Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 second reading debate. Essentially, I'll be echoing the remarks of Senator Gallagher, who outlined the opposition's position on this matter, but I will add some additional comments, particularly in relation to the apparent deals that have been reached by the government with some members of the crossbench over the last 24 hours.

To begin with, I also want to join Senator Gallagher in putting on record the opposition's actual position on this bill, as opposed to what various speakers, including Senator Di Natale, have said. Fundamentally, Labor's position is informed by a couple of things, and they are our concerns for the state of the economy after six years of Abbott/Turnbull/Morrison government under the LNP, as we know them in Queensland. After six years of LNP government, under three prime ministers, now into their third term, we have an incredibly weak Australian economy, where we see interest rates set at a level below inflation. It's actually not even a matter of, if you're wanting to borrow money now, getting free money from banks. The economy is so weak under this government that banks are, effectively, giving money away and it's cheaper to borrow money than it is to just hang onto it. That's how weak this economy is under this third-term LNP government. The interest rates that we're now seeing under this government are in fact actually lower than what were available to borrowers during the height of the GFC, when, I might remind you, there was a federal Labor government in power, which successfully steered the Australian economy through the GFC in a way that was the envy of the Western world. Now we have had six years of LNP government—they're into their third term and third Prime Minister. This group of people, who like to parade around the country as the superior economic managers, have left the economy in a state where interest rates are lower than they were when the world economy sank into the worst economic conditions that it had seen since the Great Depression. So give yourselves a pat on the back. That's what good economic managers the LNP are. Well done!

It's Australians who are paying the price of this. They are paying the price of this in the form of the lowest wage rises we have ever seen in this country. My recollection is that these records have been collected for 30 or 40 years. Never over that entire period of time, whether it be Liberal governments or Labor governments—whoever the Prime Minister was—have we seen Australians' wages increasing at such a poor level while, on the other hand, company profits continued to escalate. We know that some people are doing quite well in this economy under this Liberal-National government. They're not lower-income earners, middle-income earners or the quiet Australians that this government claims to represent and claims to have been elected by; they're the largest corporations in this country, the shareholders in those companies and the highly paid executives of those companies. That's who is benefiting under this Liberal-National government, not the tradespeople working in Logan in Queensland and not the retail assistants working in Townsville. Their wages are barely growing. In fact, to make matters worse, this government is quite happy to stand by and see people like retail workers, hospitality workers and hairdressers actually have their wages cut. This government refuses to do anything about the penalty rate cuts that these average working people—the quiet Australians that this government claims to represent—are suffering.

The wages of all Australian workers are barely rising and are barely keeping up with inflation. It's no wonder that people are having trouble paying their bills. It's no wonder that people are so desperately looking for some kind of tax relief from this government. They simply can't get ahead. They're having trouble paying their mortgages and their energy bills—and let's not go there. What a failure this government has been on energy prices. I think we're up to 13 energy policies from this government. I'm not even going to worry about policy No. 14. I'll wait for policy No. 23. We'll probably be there by the end of the year.

It's no wonder that lower- and middle-income earners in this country are screaming for tax relief, because they're not getting any other support from this government. In fact, they're getting a range of policies that are seeing their wages either barely rising or being cut, if they work in retail, hospitality, hairdressing and industries like that. That's the fantastic economy that we're getting from the 'superior economic managers' that we have in this government sitting opposite us.

There have been a range of commentators and official institutions supporting aspects of this tax package. As I will outline, Labor also supports some aspects of this tax package. The Reserve Bank of Australia—if not the most respected economic institution in the country, it is right up there—is calling for tax cuts, particularly for lower- and middle-income earners, to try to get this economy moving, because nothing else the government is doing is working. The RBA is also calling for this government to bring forward infrastructure projects urgently. On another day we will have a proper debate about that, but I think Australians in very short order understand the pea-and-thimble trick that this government has gone ahead with when it comes to infrastructure projects. We've all seen the headlines over the last couple of years about the X billion dollar infrastructure package that this government is going to release for Queensland, New South Wales, Victoria, Western Australia or Tasmania. What's never revealed is that most of those infrastructure projects are so far down the horizon, so far beyond the next four years, that they will have no economic impact whatsoever. Not one single person is going to be employed to build any of those roads, any of those bridges, any of those dams or any of those rail lines, which aren't going to get funded by this government until well into the 2020s. That's going to have no effect on lifting the economy any time soon, and, of course, it's not going to have any effect on trying to fix the very real congestion problems that Australians are experiencing right now and need action on now. As I say, we'll have a proper debate about that another day.

As I say, Labor does support some aspects of this government's tax package. We recognise that the government was elected, that we lost the election. We recognise that particularly tax cuts for low- and middle-income earners were a key factor in the election debate. That's why we have been humble enough to shift our position in relation to stages 1 and 2 of this tax package. We went to the election opposing the package. We've listened to the Australian people. We've actually tried to compromise with the government on stages 1 and 2, but of course this arrogant government, re-elected against all expectations with a near Senate majority—their hubris has got the better of them so early into this term that they're not willing to talk with the opposition about a sensible compromise package that will deliver tax relief to low- and middle-income earners in Australia but won't drive the economy into a ditch, which is the risk that we face if the entire package, including stage 3, goes ahead.

