Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance, representing the Treasurer, Senator Cormann. Can the minister please explain why high taxes are bad for growth, for jobs and for wages?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Hume for that question. Increasing the overall tax burden in the economy reduces our international competitiveness. It makes it harder for us to attract additional investment to strengthen growth and create more jobs. It makes it harder to attract the investment necessary to boost productivity, which is, of course, a necessary ingredient to increase real wages over time. Increasing the overall tax burden in the economy, in particular in the way that the Labor Party is proposing—targeting success, targeting aspiration—will lead to worse economic outcomes. There's absolutely no question about that. It will. It is designed to make it harder for business to be successful, which means it would make it harder for business to employ more Australians and to pay them better wages.

I've seen that the Labor Party has been quibbling with the assertions that have been made about the level of additional tax burden that Labor is proposing to impose on the economy. What we would say to the Labor Party is this: tell the Australian people. I'll tell you what we say you want to impose in terms of additional tax burden on the Australian economy. We say you want to increase taxes on small- and medium-sized businesses and businesses overall by $65 billion over the next 10 years. We say you want to increase the tax on housing through your negative gearing changes by $32 billion over the next 10 years. We say you want to increase taxes on housing, through your capital gains tax changes, by $13 billion over the next 10 years. We say you want to increase taxes on small business in particular, through your trust changes, by $15 billion over the next 10 years. We say you want to increase personal income tax by increasing the top marginal tax rate on a permanent basis by $22 billion over the next 10 years. And we say you want to increase taxes on superannuation by $20 billion over the next 10 years. You tell us which one of these numbers is wrong. More importantly, you tell the Australian people.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Hume, a supplementary question.

Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

I thank the minister for his answer. Can he expand for the Senate on why it's so important to limit the amount of tax that the government imposes on the economy?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The government, indeed, has imposed a limit on itself, in terms of the tax burden in the economy, and all of its revenue forecasts in the budget are based on an assumption that tax, as a share of the economy, tax as a share of GDP, will not go past 23.9 per cent. Labor will blow that limit out of the water, with disastrous negative consequences for the economy and for jobs.

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

Yes, and we'll spend it better than you.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

We had an interjection there from Senator Cameron that Labor would spend the money better. That is, of course, exactly what this is all about: 'Tax more to spend more', irrespective of the damage that it would do to the Australian economy along the way.

We have delivered tax cuts for small- and medium-sized business already. We've delivered tax cuts for 3.2 million small- and medium-sized businesses, which will help them be more successful. More successful small- and medium-sized businesses mean more jobs and better wages, and Labor should support the remainder of the tax cuts.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Hume, a final supplementary question.

Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

Can the minister explain how the Turnbull government's plan to reduce taxes is supporting economic growth and the creation of new jobs?

Senator Cameron interjecting—

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Here we have the socialist conscience of the Labor Party interjecting again, dismissing our plan for a more competitive business tax rate as 'trickle-down economics'. Let me explain it very carefully for the Senate and for the senator who has just interjected. Helping businesses be more successful means they can hire more Australians and pay them better wages. For individual Australians to be the most successful they can be, the businesses that employ them have to be as successful as they possibly can be. Unless you actually ensure that people across Australia have the right incentives to pursue aspirations, to pursue success, then we let everybody down. Suggesting that we should pursue a culture of equality means that we will drive the situation for Australians down to the lowest common denominator, to a level of mediocrity. That is what the historical failure of socialism has shown all around the world. We don't want to take Australia down the path of mediocrity and the lowest common denominator. (Time expired)