John Williams (NSW, National Party) Share this | Hansard source

I want to respond to Senator Ketter, who was talking about fairness and so on—amazing when it comes to the budget and the growing debt. Who in 2014 opposed budget tax cuts—better to take a bit of pain than severe suffering later on? It was Labor and the Greens who opposed tax cuts in this place where we could get the budget back into the black even quicker than we are now. Under Labor—talk about debt! Remember Treasurer Swan? How many years did he promise, 'Next year we'll be in the black'?

Senator O'Neill interjecting—

You don't know what black print on the bottom of the budget means, Senator O'Neill. You don't understand black print. All my life, Labor has sent us broke—whether it be back in the nineties in Victoria, South Australia, Tasmania or New South Wales. And look what they've done in Queensland. They're heading towards $80 billion of debt for the 4.5 million people living there. Of course, the nineties were the days of Mr Keating—borrow, borrow, spend, spend.

You've talked about investment, jobs, fairness and taxation. Let me take you back to a bit of history. On 1 January 2013, Labor brought in a tax bill and it meant this: if you had an income of more than $250,000 a year, including superannuation, you could not get a tax deduction for investing in a business. I found that out personally when I bought the farm with my wife Nancy. You could buy as many houses as you liked and negative gear them to get a tax deduction. And it still stands today; I hope we change it in the next budget. If you're a doctor, barrister, QC, solicitor, dentist or whatever, and you earn more than $250,000 total income and super, if you go to borrow some money to invest in a farm, a business to employ people, to grow, to export, to produce food or whatever, you cannot get a tax deduction. How crazy is that? The ones who can actually afford to invest in business are the ones who have no incentive to invest in business because, when they borrow money, they can't claim a tax deduction.

That is Labor's way of growing the economy—don't let those high-income earners invest in businesses; get them to buy houses. We could have bought houses. Any dentist, politician, doctor, QC or whatever could go and buy what they wanted by way of houses under Labor; but don't invest in business and grow the jobs and the economy—that would be very bad! As I said, that is a fact and it still stands today.

There was a great article by Terry McCrann just recently about Labor's negative gearing. What Labor plans to do with negative gearing, with the help of the Greens in the Senate, would hit both home owners and renters—nothing surer. Terry McCrann said: 'For the same time—and this shows how really dumb the whole exercise is—it wouldn't actually cut the big tax deductions investors get from negative gearing for a very long time.' That is to say it would very effectively hurt owners and renters but it wouldn't get the existing negative gearers. Terry McCrann continued: 'What Shorten and Bowen propose would be disastrous for everyone, including their own government's fiscal position. For anyone who owns a home, Labor will make it worth less. Labor's attack on negative gearing is one of the three policies that directly attack investors and investment. In combination, they would be devastating. The other two are a big increase in capital gains tax and reducing dividend franking credits.' The final line in the article said: 'It's the politics of envy and stupidity.'

Let's talk about the franking credits. Self-funded retirees put a lot of money aside. Interest rates are very low, so they buy shares. Those shares could be fully franked dividends they receive; the company's paid the tax to Canberra here. What does Labor want to do? Instead of giving them a rebate for that when they have a very small income, they are going to tax them again. Taxing them twice is the way they'll increase their 'fair taxation'. These are battlers—people who have reared their family, invested in a home or two, educated their kids and saved their money. They might be a married couple who have worked hard. They are the ones Labor is targeting. They were the people Labor used to represent, decades ago—working people. But it's not the case these days. They want to go after them. Why? Because they had a go!

When it comes to taxation, we know the $200 billion extra taxation Labor will bring in if they win government. We know what will happen to electricity prices. We are swimming in energy but we have the highest electricity price of OECD countries. Labor will bring in more of the same—renewable energy targets, more unreliable electricity, more cost, more expense for businesses and households. They call it fairness; I call it stupidity. (Time expired)