Labor has already put on the record that it is willing to support stage 1 of the tax cuts that this government is proposing. We recognise that those tax cuts will primarily benefit low- and middle-income Australians—the 'very quiet Australians' who this government has been punishing for six years through lower wages, higher energy costs and a whole range of other cost-of-living increases. We recognise they need a break. We recognise low-income and middle-income people are most likely to spend their tax cuts; they're not people who go and save thousands and thousands of dollars a year. They're just trying to make ends meet. They will go out and spend that money in the shops, in the restaurants and in the local businesses right up and down my home state of Queensland. That will provide the very economic stimulus that the weak Australian economy, presided over by this government, so desperately needs. So we will support stage 1.

We've also more than compromised in relation to stage 2 of the tax cuts, which, again, overwhelmingly benefit middle-income Australians—people who need a bit of a hand to get ahead and the very people who will go out there, spend those tax cuts and get local businesses going and get their local economies moving. In fact, we not only support stage 2 of these tax cuts; we also recognise that the economy needs a desperate injection of funds to get it moving. That's why we've asked the government—and we'll be putting forward amendments today—to bring forward those stage 2 tax cuts. If the economy is in such dire need of an injection that the Reserve Bank of Australia is out there calling for the government to do so then let's make it happen. Let's not stop at stage 1; let's get on with it and bring forward those stage 2 tax cuts so that people can feel the benefit of those right now and get their local economies moving. In fact, if the government—and the crossbench, for that matter—is willing to compromise and support Labor's amendments to bring forward stage 2 of the tax cuts, the effect of that will be that every single Australian worker will get a tax cut, because those stage 2 tax cuts will benefit people who are earning more than $90,000 a year. If you want to have an argument about which party is supporting tax relief for low- and middle-income Australians, for all Australian workers, I'm happy to have that debate. The amendments that Labor is putting forward, seeking to bring forward stage 2, will have the effect of making sure that every single Australian worker will get a tax cut. If the government actually supports tax cuts for middle-income earners as well as low-income earners then it will change position and back Labor's amendments to bring forward those stage 2 tax cuts.

Of course, as Senator Gallagher has outlined, we do continue to have strong concerns about stage 3 of the tax cuts package that the government has been putting forward and that's for a couple of major reasons. They really come down to the incredible economic irresponsibility which is being displayed by a government that likes to say that it's a superior economic manager. If you're a superior economic manager, would you seriously be locking into the budget in 2019 tax cuts amounting to nearly $100 billion that won't actually start being paid until 2024-25? Not one person in this building, not one person in this country, knows what the economy is going to look like in 2024-25. That's five years down the track. If we believed what this government has been telling us for the last six years, we would have been seeing people dancing in the streets by now celebrating the economic joy that this government has been promising for six years. For every promise this government has made over the last six years—that good times are just ahead and that people are going to be benefiting from their superior economic management—we would be seeing it by now. We wouldn't be needing to see the very tax cuts that this government is putting forward.

How on earth can we have any confidence in what this government is saying the economy will look like in 2024-25, when the stage 3 tax cuts will actually take effect? It's not just Labor saying this. Again, we've had a range of economic commentators, including the Grattan Institute, appeal to the government to pass the stage 1 tax cuts now but to defer the stage 3 tax cuts to a time down the track, closer to when they'd take effect, when we have some idea about what the economy is actually looking like. The Grattan Institute's information that they put out this week states:

…the Stage 3 cuts, scheduled to come into effect in 2024-25, would cost the budget $85 billion over the subsequent six years. We do not know now whether these cuts are affordable or the right size and shape for the economy so far into the future.

The economy is softening, the budget position is uncertain, and calls for the Government to use fiscal policy to stimulate the economy are growing.

So there is an argument for the stage 1 and 2 tax cuts to happen right now to get the economy moving. But do we seriously think that anyone out there in the Australian community, if this bill gets passed without our amendments, is going to say, 'You beauty, in 2024-25 I am going to get a tax cut from the Abbott-Turnbull-Morrison government'—probably by then the Canavan-Smith-Scarr government, because you will probably move to the House of Representatives and you'll be the next leaders. We don't even know how many Prime Ministers we will have between now and 2024-25, let alone what the economy will be like. Do you seriously think there is anyone sitting in Western Australia, where Senator Smith is from; in Rockhampton, where Senator Canavan is from or in Brisbane, where Senator Scarr is from, today who is going to race down to the shops tomorrow and spend a whole bucketload of money buying a big, new TV from Harvey Norman, or whatever they're going to do to get the economy going, because they know they are going to get a tax cut in five years time? Really? If you know people like that, I would like you to introduce them to me, because they're obviously easily deceived.

The stage 3 tax cuts are totally economically irresponsible. They are also grossly unfair. I might just pick out one aspect of this, and, again, this is particularly for Senator Canavan's benefit. I spent the last term reminding regional Queenslanders of how often we had seen the Nationals talking the talk in regional Queensland about how much they cared about regional Queenslanders, then coming down to Canberra and getting their tummies tickled by the Liberals, rolling over and supporting policy after policy after policy that ripped money out of regional Queensland and sent it straight into the north shore of Sydney. Here we go again.

You would think that the Nationals would have some gratitude for regional Queensland, which I accept voted for them in droves. We got a shellacking in regional Queensland. The Nationals did very well—congratulations. You really would think that there'd be a little bit of gratitude from the Nationals, that they'd repay the favour to regional Queensland and not back in the stage 3 tax cuts that overwhelmingly will be benefiting people in Sydney and Melbourne, and not in Rockhampton, not in Mackay, not in Townsville, not in Gladstone, not in any of those regions—