James McGrath (Queensland, Liberal National Party) Share this | Hansard source

I rise to speak on the Productivity Commission Amendment (Addressing Inequality) Bill 2017. Inequality has become the new rallying cry of the Left as they continue to peddle the politics of greed, envy and division. We've got a Labor Party here in Australia who have looked across to what Jeremy Corbyn is up to in the United Kingdom, with his politics of envy, with his views on British society and the British state, and they've gone, 'Yes, we'll have some of that; we'll bring that here to Australia.'

It's ironic that the Labor Party preach to us about inequality while they oppose government measures that give Australians the hand up they require. With Bill Shorten's Labor Party it's always about the handout, not the hand up. It's always about having another review, another study. It's not about what we can do to grow the economy. This modern Labor Party, under Bill Shorten, the Leader of the Opposition, is not like the Labor Party of Bob Hawke or Paul Keating. It is a different beast. I may not have liked Paul Keating as Prime Minister when I had reached the dizzying heights of president of the Griffith University Liberal Club—our rallying cry back in 1993 and 1996 was about kicking out Paul Keating, and we finally did that in 1996—but under Prime Minister Hawke and Prime Minister Keating Labor did focus on market based reforms to improve the Australian economy. It is sad that we will not be able to say the same about Bill Shorten, the Leader of the Opposition, and the current Labor Party.

With Labor it's always about taxing the rich, but now it's also about taxing the elderly. We've got a Labor Party who want to tax those who want an investment property. We've got a Labor Party who don't want to give out tax cuts. They want to make the poor poorer. They want to make sure the poor take a handout from government. They don't want the poor to get on that aspirational ladder, to start and grow a business, to start and grow a family, to help grow Australia. What they want to do is protect the trade unions in Australia. This is a segment of the community whose membership rate, increasingly, is going down. In the private sector, just over one in 10 workers are members of a trade union. Why is that? It is because workers recognise that the way to get ahead is not by having this third-party industrial organisation, these dinosaur-era trade unions, trying to negotiate on their behalf. They recognise that unions have forgotten what they're there for. Unions have become just a campaign arm of the Labor Party. They are not standing up for the workers. They use money from the workers to try and get Labor elected and try and keep Labor in power. That is very sad.

The Productivity Commission, funnily enough, has just done a stocktake of the latest and most complete evidence on inequality. They have found that inequality has decreased since the global financial crisis. One of the main reasons for this is that this country has had 27 years of consecutive economic growth. That is a world record for a developed economy. For 27 years since 1991, since the recession we had to have—when Paul Keating drove the economy into the ground—we've had an economy that has been growing. It has largely been thanks to the economic stewardship of Mr Howard and Mr Costello, in terms of the work they did building on many of the reforms of Mr Hawke and Mr Keating. But the work of the John Howard-Peter Costello government between 1996 and 2007, for 11 years, is something that all Australians, regardless of their political allegiance—whether they're a member of the Greens, Pauline Hanson's One Nation, the Labor Party or a troglodyte party that I don't know the name of—should be proud, in terms of growing the Australian economy.

We were able to have that economic growth notwithstanding the best efforts of those economic troglodytes in Labor. It was when we had Wayne Swan, that noted economist/thespian/union official, who was Treasurer of this country for a long period—notwithstanding his best efforts to ruin the economy. We should not forget that, when Mr Howard was asked by the Australian people in 2007 to update his CV, Australia had no debt whatsoever. In fact, we had money in the bank. It took Labor just under six years to spend all the money in the bank and also rack up over $500 billion of debt. Notwithstanding those efforts, because of the work of Mr Howard and Mr Costello we still had economic growth.

Since the 2013 election, which Mr Abbott and the coalition won, we have been able to continue that economic growth. We've done that through making sure we try to live within our means and making sure that government, where there is a need for government, is small but good; it shouldn't be large and wasteful. We also need to make sure that taxes are as low as possible. We on this side of the chamber believe that the individuals, families and business owners know best how to spend their money, and they will act in the interests of themselves, their families, their business and their communities in terms of how they spend that money. We think that they know best in terms of spending the money rather than allowing government to spend money and continually increase taxes.

