Chris Ketter (Queensland, Australian Labor Party) Share this | Hansard source

I rise to address the question Senator Cameron asked of Senator Brandis. We are talking about taxation policy—capital gains tax in this instance. The coalition likes to trot out on a regular basis the mythology that they are the more competent economic managers and that Australians can feel more confident in relation to tax with the coalition. I made a contribution in taking note of answers yesterday, where I have attempted to put the facts on the table when it comes to profligate spending. The IMF has quite clearly illustrated that it was under two periods of the Howard government that needlessly wasteful spending occurred.

When it comes to the level of taxation, the government likes to trot out this notion and mythology that they are the lower-taxing government. I noted that last year Mr Stephen Koukoulas, a well-known economist, put some facts together in relation to the figures concerning the top 10 years of tax-to-GDP ratios since 1980-81. It might surprise the senators opposite to know that eight of the top 10 years of tax-to-GDP were under liberal governments: 2004-05, 2000-01 et cetera. An even more extraordinary fact was that of the 10 lowest tax-to-GDP ratio periods under governments of either persuasion, all 10 of those periods were under Labor governments. Labor, in fact, has the record of having a lower tax-to-GDP ratio.

We look at taxation as being fair and we want to see fair outcomes for people, so we want to look at the taxation system as a whole. Once again—and I have made this point regularly—when it comes to holistic reform of our taxation system the coalition squibbed that. Prime Minister Abbott initiated the process of an orderly review of our taxation system, the issue of a tax white paper. Prime Minister Turnbull came in and scrapped all of that, putting aside all of the submissions that were put to the government and to Treasury. All the work that was done to look at the tax system just disappeared.

My colleagues have talked about the fact that we have a government here riven by internal division in respect of this issue of capital gains tax. We are witnessing a slow-motion train wreck on this government's watch. Today we heard Senator Brandis talk about Labor's policies regarding negative gearing and capital gains tax—that it would lead to increasing rent prices. The Turnbull government tries almost weekly to mount a weak scare campaign on Labor's housing affordability policy, but cannot agree on whether Labor's policy will crash or increase prices.

Minister O'Dwyer has come out previously on both sides of the fence on this particular issue. She has argued that housing affordability is an issue that can be dealt with in a couple of different ways. We saw Treasurer Scott Morrison turned inside out over the reform of negative gearing. He has argued that there are excesses in negative gearing, but he has been rolled in cabinet, with the Prime Minister pushing for reform of negative gearing. And there was at House of Representatives Economics Committee report on home ownership that produced no recommendations.

We know that the government is very divided. We know that high-profile Liberals like Mike Baird, Rob Stokes, Jeff Kennett and federal Liberal backbenchers have also called on Prime Minister Turnbull and Mr Morrison to consider reforms to negative gearing. Last week the IMF called on the Australian government to reform the capital gains tax discount. It argued:

The [Commonwealth] tax system provides households with incentives for leveraged real estate investment that likely amplifies housing cycles.

So there we have it: the official verdict on that.

We know that this is ideologically driven madness, which we have seen time and time again from the coalition. They are looking at cuts to family payments, cuts to Centrelink, cuts to Medicare and cuts to community legal centres— (Time expired)