Ian Macdonald (Queensland, Liberal Party) Share this | Hansard source

This is a debate, so can I start by referring to the previous speaker, and can I say that, in my long years in the Senate, never have I seen a government of the Liberal and National parties ever adopt an economic policy of the Greens political party. At least Senator Rhiannon, who's just been tossed off the Greens ticket, acknowledges this. She is an advocate of the communist philosophy and policy, and I have to say, most of the Greens political party are people who follow the ultra-left-wing socialist approach to economics, and such is their right. But, of course, world history has shown that it simply does not work. Just have a look at Russia and the communist philosophy there. It didn't work. They got rid of it. Have a look at China. It is allegedly still a communist country, but all of their economic policies are pro-market, pro-capital policies, because the socialist policy that the Greens political party always espouse simply does not work.

I will go through and expose a number of the myths that you've just heard from Senator Whish-Wilson—myths that the Greens political party keep trying to propagate and keep trying to scare the schoolchildren with. And you did scare them, Senator Whish-Wilson—they left the chamber!

Those myths are just that—myths—and I intend to expose just those that I have time to do.

First of all, can I set the scene? In Australia—we're a relatively new Western country; we've only been going a couple of hundred years—every investment that has made Australia the great country it is has effectively been a foreign investment, one way or the other. There is money circulating around the world. Companies around the world, people with money, look around the world and say, 'Where can we invest our money?' Fortunately, over the years, particularly in the fifties and sixties under the Menzies Liberal government, a lot of people invested their money in Australia, as a result of which we built new factories, we built dams and we built new businesses, and all of that new activity created jobs and prosperity for Australians. We got to the stage where Australia's standard of living was amongst the highest in the world. We got there because of our economic activity, because of good government in the Menzies years and because people with money overseas, who wanted to invest, invested in Australia, building Australia and creating jobs.

You don't have to be terribly clever to work out that if you've got money to invest in Australia then you look around—you look up all the banks; you perhaps ring your stockbroker or financial adviser—and say, 'Where can I invest my money so that I will get the best return for my money?' Of course you do that. We all do that. Why wouldn't you do that? That's what people with money around the world do; they look around and say, 'Where will we invest our money so that we can get the best return for us?' They say: 'In Australia you pay corporate tax rates of 30 per cent, but if you go to France you can get tax rates of about 20 per cent and falling. If we invested in the United States we'd get tax rates of 15 per cent. So why would we bother investing our hard-earned money in a country which is going to tax us more than anyone else?' It's a matter of simple common sense that people who invest, and invest in productivity, are going to go where they get the best return. The communist philosophy doesn't like that because the communist principle is that all business is bad and capital is bad. But we've seen what's happened with the communist philosophy in the past: it simply does not work. People with money want to invest where they get a return. People don't have a particular penchant for Australia. They will go where they get the best return, and of course that is where the corporate tax rate is the most relevant and the best from their point of view. It's a matter of common sense. I can't understand why people are even concerned about this.

I will quote a prominent Australian—I was going to say 'distinguished', but that's not right—who said this about tax rates:

Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

That's a quote. Let me ask you, Madam Deputy President: was it perhaps from Malcolm Turnbull? No. You're wrong if you said that. That quote came from Mr Bill Shorten in the House of Representatives on Tuesday, 23 August 2011. I'll repeat it. This was Mr Shorten:

Cutting the company income tax rate increases domestic productivity and domestic investment.

Correct, Mr Shorten! You were once right. He went on to say:

More capital means higher productivity and economic growth and leads to more jobs and higher wages.

Right, Mr Shorten! You were right a second time. I assume that, because of that, Mr Shorten and his team opposite us will be supporting this proposal from the current government, which does exactly what Mr Shorten was advocating.

Here's another quote, if I could just take the time of the Senate:

Lowering the corporate rate for smaller businesses only [as the Greens propose] creates an artificial incentive for Australian businesses to downsize—

that is, go down—

In worse case scenarios some businesses might actually lay people off to get smaller—and the size-based different tax treatment would create a glass ceiling on business workforce growth. Instead we want a level playing field regardless of the size of the company.

Again, I could ask 20 questions: was that Scott Morrison, was it Malcolm Turnbull or was it Senator Cormann who said that? No, you'd be wrong. That was said by none other than the Leader of the Opposition, Mr Bill Shorten, in a speech to ACOSS in Melbourne on 30 March 2011. If you needed any evidence, any argument, those two quotations from Mr Shorten actually sum it all up.

Can I just digress a fraction. I was recently involved in the Senate Select Committee on the Future of Work and Workers. In a one-line explanation, this committee's inquiring into what will happen in Australia in 10, 20 or 30 years time. A lot of the jobs which we currently have in Australia are now done, effectively—this is my terminology, not the technical terminology—by robots. So, what are the rest of us going to do in the not-too-distant future?

I was absolutely blown away by the evidence of Mr Michael Cannon-Brookes, who leads a company called Atlassian. He was talking about other things, but what impressed me about Mr Cannon-Brookes's evidence to the committee was how global we are all are the moment. The jobs in Australia are the jobs anywhere else, and we can do them in Australia, given the right scenario. This is a company which started not long ago with a couple of people—a couple of innovators. They were young people who had an idea and started this business in Australia. Mr Cannon-Brookes said to us that the company manufactures software and helps teams collaborate and communicate better in their workplaces. He said:

We currently have 110,000 enterprise customers in over 160 different countries—

This is an Australian born and bred company, and, remember, a couple of years back they started with just the two of them. He went on:

We employ 2½ thousand staff in 10 different offices, more than a thousand of which are in our Sydney headquarters, and have won 'Best place to work in Australia' two years running

Mr Cannon-Brookes was not particularly talking about tax cuts, but his evidence to the committee indicates just how tough it is to do business in Australia if we have rules and regulations that make us worse off than our competitors.

