Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Finance (Senator Cormann) and the Attorney-General (Senator Brandis) to questions without notice asked by Senators Dastyari and Cameron today relating to tax policy.

What a performance we witnessed today in question time! Two of the government's so-called leading lights were trying to run away from simple economic questions as fast as they possibly could. When Senator Brandis was on his feet he was asked, 'Do we have a revenue problem?' He was asked, 'Is negative gearing still on the table?' We asked, 'Are superannuation tax concessions still on the table in the government's tax policy process?' He would not go near those questions. What did he do? What answers did he give? In typical Senator Brandis style, he gave this pompous response. He tried to denigrate people who were asking him a question. He tried to patronise me because I was asking a reasonable question. He behaved in a condescending manner. That is not all that Senator Brandis does in here, but that is typical of the way Senator Brandis responds to questions. And it is pretty typical of the absolute arrogance of this government, a government that cannot be trusted. It demonstrated in its first budget that it cannot be trusted.

Then we had the other leading light of the government in this place, Senator Cormann. Senator Cormann just goes into this robotic rote. Words just fly out from Senator Cormann; they do not mean a lot. There is just a constant wall of noise coming from Senator Cormann. If you look at the questions that Senator Dastyari asked of Senator Cormann he was asking about the interview that he did on Sky yesterday in relation to negative gearing. I picked up the transcript of Senator Cormann's responses to David Speers in the interview on Sky yesterday. Eight times Mr Speers asked whether he agreed with the former Prime Minister Tony Abbott when he argued in the party room that there should be no changes to negative gearing rules. If anyone ever wants to see an absolutely terrible interview, they should look at the interview that Senator Cormann did yesterday. He was in a position where he just did not want to support the Treasurer of the country and the Treasurer who he works with. Somebody said yesterday, 'He probably doesn't like the new Treasurer because he doesn't smoke fat Havana cigars like the former Treasurer and Senator Cormann do.' Senator Cormann just would not go near those questions. All his answers were robotic rubbish. They were just spewing out from Senator Cormann every time he was asked a question.

The reality is that this government actually want to introduce a GST increase. The position they are in now is that a GST increase was going to be their election policy. Increase the GST, attack penalty rates for ordinary workers and diminish the standard of living for workers around this country—that was the policy of this government. Yet they could not get a GST increase up because they did a bit of polling and discovered that a GST increase was not very popular.

So what did this new Prime Minister do? Malcolm Turnbull, the new Prime Minister, was going to be different. He did exactly the same as the former Prime Minister, Tony Abbott, did—that is, he reverted to sloganising. This is an opposition—I mean 'government'—that has no economic policy and a government with absolutely no way forward for the workers of this country. (Time expired)

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I also rise to take note of the answer. Senator Cameron has belled the cat! In his last five seconds, he said the opposition has no idea on economic policy, and he is quite right. There is evidence of it littered all through the history of when you were last in government—the six years that you tormented the Australian people with this nonsense of a response to the GFC. I need go no further than the minerals resource rent tax to expose your economic illiteracy in areas of any kind of prudent fiscal management. That was a tax that went to the very heart of the biggest sector contributing taxes to our economy: the resource sector in Australia. Incomprehensibly, the then government forecast $3 billion worth of revenue in their first period. Actually, it was forecast to raise $3 billion over the first year; I must be specific. We came in, and we got rid of it six months after getting in. That was one of our key election policies. It had not raised $1.5 billion in the first six months. It had raised $126 million. That is how your projections go. At the same time, you put a great cloud over this country in terms of sovereign risk. That was the minerals resource rent tax. Can you imagine if that policy was still there today in the resources sector? It was one of your key planks, your key responses, to the global financial crisis to saddle up one of the biggest taxpaying sectors of our economy.

Then we had the carbon tax. 'There will be no carbon tax under a government I lead,' was the cry at the time that Julia Gillard was the Prime Minister of the country. In fact, can I have a show of hands? Has anybody on the other side of the chamber got a passport?

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Senator, you may not pose questions to other senators. Speak through me.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I would be interested because, unfortunately, when you are a big resource player and when you have industries, you tend to want to export whatever you make, dig or process. We had the carbon tax, which drove up the cost of doing business in this country in comparison to the ability of other countries to produce the same goods. You are all probably getting a little bit ho-hum about it, but it is economics 101. It is demand and supply. If you cannot supply global products, if you cannot supply products which we are proud to make, dig, process or grow here then you will not be competitive. If we put taxes on these growing areas of our economy, we are not going to be competitive. We export 60 per cent more than what we consume of what we grow. We certainly cannot use all of the ore or coal that we have—all of those sectors. But it is, 'Oh, no. We'll have a carbon tax. What we'll do is show our costs of production are disproportionate, and we'll put us at a direct disadvantage to other countries which we're up against.' Well done! That is a good way to drive business out of this country!

Then we had the renewables. That is the next one. I am glad Senator Gallacher is in the chamber. Because of his Labor colleague former Premier Mike Rann and his lax planning laws and investment policies and his high rebates on tariffs, 53 per cent of the nation's wind farms are now in South Australia. By virtue of that, we now have the third highest energy costs in the world. Well done, Premier Mike Rann! We have 53 per cent of the wind farms and no baseline energy. I know Senator Gallacher's patron seat of Grey has just closed its coal fired power station. Well done! You are useless and hopeless at managing an economy. Do not lecture us on what we should be doing here. (Time expired)

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I intend to return to the matter that was in front of the Senate, not wander off on a frolic like Senator Edwards. The question was: do we have a revenue problem? You can make up your own mind about that. Revenue for 2015-16 is expected to be $405.4 billion—an increase of 5.5 per cent on the estimated revenue of 2014-15. Total expenses of 2015-16 are expected to be $434.5 billion—an increase of 3.4 per cent on the estimated expenses in 2014-15. Looking broadly at the actual figures from the Parliamentary Library, we spend more than we get in. I suppose the question is: what do you do about that? That is where those people on the other side are incredibly confused. We have the Hon. Malcolm Turnbull saying that negative gearing changes will drive housing prices down. We have the Hon. Kelly O'Dwyer saying that negative gearing changes will drive house prices up. We have Senator Cormann saying that the excesses alluded to by the Treasurer are nothing to do with him because his is an expenditure-driven portfolio; it is not an income-driven portfolio. The Treasurer and the Assistant Treasurer deal with taxation measures, and he deals with expenditure measures.

