Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

One suspects that it's nearly curtains for this government. Going into a long break and five by-elections, with talk of an early federal election in the cold winter air, the passage of this legislation may well be part of a final scene in the sordid tale of this 45th Parliament. In viewing this past few years as a performance, it's certainly been no Homer's Odysseyan epic tale of courage, of facing adversity, endeavour and achievements. Nor has it been in any way a virtuoso performance. Perhaps history will judge it more as a Greek tragedy or perhaps a calamity or a comedy of errors, with all the scandals, mishaps and stuff-ups, and at the end of this the showcase of the 45th Parliament and the Turnbull Liberal coalition tax cuts. Maybe if it wasn't so serious it might have been funny. But, whatever you believe it's been, as an elected representative, as a member of parliament, wherever I go I certainly hear no applause for this performance. More likely I see grimaces. And I doubt very much that the Australian people will call for an encore.

What has been revealed in this final scene of the tale? In an election budget full of gimmicks designed to thrill and please, there was one big surprise—a trick of sorts—for the audience. Mr Malcolm Turnbull wants to give you some of your money back, refund some of the cost of your admission to this show—$140 billion in tax cuts, the signature policy of this government, the piece de resistance of this term in government. Is it a trick? Yes, of sorts, and it's a bloody expensive one; it's certainly no cheap trick. Is it a con? Yes. Let me tell you why, and I will expand on these points in more detail in the committee stage. Firstly, the government's claims that these cuts target middle-income earners and would therefore benefit most Australians are wrong. In fact, most Australians won't see any tax cuts at all. The need for these cuts to compensate for bracket creep has been overstated. The key reason propagated by this government—that this tax package will counter bracket creep—has been debunked, torpedoed by many expert witnesses, including the Senate Economics Committee, which I attended. Indeed, some expert witnesses suggested that in the long run it may make bracket creep worse in this country. The government's claim that tax cuts will improve work incentives are totally spurious and without evidence. And it's gender biased. Men will get almost twice the tax benefit as women in Australia. And $144 billion in tax cuts will inevitably mean harsh spending cuts later. Certainly the Greens, and I suspect also others in this chamber, fully understand that there still isn't enough revenue now for those many people who are doing it tough and need those services.

Contrary to government propaganda, Australia is not a high-taxing nation and desperately in need of personal income tax cuts. There is no doubt, from the evidence before us, that these cuts will erode our progressive tax system. I note with interest the language the government's used, saying that the tax system will still be progressive when it's finished. But of course that's ignoring the point that if this legislation gets up it will be a lot less progressive or a lot more regressive than it is now. Regarding one of the great challenges of our time, rising inequality, this legislation will make inequality worse in this country: the rich will get richer and the poor will get poorer, and you cannot dispute that. Everything we do in this place should be run through the lens of tackling inequality—everything we do! This is the biggest piece of legislation we have seen in this parliament in terms of funding commitments, yet it will worsen inequality in this country.

To frame all those things up, this legislation shows that the government's true priorities are protecting the rich and running down the role of government in our lives. These tax cuts will further entrench rising inequality, the great challenge of our time, and to hide that the government is employing a simple bait and switch trick to help sell these tax cuts. There is a little bit of candy to start with—in some instances, for low-income earners, only a couple of dollars a week—and then, in the out years, nearly six to 10 years into the future, those at the top end of the income-earning brackets in this country will take home the bacon. The fact is that most Australians won't see any benefit at all. Sixty per cent of taxpayers will get nothing from the government's top end tax cuts. The majority of the benefits will flow to the top 20 per cent of income earners. The Greens' own Parliamentary Budget Office numbers showed this. More than half of the overall tax benefits will flow to the top 10 per cent of income earners in this country.

This bill makes a choice that successive governments have made in the neoliberal era. I would also lump Labor's history well and truly into that. It is a choice to contract and constrain the ability of governments to provide services and make investments for our collective benefit. Inevitably, this choice is one that better serves individuals with the means to support themselves than it does those who are battling to make a go of it. There is nothing in this legislation for many of Australia's most vulnerable battlers.

If you're unlucky and don't have a job, no work, and if you live in poverty, there is nothing in this legislation for you. That's why the Greens want to prioritise raising Newstart above the poverty line by $75 a week to combat this, and we can pay for it. I note with interest that a significant number of Tasmanians, including in the north-west seat of Braddon, support an increase in Newstart. If you can't get enough work, or if you're a young or part-time worker or a struggling student, there's nothing in this legislation for you. That's why the Greens want to prioritise legislating to raise the minimum wage.

What's in it for the country's highest income earners, who are most likely to be our most wealthy? The answer is: plenty. This bill shifts the 32.5 per cent marginal tax rate up a threshold, firstly to $90,000, then to $120,000, and finally to $200,000. This flattens the tax system. It makes it regressive and skews it to benefit the wealthy. In fact, this is potentially the end of a progressive tax system in this country. It is a full-frontal assault on one of the most important tools we have in Australia for raising revenue. The fundamental concept that if you earn more money you can afford to pay a higher rate of tax is critical for funding services and other things that we need.

Of the estimated $144 billion loss in revenue over 10 years, half will go exclusively to those earning more than $87,000. The Treasurer would have you believe that somehow $87,000 makes you an average worker in this country, but we know that is absolutely not true. Most of the beneficiaries will be men, as I mentioned earlier. For example, the stage 2 shift in the 32.5 per cent upper threshold from $90,000 to $120,000 will cost $36 billion over 10 years. The Greens estimate, using the budget's heroic wage growth forecasts—and they are heroic, given recent history—that the point at which this takes effect will be to the benefit of the top one-third of wage earners, and two-thirds of those are men.

