Scott Ryan (President) Share this | Link to this | Hansard source

I inform the Senate that at 8.30 am today six proposals were received in accordance with standing order 75. The question of which proposal would be submitted to the Senate was determined by lot. As a result, I inform the Senate that the following matter has been received from Senator Bernardi. Pursuant to standing order 75, I propose the following matter of public importance be submitted to the Senate for discussion:

The passage of business tax cuts in the United States of America and the pressing need for the Australian Parliament to provide significant tax relief for Australian businesses.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clocks accordingly.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

I present this matter of public importance with the concurrence of my colleagues, Senator Leyonhjelm and Senator Anning. Whilst we haven't come to an appropriate name for our taxpayer focused alliance, we are committed to getting better value for money for the taxpayers in this country and we are committed to finding a more efficient and effective way of governing.

Today we're focused on the need for Australia to reduce taxes on business. We have to leave aside for a moment the impost of red, green, and other tape on business and, indeed, the payroll tax and other taxes on jobs. All of this is endemic across the country. But we need to talk specifically about the income tax burden. On this front I have to commend the government for maintaining a commitment to lowering business taxes. It falls to the Australian Conservatives to keep making the case that gives the coalition the backbone and strength to secure truly conservative achievements.

Tax relief for business is a topic I know is attractive to almost a majority in the Senate—almost. Unfortunately, we've missed it by this much. That's the wedge of the Greens and others in the Senate that reject fiscal prudence. Again, as I said on the cashless debit card this morning, we always crash into what I might now describe as the budgetary Berlin Wall: the left-wing barricade in this place that is the Nick Xenophon Team, the Greens and the Labor Party. The real Berlin Wall, as you well know, this week has actually been down longer than it was ever up, but a budgetary Berlin Wall remains here in the Senate, and the bricks are coloured orange, green and red.

Why reduce business taxes? It makes sense for reasons I'm going to outline shortly, but the Trump administration in the United States have done two things. They've led the way with their business tax cuts. They've also put pressure on Australia to follow suit. If we do not follow suit, businesses will prefer to set up in more tax-friendly countries where the markets are bigger and it's more efficient and effective for them to do so. Businesses will go to where they're made to feel welcome. Reduced business taxes lead to increased after-tax profit, which encourages more capital investment. It allows business to increase, update and improve the capital available to their workers. This in turn leads to greater productivity per worker, greater economic outcomes and higher real wages. Indeed, Labor may claim the mythical cigar-smoking bosses will pocket the increases, but with labour mobility workers in a healthy economy will seek better-paying employment if the bosses and not they are enjoying the rewards of their labours.

Lower business tax rates can fundamentally address some of the key ills that have been afflicting our workers, households, cost of living and economy more generally over the past decade and particularly since the end of the mining boom around 2012. These are the very kinds of economic reforms that the Hawke-Keating and Howard government years successfully instituted for all Australians.

Cutting business taxes is the kind of economic reform and mindset this country urgently needs to return to the path of prosperity. We need to return to it today. The budgetary Berlin Wall of Nick Xenophon, Labor and the Greens cannot sustain business tax rates that are now at entirely uncompetitive levels by world standards whilst also pushing instead for artificial hikes in minimum and other wage rates to try and address sluggish wage growth. The evidence of this is apparent to anyone who has run a small business, who has employed people, who understands the economy and how it functions. Unfortunately, there are too few in this place, too few on the crossbenches and too few on the left side of politics who want to confront the reality of what we need to do.

This type of discredited central planning or command-and-control structure never works in the medium or long run. It simply destroys jobs rather than having the tide lift all boats. Of course, the current opposition aspires to hold government, and their ideological followers from the Nick Xenophon Team and the Greens simply don't seem to care about the medium or long term. The political Left want the short-term sugar hit of populism in order to reclaim power, to centralise more power within their ranks and to move across to the government benches by winning the next election.

Higher business tax rates are a disincentive for our young people trying to get jobs, they're a disincentive for businesses to invest in this country and to continue to reinvest in this country, and a they're a disincentive for mums trying to re-enter the workforce. Wage increases can only be sustained if they are driven or underpinned by similar productivity improvement. Otherwise we all suffer—particularly our young people seeking a chance to get their first job or to move into a better-paying job.

The reality is this: the more businesses we have competing for labour in the market, the more people we will have employed and the more attractive it will be for an employer to pay them higher wages in order to meet the competitive demands. I know that, as an employer in a small business, you do whatever you can to keep your good employees, whether it's giving them additional benefits, preferential hours or additional wages. But you can only do that if you are making a fair profit. Too many businesses in this country seem to be working for the benefit of the government—working for the benefit of a range of government departments and pen pushers—rather than to the benefit of the economy overall. We need to change that. Cutting company tax and business taxes will be a massive step in the right direction.

