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

I rise to speak on this matter of public importance, the need for the Turnbull government to provide economic leadership to make the tax system fairer, fix the budget in a fair way and address housing affordability. Australians look to their federal government to provide the economic leadership needed to address our current challenges, yet we see the Turnbull government letting Australians down. Whether it's budget management, energy policy, penalty rates or housing, we see a government with its priorities in all the wrong places.

I will address each of the three elements of the MPI. When it comes to making the tax system fairer, when it comes to the priorities of the government, it can't be clearer that their budget proposal to increase the Medicare levy is misguided. They claim it is to fully fund the NDIS but, let's be clear, when Labor was last in government it fully funded the NDIS. To be even clearer, a future Shorten Labor government will continue to fund the NDIS.

When it comes to the levy increase, it is dumbfounding that at a time of low wages growth, high cost-of-living pressures and the government already presiding over a cut in penalty rates for low- and middle-income workers the Treasurer is prioritising an income tax hike for those same workers. Mr Turnbull's tax increase means that a worker on $55,000 a year would pay $275 extra a year in tax, while someone on $80,000 would face an extra $400 in tax. A worker earning $85,000 a year would lose the full benefit of last year's 'sandwich and milkshake' tax cut and actually end up paying more in income tax. When it comes to multinationals paying tax, we see a government failing to take strong action to make the system fairer.

It's not fair on everyday Australians or on proper taxpaying companies that other companies can use sharp business practices to evade their proper share of tax. I have been looking into this matter in the Economics References Committee's corporate tax avoidance inquiry. Of the $4 billion in liabilities raised by the ATO, which the government loves to talk about, we see that it's actually Labor legislation that is being applied—legislation that the coalition voted against. There's more to do in terms of closing loopholes and increasing transparency, and I call on the Turnbull government to adopt Labor's multinationals tax policies to make the system fairer.

I also want to briefly mention the recent announcement by Labor to make sensible reforms to discretionary trusts. It shouldn't be the case that there is a two-tier tax system—one for ordinary Australians and a business class tax system that lets you minimise your obligations if you have a high income. There should be one system, one that's fair for everyone. A 30 per cent minimum tax rate on discretionary trust income splitting is a sensible move to make the tax system fairer.

When it comes to fixing the budget, let's also be clear: Labor understands that there is a need to fix the budget, not just over the forward estimates but over the medium term as well. In this term of parliament Labor has been very constructive when it comes to fair budget repair. Whether it was the measures in the omnibus bill or measures such as the bank levy, Labor has scrutinised the Turnbull government but worked constructively to repair the budget. You can also see from Labor's tax policies that we are strengthening the budget in the medium term. Negative gearing, capital gains tax and discretionary trust reforms all strengthen the budget in the medium term. And we're looking further ahead than are the government, who seem fixed on trying to make the numbers look good just over the forward estimates—when they're not preoccupied with themselves. When it comes to budget repair, priorities don't get much bigger than the company tax cut. It's now a $65 billion—not $50 billion—ramraid on the budget at a time when there could be more productive investments in areas such as infrastructure and education. When it comes to budget repair, you can't trust this government. Only this side of the chamber has a credible plan to properly repair the budget in a way that's fair and in a way that aligns with our values and priorities.

I will now turn to the very important matter of housing affordability. This issue just seems to be worsening, yet the government seems to be doing little on this matter. Even in recent times the Committee for Economic Development of Australia has raised concerns that affordability issues might persist for as long as 40 years. A survey by law firm Slater and Gordon found that 26 per cent of 16- to 24-year-olds need to rely on an inheritance from their parents before they can buy a home. Home ownership is getting out of reach. The HILDA survey shows that for couples with dependent children home ownership fell from 55.5 per cent in 2002 to 38.6 per cent in 2014. Home ownership rates have also collapsed for under-40s, from 35.7 per cent in 2002 to 25.2 per cent in 2014.

We also see the links between housing affordability and inequality. Again, the HILDA survey found that among men aged 18 to 39 homeowners earn $87,182 whereas non-homeowners earn $41,832. The reason young people aren't renting is not alleged lifestyle choices; they are being locked out of the market. And what do we see from the Turnbull government? We see a threadbare housing affordability policy announcement in the budget. We still haven't seen the legislation, and it's now September. The Treasurer does not seem to see it as a priority, yet Australians are entitled to information so that they can make an informed decision about whether to access it or not. The super scheme will do nothing to address housing affordability but will instead work to undermine Australia's world-class superannuation system, and Labor will not support it.

Labor has sensible policies to address housing affordability, including negative gearing and capital gains tax reform. That's well known. There are also other policies that the shadow Treasurer has announced, such as prohibiting direct borrowing by self-managed superannuation funds, the introduction of a uniform vacant property tax across all major cities, an increase of foreign investor fees and penalties, the establishment of a bond aggregator to increase investment in affordable housing, boosting homelessness support for vulnerable Australians and, importantly, getting better reform through housing agreements with the states. It's a comprehensive suite of policies that can meet the challenges Australians currently face.

When we're talking about tax, I can't miss the opportunity to once again bust the mythology that those opposite have that theirs is the party of low taxes and responsible spending. I am indebted to the research done by Stephen Koukoulas, who shone a spotlight on this matter. He showed that eight of the 10 years since 1980 with the highest level of tax-to-GDP ratio have been under coalition governments, and all 10 of the 10 years with the lowest tax-to-GDP ratio have been under Labor governments. That busts the mythology about those opposite being the party of low taxes. When it comes to responsible spending, the IMF working group busted that myth as well and showed that profligate spending occurred on two occasions under John Howard. In conclusion, the Turnbull government has let Australians down when it comes to— (Time expired)