What are the opportunity costs of spending $144 billion on tax cuts and not on other things? To put it more simply, if I ask the average Australian, 'Which would you prefer: would you rather see a few extra bucks in your pocket every week, or would you rather see the government doing its job and investing the $144 billion on your behalf in world-class schools, teachers, universities, child care, health care, law and order and so on?' how would they respond? Would you rather have a couple of bucks a week—$5 maybe, if you're really lucky—or $10, if you're the biggest beneficiary of these tax cuts? If you're a millionaire and you get $7,000 a year in extra income after tax, would you rather have that money in your pocket, or would you rather invest it in the society that you live in and that you want your children to inherit? That's a question that I don't believe anyone has been putting to the Australian people.

What else could we invest that money in as a priority? Have no doubt: the tax debate we are having tonight is about priorities. It is about what you want to spend the money on—$144 billion. What would you spend it on? Perhaps it would be conquering the problem of violence against women, building a proper NBN, fully funding the NDIS or, as I mentioned in the MPI this afternoon, funding a proper threatened species plan to hold back our national shame at having the highest species extinction rate on the planet. Instead, we continue to see more cuts in the environment department and to the threatened species unit. What about an infrastructure revolution, with $144 billion going into building productivity-enhancing infrastructure and all the jobs that would go with that? What about public-good science, especially climate science? Critically, on the responsibility to get on board with the energy revolution needed to combat climate change and transition workers out of coal and into the jobs of the future, $144 billion would go a long way. To neglect these issues is in effect to steal from future generations. If the question were framed in this simple way, I'd be surprised if most Australians didn't express that they would rather forgo the few dollars a week they're going to get than risk not tackling these imperatives or properly funding our services into the future.

To be fair, if you were to put this question to Australian citizens, I'm guessing many would say: 'Well, that's your job: to make the best decision. That's what I elected you for.' So what does the best evidence inform us? I can tell you: no-one's looked at the opportunity costs of investing $144 billion in other things such as infrastructure, action on climate or better services. That's why it's important that we have this debate in the Senate. In fact, there's been surprisingly little public debate on this critical point, and it goes to the heart of whether you should accept or reject this legislation in the next few days.

What the Economics Legislation Committee did hear on this bill is that there is no doubt at all that services will be impacted. You cannot take $144 billion of revenue and not expect that future governments will have to make that up in other areas in the future. You can't have your cake and eat it. So, if you take $144 billion out of the system, expect cost savings and cuts down the line, particularly if this Liberal government is re-elected. I believe the work the Greens have done this week shows that my home state of Tasmania has the most to lose, or the most at risk. For every $1 gained in tax cuts, we have at risk $1.69 in services that we receive.

So why? If you ask the government, they will tell you that these tax cuts are necessary for two key reasons. The first reason is that people will be incentivised to work. As I mentioned earlier, there is no evidence for that at all. The second reason is to tackle bracket creep, but I've also said that committee evidence suggested that that was not going to be the case. This will not effectively tackle bracket creep. So I ask again: why are we having these tax cuts put to us now? The answer's simple: because we're going into an election and maybe it is an appropriate question to be asking why of a politician. As I alluded to at the beginning of this speech, it's about politics, it's about getting elected, it's about political self-interest and it's about holding on to power. When you really think about it, if the best this government can do after its couple of years in office is give a tax cut of a couple of dollars a week to most Australians, when we face so many fundamental challenges to our society, our economy, our environment and our future, it's pretty pathetic.

With these challenges come opportunities, and the Greens are ready to meet those opportunities; that's why we are in parliament. We're not afraid to debate the big issues and meet the challenges and we're not afraid to take a strong view on legislation such as this. We have been 100 per cent consistent since budget night that we will not be supporting tax cuts. We want services, not tax cuts. We won't be part of a political arms race: 'Who's got the biggest tax cuts?' We want to see services, especially Newstart, properly funded for those battlers who are doing it real tough and for those people who can't get a job. So far we've been unable to secure a commitment from the government, the Labor Party or others on getting an increase in Newstart.

We've got a lot of ideas on how we can generate the jobs of the future and, more broadly, secure the future for our children and for future generations. We've always come up with good ideas, we've always been able to pay for them and we've always stood in here with conviction proposing those ideas—and, may I say, seeing many of them through. We believe that now is the time to be getting commitment to increasing money for the services that Australians most need. Now is not the time in the election cycle, in the political cycle or in the budget cycle to be funding $144 billion tax cuts, many of which won't even kick in for nearly a decade. They are simply a trick, a bribe, to get votes going into an election. With two election cycles before many of these tax cuts kick in, Australians would be rightly sceptical that they are even going to happen. But they make for good headlines and they make for good campaigning going into an election. One thing I do know is that Australians are very, very sceptical about politics. They're disengaged, disenfranchised and distant from us because they've lost trust in our institutions, and we need to regain that. I don't believe that this kind of policy is tackling the issues Australians do care about. I now move a second reading amendment to the bill:

At the end of the motion, add:

", but the Senate notes that the bill:

(a) significantly reduces the progressive nature of the income tax system;

(b) does not target low income earners, who are most affected by bracket creep;

(c) does not improve the living standards of those who are unable to find work;

(d) will not help reduce inequality; and

(e) locks in tax cuts that:

  (i) are premised on economic forecasts that have a high degree of uncertainty; and

  (ii) in 7 years' time, will constrain a future government's capacity to provide public services and to invest in public infrastructure."

I also move, at the request of Senator Di Natale:

At the end of the motion, add:

", but the Senate is of the opinion that:

(a) the bill should not be considered until the minimum wage is lifted to 60% of the median wage, and Newstart, Youth Allowance and related allowances are increased by $75 a week; and

(b) the revenue used to fund the government's Tax Cut Plan should be invested in health and education services, public infrastructure and the social safety net, instead of being used to fund tax cuts."