James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

I find myself yet again following Senator Bernardi in a debate about economic matters. I thank him for bringing this very important economic matter to the attention of the chamber today because he's absolutely right. The case for company tax cuts in Australia was already very, very strong, and no-one on this side of the chamber needed any further convincing, but, as Senator Bernardi has pointed out, the success of the Trump administration in legislating massive tax cuts for companies and individuals has brought that into even further and even starker vision for Australians.

We already knew that Australia's corporate tax rate was high and uncompetitive. We already knew that it was way out of step with the OECD and becoming increasingly out of step every single year. As major OECD nations like the United Kingdom, Ireland, France and others continued to cut and reduce their corporate income tax, Australia's became increasingly out of step, high and uncompetitive. From the most recent statistics, even before taking into account the US tax cuts, Australia was in the top handful of high corporate tax rates in the OECD—only Germany, Belgium, France and the United States were higher. As we know, very shortly the United States will be lower. There are many countries below Australia in that OECD list of rankings that you wouldn't normally think of as having lower and more-competitive corporate tax rates than Australia, particularly Scandinavian countries such as Sweden and Denmark, and the Netherlands and Luxembourg, but it's true that Australia's corporate income tax rate is even higher than those.

But we already knew all of that, and we knew that courtesy of people like Ken Henry, who in his review of the taxation system for the Rudd government identified the corporate tax rate as being very high and uncompetitive almost a decade ago—and it has only become more so in the years since. He also identified that, of all the taxes that the Australian government levies, the company tax is one of the least efficient—that is, the deadweight loss, the loss to the Australian economy, of raising $1 of revenue through the corporate income tax makes it one of the least efficient ones compared to others. It causes more displacement, it causes more ill effects and it reduces economic activity more than dollars raised from other forms of taxation.

So there was already a pretty compelling case from Ken Henry, there was already a pretty compelling case from where we stand in the OECD and there was even a very articulate case made in recent years by none other than Bill Shorten and Chris Bowen, when they were in government, for the need to cut the corporate tax rate in Australia. We already knew from historical records that when nations, including Australia, cut the corporate tax rate it stimulated economic activity, increased investment, increased jobs and flowed through to higher wages. We know from economic research that all of this is true. But now we have a very powerful real-world example from a very relevant neighbour and friend of Australia, the United States. It has put this issue into very, very stark focus.

The United States has legislated massive corporate and personal income tax cuts. This is relevant to Australia not only because the United States is the world's largest economy, and that's obviously an important factor, and not only because the United States is a competitor for global capital—and a competitive corporate tax rate is an important means by which we will compete with countries like the United States for global capital—but also because the United States is by far and away the largest foreign investor in Australia. Why is that important? Why is it important that the largest foreign investor in Australia has just cut its corporate tax rate? An investor in the United States who invests in countries like the United States and Australia, in contemplating where they're going to make their big investment next year, deciding between an equivalent investment in Australia and the United States, will now know that they can get a relatively better return on that investment in the United States than they would have received in Australia, because the corporate tax rate in the United States is now going to be considerably lower, at 21 per cent, than Australia's rate of 30 per cent for large companies. So that investor will think, 'Previously, I might have invested in Australia.' The corporate tax rate in Australia used to be 30 per cent compared to the United States' 35 per cent, where they would get, relatively speaking, a better return on an equal investment because of Australia's lower company tax rate. But now that same investor making that same choice will be much more sympathetic and more likely to invest at home in the United States, given there is a nine per cent advantage in the corporate tax rate in the United States. So by far and away our largest source of foreign investment in this country—those investors—will now be contemplating whether or not Australia remains a good destination for investment.

If we were to lose that investment or even if that investment was to decline slightly, that would have profound implications for Australians. We want foreign investment and we particularly want foreign investment from likeminded, close nations like the United States. It is a good thing when they come here and invest. When they come here and invest, they do so to create jobs, to create employment, and they provide products and services to Australian citizens, and we benefit from that. So it is vitally important that Australia has a company tax rate which is at least in the ballpark of the United States' company tax rate—let alone being way, way above it, as it will now be if we don't take action, if this parliament doesn't legislate the government's enterprise tax plan.