The Productivity Commission found that there is a high degree of economic mobility in Australia, including a high degree of economic opportunity. This economic growth has delivered significantly improved living standards for the average Australian in every income segment of the economy. We've all been growing; as the Australian economy has grown, we've all grown. In fact, economic mobility in Australia is higher than in most other OECD countries, including the United States and the United Kingdom. This is because our progressive tax system and our broad social safety net, our welfare system, are working together to drive inequality down.

The government's plan for a stronger economy is working, and it is helping to deliver a stronger economy for all Australians. How is it doing this? It is doing it through tax relief or, as I prefer to say, tax cuts—tax cuts to encourage and reward working Australians, tax cuts that keep backing businesses to invest in and create more jobs. We should not forget that, since 2013, a million jobs have been created in the Australian economy. We all want to decrease inequality and we all want to get rid of poverty, and the best way to do that is not by having the Productivity Commission do another study, which is effectively what this bill would propose, but by creating jobs. It is about people working for money. It is about people actually paying taxes that then go back into helping that social safety net. By doing that, it guarantees the essential services Australians rely on.

We're also growing this economy by keeping Australians safe. We are making sure that our borders are secure. We are making sure that we have an immigration system in which we decide who comes into this country and the circumstances in which they come. We decide who comes to this country, what skills they have and how they can help grow Australia.

We've also got to make sure that the government lives within its means. The government is delivering on its plan to get the budget back into the black sooner, with the reforms we've made, and also to start paying back debt. One of the biggest roadblocks to inequality in Australia will be government debt. Money we're spending on interest repayments is money that is not going into essential social services. Money that is going into paying interest on government debt is money that is not cutting taxes. We should never forget what Labor did to this economy in the period they were in power between 2007 and 2013. We went from zero debt in 2007 to almost half a trillion dollars of debt in 2013.

The core function of the Productivity Commission is to conduct public inquiries at the request of the Australian government on key policy or regulatory issues bearing on Australia's economic performance and community wellbeing. There is nothing preventing the commission from research and investigation into inequality or its impacts upon community, wellbeing or economic performance. In fact, that's what it's just done. Australia has a progressive tax system. It has a broad social safety net, and our welfare system is one of the most targeted in the world. There's also been wide reform of our age pension system to give more to those on the lowest incomes. We know that the best way to help Australians get ahead is to ensure that every Australian who can work is able to get a decent job. That is why our entire plan is targeted at growing the economy, getting more Australians into work and seeing incomes increase right across Australia.

In contrast, the Leader of the Opposition, Mr Shorten, and Labor believe that for some to do better others must do worse. We do not believe that. We think we can all do better. We think that by growing the economy all Australians can rise. Bill Shorten and Labor want to increase taxes and punish the job-creating parts of our economy, and that is a tragedy. The main thing we're doing to improve income inequality is jobs generation, because nothing helps people more than getting a job. The Household, Income and Labour Dynamics in Australia survey, called 'HILDA' for short, released in July this year found that relative poverty is at its lowest point in the history of the survey, while absolute poverty remains close to record lows. From 2001 to 2016 the percentage of the population living in absolute poverty decreased by approximately 70 per cent, from 12.6 per cent to 3.6 per cent. Meanwhile, the percentage living in relative poverty—and that's with the poverty line set at 50 per cent of the median income—fell from 12.6 per cent to 9.4 per cent.

Recent data supported the notion that some income inequality measures in Australia have stabilised since the global financial crisis. According to the Australian Bureau of Statistics, the Gini coefficient, which is used to gauge economic inequality, fell from 0.33 in 2013-14 to 0.323 in 2015-16, after growing in the lead-up to the global financial crisis and peaking at 0.336 in 2007-08. In case Labor has forgotten, in that instance lower is better. The HILDA survey estimated that there has been little change in income inequality between 2001 and 2016, with the Gini coefficient remaining at approximately 0.3 over the 15-year period. In 2016 the Gini coefficient was at its lowest level since 2005. In 2015-16 a total of 3.6 million Australian households received more in government payments than they paid in income taxes. Therefore, around 40 per cent of households do not pay any net tax after benefits. By contrast, in 2015-16 the top 10 per cent of taxpayers paid 45 per cent of total personal income tax.

