quite high and was hurting them. Where was the government then? All we had was a Treasurer that came out and goaded them out of town. He basically gave a speech that scared the pants off them, and they ran off.

There were ways of keeping Holden in Adelaide, in the northern suburbs, which would have continued to employ people. But this government was not interested. They were not listening. As I said, the only people they've listened to is that higher end of town, like at Kirribilli House while the Prime Minister's having champagne with them. But he will not listen to working people. I tell you: they've been missing in action in South Australia, especially when it comes to manufacturing. We also hear from those on the opposite side of the House saying that these outrageous tax cuts are essential in order to drive investment. Well, let's look at what the US Congressional Budget Office put out in a paper this year. It said that the statutory corporate tax rate is one of the many features of the tax system that influence corporate behaviour, and that is because of the broader scope. They say:

… average and effective corporate tax rates are better indicators of a company's incentives to invest in a particular country than is the statutory corporate tax rate.

The paper goes on to point out that, at a headline rate of 30 per cent in 2012, the average rate for Australia was 17 per cent and the effective tax rate was 10.4 per cent.

Let's not forget about some of the great Labor reforms, which mean that every domestic payer of corporate tax, in effect, gets it back. We actually refund our corporate tax to our domestic investors—something which is unique around the world and is often not talked about. We see a government that is completely out of touch. We see a government that listens to only a small portion of the Australian population. It ignores all the communities who are asking for assistance or for help. We saw tax cuts for the big end of town and a tax increase for those earning over $21,000. We see cuts to pensions and we see cuts to education. We see cuts to health and we see cuts to universities. And, at the same time, it's okay for the big end of town to receive massive dollars in tax cuts.

But you don't need to take my word for this. Take the word of the assistant governor of the Reserve Bank. She dismantled the idea that you need this massive tax cut to drive down investment. She said:

When businesses make decisions about where to locate – the tax rate does presumably matter, but so does the business environment, the institutional framework, the rule of law, the macro-economic outlook and where the resources are.

… … …

There's a broader business environment to consider and those advantages haven't gone away.

The government has absolutely failed on economic leadership and economic management. The Treasurer is failing in his job to leave this country in better shape than when he arrived. The Treasurer needs to understand that the age of entitlement should be over for the big end of town.

So much for the importance of the so-called 'jobs and growth' agenda that this Prime Minister ran on. All we heard was 'jobs and growth, jobs and growth'. We've seen higher unemployment rates, hardly any growth and the lowest wages growth for many, many years. How do you expect your economy to be fired up and to work when wages are stable and not going up at a reasonable pace? (Time expired)

Federati on Chamber adjourned at 19:29.