We had a powerful example of the kinds of benefits that the United States will reap from the company tax cuts that the Trump administration has legislated. Wouldn't it be nice if Australians could enjoy these benefits too? I will read from a selected list of the companies that have announced the actions they are going to take after the Trump administration decided to reduce its corporate tax rate. One is American Airlines. After the Trump administration's tax reform bill passed Congress, they announced that a $1,000 bonus would be paid to all of their employees in the first quarter of 2018. AT&T, a major telecommunications company, announced a $1,000 bonus to more than 200,000 US employees, and is also going to invest an additional billion dollars in the United States in the 2018 year. The Bank of America Corporation announced a one-time bonus of $1,000 for US employees earning up to $150,000 a year, which amounts to about 145,000 employees. Boeing has announced $300 million in charitable giving, workplace development and workplace facility enhancements. There are many others.

Comcast, another major telecommunications company, announced a $1,000 bonus for more than 100,000 workers. They said they would hire thousands more employees and invest over $50 billion in infrastructure. Disney, the entertainment company, announced a one-time $1,000 cash bonus for its more than 125,000 employees. ExxonMobil announced $50 billion in new US investments over the next five years. FedEx announced over $200 million in pay rises, about two-thirds of which will go to hourly team members—they are, the employees who are on the lowest wages—and they'll contribute $1.5 billion to the company's pension plan, which will ultimately go to its workers upon their retirement.

JP Morgan announced it would hire 4,000 new employees and open up to 400 new Chase branches, including increasing the minimum wage from $15 an hour to $18 an hour for 22,000 of their employees. Lowe's, a major department store, announced up to a $1,000 bonuses for more than 260,000 employees. They said they would expand their maternity and parental leave benefits. UPS, the distribution company, said they were going to invest $5 billion dollars in their pension plans and $7 billion dollars in a new smart logistics network. Visa announced they would hike their 401K—the equivalent of superannuation for US workers, the rate at which they match their contributions—from six per cent to 10 per cent. These are all the really tangible benefits from major US companies to their employees, to their shareholders and to Americans who will benefit from this increased investment. Wouldn't it be nice if Australia could share in these benefits too? The truth is that we could share in these benefits.

I want to share the announcement of one other company, which is Apple. Apple has announced that they are going to bring back the vast majority of their hundreds of billions of dollars of offshore cash into the United States. They estimate that they have $269 billion of cash outside the United States, and they're going to bring that back onshore. That's going to have a couple of benefits. Obviously that money can then be invested in Apple's business in the United States, in their employees, returned to their shareholders, invested in new products, in R&D, but it is also going to result in a one-time tax payment to the US government of $38 billion. So, a tax cut by the US Congress is going to result in a massive once-off payment from Apple to the US government in the form of higher tax payments. Wouldn't it be nice if Australia could share in this? The answer is we can, and all it requires is for this chamber to take action in passing the government's enterprise tax plan.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the opportunity to participate in this debate on a matter of public importance on the issue of company tax rates. One of the things I do regret in relation to this debate is that the focus on the headline company tax rate often—in fact, always—obscures the true picture of the tax burden that companies face around the world, and I will expand on that later.

I want to start off by looking at the fiscal position in Australia. We have a government that wants to go down the track of looking after the big end of town and providing tax cuts to companies in the order of $65 billion. But what is the fiscal context of that? If we look at the 2016-17 final budget outcome, we can see that, at that point, net debt had blown out by $147 billion under the government, having ballooned from $175 billion in September 2013, to $322 billion in the latest FBO figures. Gross debt at that time was at record highs, having crashed through half a trillion dollars for the first time in our history, with no peak in sight. The government's own budget papers showed that net debt would hit record highs at that point. That was the 2016-17 final budget outcome.

Last year the Parliamentary Budget Office's national fiscal outlook came out in October, and what did it say about the situation at that point? The national fiscal outlook showed that the Commonwealth net debt was continuing to rise and would be at record highs for two more years; net debt had blown out by another $19.6 billion since last year's outlook, due to higher than expected deficits; the government's projected return to surplus relied on wages growth—and we know that wages growth is at record lows—and also relied on higher personal income tax revenue—heroic assumptions there; and a projected return to surplus relied on a period of faster growth in taxes than the 2001-06 period, when we know that the mining boom was in full swing. We also saw there that, under the government's watch, taxes would rise to the highest levels since before the GFC.

Let's look at MYEFO and what the position was at that point in time. We know that, despite the minor improvements that were expected in the budget position, the budget deficit remains eight times larger than the $2.8 billion deficit in the government's first horror budget of 2014; net debt had blown out by $80 billion to $343 billion since 2014; economic growth is down on the back of families struggling to pay their bills and weaker household consumption; and the Liberals' return to surplus continues to rely on a $44 billion tax hike for middle Australia delivered in the budget from last year. So that is the fiscal position that this government is intending, many would argue, to make even worse, by virtue of a further raid on the fiscal position, by introducing the tax cuts.

