Slade Brockman (WA, Liberal Party) Share this | Hansard source

You're taking your economic knowledge from the Labor Party, are you, Senator Hanson-Young?

The third myth I'm going to deal with is that Labor can pay for their promises by not cutting company taxes. Labor themselves revealed the myth of this through their policy of a tax increase on pensioners and self-funded retirees. As I've said, the cost of the enterprise tax plan was included in the 2016 budget, which delivered a net improvement to the budget bottom line as a result of government decisions. At the last election, Labor promised to spend all of the funds set aside for tax cuts. They did this and still managed to rack up additional deficits of $16½ billion over the forward estimates. When Labor say they'll pay for their new promises by not proceeding with the company tax cut, they are just not telling the truth. Reversing all of the tax cuts we have delivered will not pay for one additional promise they make.

Myth No. 4—and I probably don't even need to deal with this one, really—is the idea that Labor are in any way supportive of small business. Labor have done nothing over the years for small business. To pay for the promises they made at the last election, they must reverse the $25 billion in tax cuts to small and medium-sized businesses that have already been legislated. Labor have not ruled out reversing tax cuts for small- and medium-sized businesses. They've rejected the idea that a business with a turnover of $2 million to $10 million is even a small business, showing a fundamental lack of understanding of how business works.

The final myth is that tax cuts only help big business—again, this probably doesn't need to be dealt with, because it's pretty laughable really. Tax cuts help all businesses. I was recently with the Minister for Finance, then the Acting Prime Minister, at a business called Legeneering in Western Australia. This is a business that started just a few years ago, in 2005, with three employees. It's managed, through hard work, to grow itself to be a business of around 200 employees. One of its major contracting businesses is Woodside, a business that started a about 30 or 40 years ago with one guy and an idea. That has grown to be a business that employs many thousands of people. It employs, through its associations, around 20,000 people Australia-wide—so there are flow-on effects. There we have businesses that show the interconnection of small, medium and large business. Woodside contracts to Legeneering, Legeneering contracts to smaller businesses in its local area, and the business tax cuts that affect one business flow down and allow medium-sized businesses to employ more people, to grow and to engage in the economy. They, again, are able to source from smaller businesses and continue the movement of that money through the economy to grow the economy, to put people into jobs and to grow wages. That presumably is what everyone in this place—or at least most people in this place—wants to deliver.

The enterprise tax plan fundamentally, at its core, is about Australia being competitive. It is a global marketplace. We do need to attract capital from overseas. We do need to be an attractive investment destination. We also need to be an attractive investment destination for money that is held in Australia. There is a significant pool of investment funds in Australian superannuation today. A lower corporate tax rate makes it more attractive for that superannuation money to be invested into Australian companies as well. We've got to reduce the tax rate to remain internationally competitive. As I've already mentioned, our international competitors—Canada, Singapore, the UK, New Zealand, Norway, Israel, Japan and France—have all reduced their company tax rates in recent years. The US obviously has made a huge change to its company tax rate. We cannot remain stranded at 30 per cent for the majority of businesses, for larger businesses. We must begin a transition to a lower corporate tax environment to maintain our position as an attractive investment destination; to retain our position as a world leader in terms of our economic growth and our ability to provide good, high-quality jobs to the Australian people; to see our wages grow; and to see jobs and investment flowing to this country rather than everywhere else.

The international tax scene has changed over the last few years, and Australia has to respond to that. We cannot bury our heads in the sand and pretend this isn't happening. The government's enterprise tax plan is a responsible course of action. It's in the budget. It's been in the budget since 2016. We've now seen five budget updates where the return to budget balance has been over the same time frame. It can be relied upon. We've also seen Treasury modelling—which Labor particularly used to pay attention to—that said the tax cut would increase the size of the economy by around one per cent. That's a permanent boost to economic growth, it's a permanent boost to jobs and it will result—and everyone knows this—in higher wages as a result of more investment.

Senator Hanson-Young interjecting—

And anyone who laughs at that really reveals how little they understand of the economy. A more competitive business tax environment encourages a higher level of investment in Australia for businesses large and small. It will benefit all hardworking Australians through increased employment and wages in the long run.