Jenny McAllister (NSW, Australian Labor Party) Share this | Hansard source

Where is the emergency? It's not here this evening, because apparently this government believes that it's reasonable to put through legislation which will return billions upon billions to multinational corporations. There has been a lot of discussion about how returning billions to multinational corporations will allow them to generate greater levels of profit, and, in turn, these profits will be returned to the community in the form of investment. That investment will apparently then produce jobs, and apparently these jobs will be high-wage jobs rather than low-wage jobs. There are a lot of assumptions in that chain of logic. I've heard coalition senators stand up in this place and speak again and again about the consequences for wages that will flow from cuts to corporate tax. There is no evidence base for this. You only need to examine the logic that underpins this argument to see how ridiculous it is. If you really think that every extra dollar of profit will be put aside and ring-fenced for investment in Australia then you're absolutely mad. There is no evidence that that is so, and it is particularly the case for the multinational corporations that would be the beneficiaries of this tax cut.

In the United States, they've actually got direct experience of this. Tax cuts have gone through. There is no evidence that wages are increasing. What there is evidence of is massive share buybacks. I put on my phone a Google search for share buybacks because every single week there is another major US corporation pursuing share buybacks on the strength of the corporate tax cuts that have been offered. These things don't do anything to create new jobs. They don't create any new jobs whatsoever. Again, some people have offered some tortuous, circuitous argument about how at some future point the additional capital may produce some additional investment that may produce some additional jobs that may drive the demand for labour that may drive wages up. Does anyone believe that this is actually happening? It's certainly not happening in the United States.

The most significant thing that has happened in the United States is that the tax cuts that were offered in the form of depreciation for investment have been effective in driving additional investment. It's that logic which underpins the alternative approach that is being offered by Labor. We have offered incentives for businesses that wish to invest—not a broadscale tax cut smeared across every single industry and every single business in the country, but a specific tax cut offered to those businesses that choose to invest, that choose to invest in ways that will produce new opportunities for Australian workers. That is a rational use of our fiscal capacity. If we've got some headroom, that is a good use to which to put it—stimulating investment that will actually support Australian jobs. But the plan before us this evening doesn't do that. It provides a benefit unilaterally. It doesn't matter whether you're a big multinational, it doesn't matter whether you're a bank and it doesn't matter whether you're a small business—this government wants to bring taxes down to deliver billions and billions in tax cuts, and it's just not something that the economy can afford. It says a great deal about the economic priorities of the government, because they've spent a great deal of blood and treasure pursuing this particular initiative. They've gone to by-elections in the last month where they've persisted with this proposition, which is manifestly unpopular with voters. And it's unpopular, as I said before, because people understand that it won't do very much for them. But it's also unpopular because it says a great deal about their priorities.

Wage growth is at record lows. There've been many opportunities over the last 12 months in this chamber for the government to intervene and support wages. They could have intervened on a number of occasions with the Fair Work Commission. They could have supported Labor propositions to restore penalty rates after the shocking decision to strip away penalty rates and the level of penalty rates on Sundays. But they've chosen not to do that, and it's remarkable that they have, because the circumstances faced by Australian families are very, very severe indeed. Australian families face rising costs, rising electricity prices, rising rent in many instances and record high underemployment. But the government has had absolutely nothing to offer.

We've got a longstanding concern about wages growth. We've brought that concern to this chamber on many occasions. Economists like Andy Haldane in the Bank of England have on numerous occasions raised their analysis about the dwindling bargaining power of workers and their representatives. It's not an accident that wages growth here and in other places is stalling. It is a product of the structure of work and the laws around work itself. And this government, rather than facing up to that reality, rather than doing something to assist workers, has instead sought to intensify the pressures on working people and to limit the ability of working people's representatives to bargain on their behalf.

The thing is, budgets are always about priorities. Budgets are about choices. This government has had it wrong every time. They've pursued big-business tax cuts. They've pursued tax cuts for high-income earners. They've ensured that low-income workers—people in that very modest income bracket just above $21,000—get increased taxes. And they've allowed penalty rates to be cut without lifting a finger. But I don't think that they are the priorities that the Australian people expect from their government.

We've got our own priorities on the Labor side, and we've prosecuted them consistently over the last five years. I might add, given the turmoil of this week, that we've done so with a great deal more consistency than the coalition has been able to summon to pursue most of their interests. We have sought to fund our schools, we have argued for proper investment in infrastructure and we have argued that, to do these things, we will require a fair tax system. We have made the case, people will recall, for reform to superannuation. We have made the case to level the playing field for homeownership. We knew that there were revenue issues there, but we also knew that it was not fair that first home buyers would walk into a room facing a substantial disadvantage compared to those people walking in with a plan to make an investment. We have sought to cap the deductions people could obtain from managing their tax affairs to just $3,000. If you've got $3,000 to chuck at your accountant, that's quite enough. People ought not to obtain an advantage merely because they can afford to pay for very high-quality tax advice. We should all be on a level playing field when it comes to dealing with the ATO, and the fact that people paying for their tax were also able to obtain a deduction for it was simply unfair.

We've boldly pursued reforms to discretionary trusts to deal with the issue of income splitting. That was something people told us not to touch. They said it was too hard, and we pursued it anyway. Yes, there was a scare campaign. But, if people on the other side want to talk about conviction, I'd point you to the Labor shadow Treasurer and I'd point you to the shadow economics team, because we on this side of the chamber—and in the other place—have consistently brought forward bold ideas, well prior to an election, so that people understood what it was that we would take to them, and so that people understood how it was we would fund our promises. It's a great deal more than what's been offered by those on the other side, who've persisted with this particular bill before us this evening, the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017, without in any way, at any time, explaining to the Australian public the costs that they would incur as a consequence of the tax cuts that are proposed.

This is not just about Australians living now This is about fairness between people now and people in the future. We have to get the policies right for future generations of Australians. If we don't have the revenue to pay for essential services like Medicare, people will lose out. If we don't deal with issues for first home buyers, we will see a generation of young people locked out of homeownership forever. If we aren't able to properly fund schools or TAFEs or universities, we will deprive young people of the resources they need to successfully participate in the economy and contribute to the economy. If we don't fund important infrastructure, we will deprive economic actors of the infrastructure that they need to do business well, to succeed here and globally. And, frankly, if we don't deal with climate change, we'll all be sorry. We've seen the most extraordinary scenes over the last 10 days in particular, but really over the last five years—a kind of denial about one of the most pressing economic concerns, no concern or interest in addressing this, and, in fact, a reckless inability to see the risks that are before us.

This government has its priorities all wrong. It's here tonight asking us to pass a corporate tax cut, when issues around infrastructure, skills, hospitals and schools all require urgent attention. But they haven't been on the agenda for the government tonight, and they haven't been on the agenda for the government for the last five years—and it's really getting quite embarrassing.