You cannot keep straddling a barbed wire fence without doing some injuries. It is impossible. Sooner or later, you are going to get injured. The government cannot have it both ways. It is bad going up, and it is bad going down. There are excesses in negative gearing; that is what the Treasurer said. The finance minister is saying: 'It's nothing to do with me. There's nothing to see here. Look the other way. I'm an expenditure man.'

Very clearly, they need to get their act together. We know where the income comes from. The evidence is there. PAYE taxpayers contribute $194.3 billion; 47.8 per cent of the revenue comes from people who go to work and pay their taxes. We know that company and resource rent taxes contribute $71.2 billion; 17.6 per cent of revenue comes in that way. We know that sales tax contributes $61.6 billion, 15.2 per cent of revenue. So, if you add all those up, there are only a few places you can go to get some more revenue in the light of commodity prices being at their lowest point for this cycle.

We know that negative gearing is one of those areas that has been spoken about. The Labor Party has very clearly put in the public domain a clear, forward-thinking strategy, grandfathered, out there for all to see, and the coalition are completely at odds with each other. We read each day about a ginger group of backbenchers who are against negative gearing. We know the Treasurer is saying that there are excesses. 'Excesses' means it probably needs to be curtailed; there probably needs to be some policy there. The Minister for Finance walks away from that argument. The Assistant Treasurer says that it is going to put prices up, and the Prime Minister says that it is going to put prices down. They are all at sea on their tax policy. We are being governed by a group of individuals who are warring in their own ranks. It is not good for the country. It is not even good for the Liberal Party—not that I would want them to be in a more favourable position. Their internal fighting is appalling. The lack of policy enunciation and their lack of forward thinking this close to a budget is nothing short of astounding.

The fact that they cannot get their party room over the line on anything does not bode well for this country. We see Senator Cormann virtually refusing to back his role in the government, refusing to put on the table some clear thoughts about negative gearing or whatever else. He is a member of the Expenditure Review Committee. He should be able to elucidate what the Treasury is thinking. He denied it was his role. He said: 'I'm an expenditure man. That is the Assistant Treasurer's and the Treasurer's job.' He waffled his way through the questions of the interviewer and walked away. (Time expired)

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the motion to take note of the answer to the question to the effect: do we have a revenue problem or a spending problem? I just heard Senator Gallacher's contribution to this debate. One of the things that strike me about the comments coming from the opposite side is that people frequently confuse public announcements or the lack thereof with a lack of activity in policy development. One of the first steps the coalition government took in 2013 was to instigate a significant review of taxation so that we would understand the consequences of various actions. Part of that commitment was to work through what those consequences were. We felt that was important because when we came into government we inherited commitments made by the Labor government that locked in structural spending, and the revenue was not there to support that structural spending.

In actual fact, in 2013 spending increases were some $7½ billion more than revenue over the forward estimates. The minerals rent resource tax, which my colleague Senator Edwards mentioned just before, is the typical case of policy which was made on the run by the Labor Party so that they could rush something out. At the moment they are encouraging us to rush stuff out, like they did with the MRRT. That tax was forecast to raise billions of dollars, because it was based on the returns Labor felt the mining industry was achieving at the time. The problem is that, as we all know, world circumstances have changed, so those returns are lower. But even at the time, 2013 into 2014, that tax was delivering significantly less than Labor planned. The problem was that they had already locked in structural spending commitments based on revenue that they did not have. Part of the reason that Australia now has such a high debt that we are borrowing money to pay the interest on that debt is that those spending measures have been locked in.

Part of this coalition government's election commitment was to get rid of some of those spending commitments, because the revenue that was supposed to support them did not eventuate. We did manage to get rid of some, but many of those measures and much of the savings—in fact even some of the savings measures that Labor themselves had proposed at the 2013 election—Labor subsequently refused to support here in the Senate. It is a bit like saying you don't like the direction the Titanic is on, yet you are chaining the steering wheel or the helm so that the government has limited ability to change its direction. If you want us to reduce the structural spending that the Labor Party put in place then you need to allow the government freedom of action to implement its policies. There is no point claiming that the government has a spending problem of our making when we inherited it from the now opposition and the now opposition has consistently blocked attempts by this government to make the savings measures that it promised to make during the election.

So the reality is that there is a spending problem in Australia that has a significantly greater impact than the revenue problem. Revenue is an issue. We are seeing declining revenue because of the decline in the mining sector, but even before this most recent decline occurred, as highlighted back in 2013 at the time of the election, we had already seen that the former government committed to spending that was not matched by revenue, and that has to be undone if Australia is going to be on a sustainable footing. Just as any household knows that they cannot commit to more spending than income being earned, this Senate needs to recognise that the government has a mandate to get spending under control. This Senate needs to be prepared to work with the government to allow us to pass the very savings measures that we have put forward so that we can put Australia's economy onto a sustainable basis into the future.