Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Paterson for that question. As I said in my summing up speech, in the period since we legislated the first three years of company tax cuts for businesses with a turnover of up to $50 million, economic growth is up, employment growth is up and just under $10 billion in higher company tax receipts have been collected compared to our expectations in the 2017-18 budget. If you look at the 2017-18 budget and you compare that with the actual performance as reported in the monthly financial statements, what you will be able to see is that company tax receipts are actually going up, which is very good news in terms of our objective to put funding for important social services, for health, for education and for national security on a fiscally sustainable foundation trajectory for the future.

In the end, a strong economy is central to everything. It is central to making sure that Australians today and into the future—Australian families today and into the future—have the best possible opportunity to get ahead, to reach their full potential, to have a great quality of life. It is also central to making sure that the government can generate the necessary revenue moving forward. The experience on the back of our plan for stronger growth and more jobs is that, as more jobs have been created, not only have more company tax receipts been collected but also we've had significant increases in personal income tax receipts compared with what was expected.

The good news doesn't end there. We've had significant reductions in expenditure on welfare payments because more people are in jobs than was expected. So we've got more revenue—more revenue from company tax, more revenue from personal income tax—and we've got less expenditure on welfare, because more people are in employment than had been anticipated. I would have thought that would be something everyone in the Senate would and should welcome. In fact, the proportion of working-age Australians on welfare today is at its lowest level in 25 years. That is one of the proud achievements of the Turnbull government. That is why we say that our plan for a stronger economy, our plan for more jobs, our plan to help families around Australia to have the best possible opportunity to get ahead, is the best recipe against poverty.

But, if we make it harder for business to be successful, low-income earners will be hurt the most, because it is low-income earners around Australia who are the most exposed to the negative impact of lower growth, who are the most exposed to the negative impact of lower business growth, because invariably it is at the lower income end that people are trying to break into the jobs market. It is often at the lower-income end that people are most exposed to the variability in hours worked. Stronger growth means a better opportunity for more working hours, a better opportunity for permanent employment instead of casual employment.

These are all things that come from helping to ensure that businesses around Australia have the best possible opportunity to be successful. I say again what I said in my summing-up speech: if we make decisions that make it harder for business to be successful, they will be less successful. And as businesses are less successful they will hire fewer people than they otherwise would have and will invest less in their future growth. As businesses around Australia hire fewer people than they otherwise would have, employment growth will be less, the unemployment rate will be higher, the demand for workers will be less, the supply of workers will be higher, the wages that can be secured by workers will be lower and the revenue for government will be less.

So, it is lose, lose, lose, lose, whereas what we have demonstrated—certainly the data is obvious in our monthly financial statements, and later in September the Treasurer and I will be releasing the final budget outcome for 2017-18. People will be able to see how the Australian economy and Australian businesses have performed in 2017-18 compared with what was estimated in May 2017. And people will be able to see, based on the data that I've already released, that company tax receipts, even in just the one calendar year, are substantially higher than what had been anticipated, to the tune of nearly $10 billion.

To put that into context, the cost of the remaining unlegislated business tax cuts, per the explanatory memorandum that was tabled with the legislation, is $35.6 billion to 2027-28. So, just in 2017-18 we have raised $10 billion more than had been anticipated. The cost for the remaining unlegislated tax cuts to 2027-28 is $35.6 billion. We've put an amendment on the table in relation to the four major banks which, I'm advised, would reduce the cost of corporate cuts to 2027-28 by $7.9 billion. We've already flagged that we are considering reforms to the petroleum resource rent tax arrangements, which would not have an impact over the short term, over the forward estimates, but which also would have a revenue impact over the medium term, further reducing costs.

If you look at the cost of the opportunity to make businesses around Australia internationally competitive, it is actually very low when you put it next to the opportunity to create more jobs, create more personal income tax revenue for government and create more company tax revenue for government on the back of stronger growth, rather than on the back of higher taxes. As certainly as night follows day, the Labor Party agenda—the Labor Party antibusiness, politics of envy, higher taxes agenda—would lead to less investment, lower growth, fewer jobs, higher unemployment and, on the back of higher unemployment, lower wages; whereas our agenda, which is all about encouraging business to invest more by making sure that businesses have the best possible opportunity to sell Australian products and services around the world and in Australia, is all about attracting more investment to deliver stronger growth and more jobs. As more jobs are created and the unemployment rate continues to come down, the increased competition for workers drives up wages. As more people are employed and as wages go up, personal income tax revenue goes up, as does company tax revenue, on the back of more profitable businesses. That is the win-win-win that we believe Australian families deserve and that is the win-win-win that we are asking the Senate to support.