It's disappointing coming to this debate, because Labor lack credibility on this topic. They have abandoned any pretence of fairness and of taking real action to reduce poverty in Australia. They want to play politics with it. They fail to understand that the best way to address inequality in our society is by economic means. It's not by doing another study, it's not by raising taxes, it's not by taxing one element of the population to subsidise another element of the population and it's not by adopting the Venezuela model of just taxing and taxing and taxing. The best way to decrease inequality is to make sure Australians have an economy that is growing, an economy where businesses will put on new workers, an economy where workers can decide that they want to start their own business.

In Australia we sometimes forget that every large business in Australia started off somewhere small. We forget that businesses like Qantas, in my home state of Queensland, started off in a shed in Longreach when it was the Queensland and Northern Territory Air Service. We forget that that is how that massive business started off. We forget that Coles started off with a single corner store and is now one of the giants of the Australian retail sector. We forget the same with Myer, which started off with a single store. So many Australian business names started off with someone who had been a worker deciding they wanted to start their own business, and they wanted to start their own business because they wanted to a get ahead. They wanted to get ahead for themselves, for their families and for the community. By doing that, they employed more people. By employing more people, we get them out of the poverty trap. We get them out of being reliant on welfare from the government. Even though we do need welfare, we do need to have that safety net for people, we want to make sure they can get ahead and have a job.

Labor's alternative plan for growing the economy is to put $70 billion of extra income tax on Australians. They don't want to have tax cuts for businesses. They will come to the table when they get shamed into it before the election. But let's see, if they ever win an election again in this country, what they will do. We got a pre-taste with what they did between 2007 and 2013. And, heavens forbid, if we fail to win the next election, and Bill Shorten becomes Prime Minister, we will have all these economic giants who sit on the opposition frontbench, all these people with their extensive business experience! This might be a fun fact for people to know who might be listening at home: the number of people in the Labor frontbench—there might be an exception here—or indeed on the backbench with business experience is very limited. And that is sad because small businesses and those who work for big, small or medium-sized businesses—but particularly small businesses—do so much for Australia. My fear is that Labor do not understand that small business is the best way for people to get ahead, for that person who has that dream, who sees that empty shop in the main street. My office is in Nambour in Queensland. There are people always wanting to see an empty shop and start a small business and grow it, to make sure they can get their family ahead. And it is tough. But doing another study, doing another report, raising taxes or getting Canberra to tell people what is best for them are not the ways to do it. The best way to do it is to empower people to get ahead.

It was Labor who opposed our tough measures to crack down on multinational tax avoiders when they opposed the 2015 multinational anti-avoidance legislation. One of their many great shames—they have a lot of great shames—was to have voted for leaving $2 billion in the pockets of multinationals instead of supporting our efforts to deliver it to the budget bottom line, funding essential services for Australians. It is Labor who, by voting against the enterprise tax plan, is opposing the Liberal-National government's efforts to boost investment, increase earnings and grow the economy. It is a Labor who have a plan for higher taxes and higher deficits. At the 2016 election, the Parliamentary Budget Office confirmed that Labor's election commitments would have resulted in higher deficits to the tune of $16.5 billion. Higher taxes, higher debt and higher deficits are the worst prescription you can write for the Australian economy. Labor are a AAA threat to our AAA credit rating:

Labor do not have one policy that would help one business invest one dollar or create one job. On housing, Labor's only plan is for higher taxes. We all know that higher taxes don't build houses. Labor's plan is to tax more so they can dole more out for their welfare spending increases, and that is wrong. The best form of welfare, the best way to fight income inequality, is actually a job.