Gerard Rennick (Queensland, Liberal Party) Share this | Hansard source

In the last few months, I've been inundated with calls from concerned constituents as to how Australia will move forward after the coronavirus lockdown. As the saying goes, no wind blows in favour of a ship without direction. To ensure we head in the right direction, it is important to lay out a clear path that will encourage the Australian people to be innovative, productive and, most importantly, independent. To do this, governments must stand up for Australians who try to stand up for themselves and provide essential services that individuals can't provide for themselves.

All Australians should be given access to a fair, efficient and level playing field on which to succeed. After the protests last weekend, it is evident that state governments have failed to do this, and I condemn them for their failure to enforce laws that have had a devastating impact on our small business community. Their lives and livelihoods matter too.

The first measure that must be addressed is monetary policy. Australia does not need foreign capital, and the cheerleaders who advocate this should actually take the time to understand what real capital is: our people and how they explored our nation's untapped wealth for themselves and their children. The father of modern Australia, Lachlan Macquarie, knew this when he introduced the holey dollar as a means to fund the building of new infrastructure. Quite simply, a country cannot protect its sovereignty or manage its economy if it doesn't control its currency or its critical infrastructure.

The Reserve Bank must fund an infrastructure bank that will underwrite nation-building projects. An infrastructure bank is where monetary policy meets fiscal policy, and it is the link that governments need to grow our economy. If there has been a fundamental flaw in the western government's response to the GFC, it has been in propping up inefficient companies and banks instead of building productive infrastructure like China, whose economy has grown strongly because of its commitment to nation-building infrastructure. Let's not forget: 50 years ago China was coming out of the Cultural Revolution. Yet today it has managed to pull a billion people out of poverty because its central bank, and not foreign banks, funded the development of infrastructure.

A recent report by Goldman Sachs estimates that the G10 central banks have printed $16 trillion in the last two years. These foreign corporations, given free capital, should not be allowed to invest in Australian infrastructure or government bonds. Why? Because it's a monetary tariff that gives foreign corporations a competitive advantage over Australian companies. It's time monetary policy manipulation was called out by the World Trade Organization.

The next policy that must be addressed is our taxation system. While too numerous to mention all areas of reform, I will touch on a few. The first of these is the rate of tax on above-the-line profits, such as royalties, rent and interest paid offshore. Onshore profits in Australia are taxed at much higher rates than profits sent offshore thanks to our tax treaties which have lowered the offshore tax rate to as low as zero. Australia needs to retain its own capital before increasing foreign debt. To encourage this, withholding taxes on profits sent offshore should increase to fund a cut in income tax for low-income workers.

Of all the taxes that government levy, few cause more collateral damage than payroll tax. It is compliance heavy, with numerous exemptions, rates and thresholds across multiple states. It is like a sledgehammer to productivity. Payroll tax exists in present day Australia for one reason and one reason only: the state governments simply can't afford to give it up. But they should.

In the 21st century, due to advances in technology, labour has become more mobile, enabling the offshoring of Australian jobs. Reducing payroll tax would encourage Australian companies to keep work onshore and stimulate the rebirth of Australian manufacturing. If the federal government could nationalise the Corporations Act in 2001 then it should reform payroll tax, which is effectively only levied on companies. Of course, to do this will require federation reform. The fact that a federal system, conceived in the final decade of the 19th century, designed to encourage competition and productivity, delivers perverse outcomes in the 21st century suggests our federation is no longer fit for purpose. Australian business and innovation cannot compete in a global market under our current model of federation. The communist process and our dystopian bureaucracy continually undermines our individual freedoms and impedes progress at every step.

It is time to hold a constitutional convention to clarify the responsibilities of the states and remove the fiscal imbalance between the states and federal government. Australian people and entities should not be subject to multiple sets of rules and regulations. The ambiguous responsibilities are confusing at least and, as we saw with the Ruby Princess, tragic at worst. The overregulation of multiple governments at multiple government levels impedes our liberties, destroys innovation and suffocates inspiration. If this process doesn't mimic communism then I don't know what does.

I propose that the federal government take full responsibility for funding the entire national health system, including, most significantly, the public hospitals, with regions such as Brisbane metro north to take direct charge of operations. Currently, the federal government funds Medicare and has substantive control over aged care, the NDIS, public health insurance, the Pharmaceutical Benefits Scheme, so why not quite simply run the lot? In reality, health care is not a service with elasticity of choice and will not readily respond to competition, which could be relevant in other government service areas.

By contrast, education, particularly school education, is an area where competition can play a part. It is retrograde to suggest that a bureaucrat or a politician sitting in Canberra knows best on how to tailor a curriculum or support services to suit the needs of kids in Toorak, Tennant Creek or Townsville. If Australia were to adopt this suggestion in the current Frankenstein communist funding model this would deliver a net annual windfall of approximately $45 billion to state governments. This could then be used to effectively underwrite the abolition of payroll tax, which amounted to approximately $25 billion in the 2018-19 year alone.

The current funding model of distributing GST also needs to change. The current model is opaque and encourages inefficient states to stay that way rather than become more productive. Just as the old white building down the hill is no longer fit for purpose, and ultimately became a museum to another time, so too much of the federal architecture that defined that building has now outlived its ability to serve our Commonwealth in the 21st century.

One final but not exhaustive measure would be to make superannuation voluntarily and not compulsory. Hardworking Australians need access to their hard earned incomes today. Overpaid fund managers, super tax breaks and industry funds are an $80 billion cost to the economy this country cannot afford.

In concluding, I would like to pay tribute to all Australians and their response to the coronavirus. In particular, I would like to mention our small to medium business owners who have had to endure an enormous amount of stress and financial hardship. Our party's founder, Robert Menzies, described you as the 'backbone of this nation' and his words still ring true today. In the same way you carried the nation on its back, it is time for our political class to help you back on your feet. Without your motivation, innovation and persistence Australia cannot succeed. As Menzies said, 'Men without ambition readily become slaves.' As Australia's elected leaders it is time to capitalise on the mood for change amongst Australian people and drive the recovery from the coronavirus.