In this instance he was talking about skilled migration, but the same applies to the tax rate, so I'll just read a couple of words from what Mr Cannon-Brookes said:

So let's talk about skilled immigration. The lack of access to experienced global talent is the single biggest factor constraining the growth of the tech industry in Australia. From my view, we think about skilled immigration completely backwards. We focus on overseas workers taking jobs from Australians, and, in high export industries like mine, it's just not the case. Highly skilled experienced migrants are job multipliers at Atlassian. For every one senior person we import, we can hire many, many more around them. Their experience spreads to tens of other employees close to them in the organisation. It is absolutely invaluable to me.

He then went on to complain about some of the recent changes to the 457 visas, and that's a matter that the government should look at. I know the government's been pushed into 457 arrangements that aren't quite suitable because of demands from the unions and the Labor Party. We haven't got it right. He goes on to say:

Our future success depends on our ability to attract the world’s best tech talent … today. To unlock the huge job-creating potential of tech companies in Australia, we need to change the way we think about skilled migration. The government should be helping local companies attract world-class employees, not close the door in their faces.

As I say, this is not actually germane to this bill but it gives an idea of how an innovative company like this understands that we have to compete with the world and of the sort of rhetoric you get from the Greens political party about immigration taking away Australian jobs. You can see from a guy who's at the coalface that that is simply not the case.

It's the same with corporate tax. Sure, every country in the world would like to tax corporate profits by 50 per cent or perhaps even 100 per cent. But you have to be real. In fact, Senator Whish-Wilson rightly says that Australians ignore reality. I'm afraid he ignores reality. To remain competitive we have to be competitive in the tax rate that we charge corporations. I did want to go through all of the myths that Senator Whish-Wilson and Senator Cameron before him had spoken to the Senate, but I'm going to run out of time. Let me just deal with the first one, which was that Australia cannot afford company tax reform. This is just plain wrong, and contrary to the facts. Our business tax reform is fully costed and it is reflected in the government's budget forecast and projections, which show that the budget will return to surplus in 2021 and will remain in surplus over the medium term.

For members of the Labor Party, and for members of the Greens political party who supported them through those horrible Rudd-Gillard-Rudd years, I should pause a minute to explain what a budget surplus is. Within six years, Labor, supported by the Greens political party, took Australia's bank account from effectively $60 billion in credit—that is what the Howard government left when it left office in 2007—to something like $250 billion in deficit and heading towards $700 billion in deficit. The Labor Party and the Greens' great economic policies—the same as the old communist regime—took Australia from having $60 billion in the bank, in the kitty, to a deficit approaching $700 billion. It was borrowed from foreign lenders, to whom who we had to pay interest equivalent to the cost of a new hospital every day. This is the economic credibility of the Greens political party and the Labor Party!

We are heading towards a surplus. These are Treasury figures, and we know that will happen. The budget is forecast to be in surplus by the time the company rate under this proposal is reduced to 27.5 per cent for companies with a turnover below $250 million, and is projected to have been in surplus for six years before the company tax rate eventually reaches 25 per cent for all companies. In response to the claim by Senator Whish-Wilson and Senator Cameron that Australia can't afford this, these reductions come in over the next five to 10 years. In that time, the surplus will be real. The Australian budget will actually be in surplus so, yes, we can afford it. We're only bringing ours down to 25 per cent at this stage. It's still not competitive with America and France and Britain. In fact, all of the other developed countries of the world and many undeveloped countries of the world have a tax rate that will be even lower than that. But at least it's heading in the right direction, and it will make investors think seriously about investments in Australia.

The opposition, the Labor Party, are proposing to save the cost of the company tax cuts if they are not proceeded with. But they've already committed the entire fiscal cost of those company tax cuts, and more, to increases in expenditure. So Labor say we can't afford these tax cuts, and yet they've already announced that they're going to spend more than those tax cuts would have cost on other expenditure—which socialist governments like the Labor Party and the Greens are always prone to doing. It's easy to give away someone else's money—it's not their money; it's the taxpayers of Australia's money. It is very easy to rock up to some place and say, 'Yeah, we're going to give you a pocketful of money,' and people say, 'Gee, isn't that good.' But someone has to pay for it. And who pays for it? The ordinary taxpayers of Australia—the hard workers who go to work every day, work diligently and pay their tax, which the Labor Party and the Greens then just want to give away for anything that might increase their vote. It's not the way to run a country. It's not the way to run an economy.

It's a matter of record that, at the 2016 election, the Labor Party promised a worse budget bottom line than the coalition over the following seven years, despite locking in a higher tax rate of 30 per cent for all businesses with a turnover of $2 million or more. That, as a matter of logic and simple arithmetic, is just wrong. The opposition cannot simultaneously direct tax cuts towards other priorities on the spending side of the budget and argue that they are unaffordable. That's the illogical argument that you're getting from Senator Cameron, and no doubt other Labor speakers.

There are other myths that have been created by Senator Cameron and Senator Whish-Wilson that I would like to have time to dispel, but I'm sure my colleagues who follow me in this debate will do so. Can I simply conclude by again quoting a prominent Australian on these figures—and I repeat these words because they are so germane and so accurate:

Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

Would you believe—you do know, because I've said this before, but you'd struggle to believe—that those words came from Mr Bill Shorten, the Leader of the Opposition. I certainly hope that he and his colleagues follow those words now.

(Quorum formed)