Jim Molan (NSW, Liberal Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill, but I am about to do a very brave act in that I'm doing it directly from an iPad. So if the South Australian power situation changes in any way, shape or form, I maybe in big trouble! This bill complements stage 1 of the government's plan to reduce the company tax for small to medium companies. It's worth going through the enterprise tax plan part 2 detail. It's very important that we understand the detail, because so many of the comments that have been made so far have ignored the detail of the bill and have equated things that cannot be equated. As we transition from the mining investment boom it is vital that we give businesses every opportunity to invest, to innovate, to grow and to employ more Australians. This government wants to give all hardworking Australians the opportunity to earn more and be rewarded for their efforts.

This tax plan is a critical step in our economic transition as we look to encourage private investment across the economy to generate broader based economic growth. The legislation currently in parliament is designed to deliver the remainder of the government's plan to cut company tax. It follows the passage of legislation in May 2017 to cut company tax for companies with an aggregated turnover of up to $50 million. This is a good start. It helps around 3.2 million businesses employing over 6.5 million workers. But we can't stop there. We must continue this process. While the cutting of company tax for companies at $50 million is a really good start, Australia must continue with the second stage. That's what we're talking about here—the second stage of this reform to make the nation's company tax rate internationally competitive. If we fail to do so, we will be effectively applying a handbrake on the growth of some of our most innovative businesses. It would be a truly perverse outcome if the reward for a firm growing and going over the $50 million level were for it to suffer a tax penalty—that's just bizarre. That's why passage of the full enterprise tax plan is absolutely necessary.

Under the plan, the turnover threshold to qualify for a lower tax rate will be progressively raised to cover all companies by 2024-25, before the company tax rate is reduced to 25 per cent for all companies by 2026-27. This is not something which sits by itself. It's not something that you can look at and criticise on a single basis. It fits into the government's economic plan. The government has delivered substantial reforms designed to put more money into people's pockets in a number of different ways; for example, in energy, in school funding, in child care, in medicines and in the small-business tax cuts that we've spoken about, which have been successful or are about to be successful. By doing this, the government is ensuring that you have more money in your pocket and your cost of living is lower.

As we have said, these corporate tax cuts exist in the context of a broad economic plan. They're just one part of the plan. Certainly, when the budget can afford it, we want to provide income tax relief to individuals and families, and that's the complementary side of what we're talking about today. The government are committed to keeping taxes as low as they possibly can be, because we have to deliver, and we will continue to deliver, activities that reduce the burden on families and ensure that Australians retain more of the money they earn. We've seen chief executives such as Alan Joyce and Andrew Mackenzie call on the Senate to pass the business tax cuts. They understand that pledging a lower tax rate will lead to more jobs and higher wages. These are some of the biggest employers in Australia.

Reducing the corporate tax rate would make a strong contribution to Australia's economic growth, which is vital for generating the next wave of productivity in Australia. The contrast with Labor is clear. Labor stand for higher taxes in every way that they possibly can. Their plan is to slug Australians with something like $150 billion to $200 billion in new taxes, including taxes on housing, electricity, income, small business and investment. We've even heard, unfortunately, the Leader of the Opposition, who seems to have declared war on businesses, say that businesses should expect nothing from a Shorten Labor government. Eighty-six per cent of Australians are employed by private businesses, so the Leader of the Opposition, Mr Shorten, has declared war on the businesses that employ the overwhelming majority of Australians, and that means he's declared war on jobs. It's very sad that we no longer have a degree of bipartisanship on tax, something which I suspect has been sacrificed on the altar of politics and not on the logic of economics. We, as a government, have an obligation to carry this country from the prosperity of the mining boom days through the prosperity which is being maintained today into Australia's future, and Australia's future must be a prosperous future. The most important thing that any government can do is create the conditions for an economy that produces prosperity for each and every one of its citizens.

I've spent a good deal of my life in countries where economies don't work. The biggest problem that exists in these countries is quite often one of corruption. Corruption is quite often caused by the fact that such countries do not have an effective tax system. People see corruption in many of these countries as a form of taxation that just does not go through the government.

We cannot afford to take ourselves back in any way, shape or form to a situation where there is not enough finance being raised for the government to do the good things that government can do. The first start of this tax reduction plan was a good start. On my travels, I've met small-business owners and operators who anticipate benefitting from these tax cuts and who can now spend more on what they do, which benefits the entire community, and they can employ more people—as they are in fact doing. One of these operators was anticipating growing his company, over the next couple of years, over the current $50 million aggregated limit. If Labor and the Greens had their way, he would then be penalised. This is a bizarre consequence of how you would reward people for innovation, hard work and being successful.

The point of this bill is to lower tax on all companies progressively, as I described previously. This is a good plan and it is a good bill by itself. But, given the international situation of nations across the world reducing corporate tax, it goes away from just being a good thing to do to being absolutely essential. We know that one of the most important aspects of prosperity is the creation of jobs through trade deals, which this government is proud of and has engineered over a long period of time. This tax plan is a good plan, while Labor and the Greens have offered us no plan at all but to leave taxes high, or to increase taxes so that they can spend more.

Trickle-down economics has worked. Regardless of where it comes from, it has happened over the past and it has made this an extraordinarily prosperous country. This is not a neoliberal economics concept. It's not something which has been made up by anyone. It is basic Economics 101, and we see it in this nation in the jobs that have been created in this country.

The Greens have described their total and absolute opposition to economic policy in such unsophisticated terms as 'crappy'. They say that we are giving away $65 billion to the big end of town. They've put their opposition to the bill in terms of corporate versus the battlers; that there is no connection between company tax and wages; that we favour fat cats or we favour nurses or teachers—I'm surprised that police somehow didn't get into this strange combination. This is appalling class warfare. It's a denial of the benefits that the economy has conferred on this nation for many, many years. Money, prosperity and happiness apparently come from the fairies at the end of the garden, as a previous speaker has said on a number of occasions.

The concept has been put to this chamber that we should be spending a similar amount of money on transport. That's fantastic. We would certainly be able to move everyone everywhere, except there would be no jobs for anyone—but, of course, we could always get to the Greens' rallies on time. Someone's got to create the wealth, and wealth is created by successful companies and individuals, with the workers able to be prosperous as a result.

What is not the way to create wealth for all in our society is by becoming internationally uncompetitive. What is not the way to create wealth is to attack entrepreneurs and employers in some form of class warfare. What is not the way to create wealth is by denying jobs to workers who then spend. Class warfare seems to lead directly to the kind of undergraduate socialism that we so often see mentioned in certain areas. What direction should we be going in? We should be aiming for a prosperous nation based on an effective economy which is internationally competitive.

Australia has always been dependent on overseas investment, ever since its colonial past. We have achieved extraordinary results—truly extraordinary results. We see the prosperity built on a nation which has something like the 12th-largest GDP in the world. For a country of 24 million people, what an extraordinary achievement this has been.