Now let's look at the tax cuts in the United States, which Senator Bernardi has drawn attention to. We know that the IMF has come out and made some comments about the tax cuts there. There's an IMF report which points to the negative impact of the US tax cut package and what this would do to growth. I quote:

Due to the temporary nature of some of its provisions, the tax policy package is projected to lower growth for a few years from 2022 onwards.

This is from the IMF's World Economic Outlook for January 2018. I also note in passing that the Treasurer's own advice that he received on the $65 billion tax handout to big business showed that any benefits that would flow from that would be negligible at best and would not be felt for a very long time. So the Treasurer is ignoring the advice of his own Treasury. That IMF report that I referred to also calls for inclusive growth, which is something that Labor has been talking about for some time. All Australians need to enjoy the benefits of economic growth, not just the big end of town. Unfortunately, the government's policies on tax, wages and the social safety net make our economy less inclusive and more unequal.

I mentioned that focusing on this headline company tax rate is quite misleading. I also want to draw attention to the fact that currently, if you don't look at the headline rate and look at the average corporate tax rate, or the effective corporate tax rate, Australia looks much better, if you are looking at it from Senator Bernardi's perspective. I'm relying on Congressional Budget Office figures that were prepared on corporate tax rates in G20 countries back in 2012, so they are a little bit old, but many of the figures are quite relevant. At that point in time, the average corporate tax rate in Australia was listed at 17 per cent. There are only three countries in the G20 table that are below that level of average corporate tax rate. When you look at the effective corporate tax rate, which many commentators talk about from time to time, Australia is in the middle of the pack of the G20 countries, at about 10.4 per cent.

There are a range of factors that need to be looked at that the debate at the moment tends to obscure. We're yet to see any facts that back up the scare campaign from the coalition that, if we don't do something about corporate tax rates, capital investment will go elsewhere and multinational companies won't come to Australia and those that are here will leave. I believe that multinational companies have an extremely sophisticated approach when it comes to analysing the tax burden that they face in any of the countries in which they operate. They're not just going to look at the headline tax rate; they're going to look at the overall burden of tax which will confront them. As we can see from those figures, the real level of tax that companies are paying is quite different to the headline level.

There are a whole range of other factors that need to be taken into account when one looks at this issue of the tax burden. The differences in our health systems, for example, are quite an important factor. We know that in the US it's companies that face the burden of paying for the health system, whereas in Australia the taxpayer picks up that. That is something that is obscured in this debate. We also have a rather unique system in Australia of dividend imputation, which ensures that dividends are not taxed twice. The overall burden of tax is something that's quite sophisticated. I don't think that the public is done any favours if we are just going to focus on one aspect of the overall picture and not look at the full level of the impact of tax across the country.

If the coalition is serious about debt and deficit, they should stop looking after the big end of town. They should stop refusing to take action to stop corporate tax dodgers. They should look at negative gearing and capital gains tax. There's a growing list of supporters for Labor's policy of addressing those distortions, including the IMF, the OECD, ACOSS, CEDA, the former RBA governor Glenn Stevens, Jeff Kennett and Mike Baird. All of them understand that these are distortions which need to be addressed. They could look at trust tax policy, and they really have taken a lacklustre approach to productivity reform. Cutting penalty rates has not created jobs and it has impacted on consumer spending. Fundamentally, Labor believes it's irresponsible to spend $65 billion on the big end of town when wages growth is historically low and cost of living is weighing heavily on low- and middle-income households.

Fraser Anning (Queensland, Independent) Share this | Link to this | Hansard source

Mr Acting Deputy President, this is not my first speech. I rise to speak on today's matter of public importance and the need for the Australian parliament to provide significant and meaningful tax relief to Australian businesses.

An immediate cut to the company tax rate is essential in the interests of boosting jobs and investment and Australia's international competitiveness, and yet there is resistance. The opposition have not always been so short-sighted. Those of us who are old enough can remember the Hawke and Keating era of relatively business-friendly, responsible Labor government. However, an enthusiastic revival of the antibusiness policies and collectivist sentiments of the Whitlam era has seen Labor devolve to the harebrained business-wrecking approach previously cast aside. We have seen unnecessary opposition to reasonable policies that will result in benefits for all Australians.

Economic history remembers that in a not-so-distant past, meaningful cuts by none other than Labor themselves resulted in company tax rates tumbling from 49 per cent to 33 per cent. Australians reaped the benefits of those tax cuts, seeing, in conjunction with a number of factors, a marked increase in GDP from the late eighties. In 2010 Gillard promised to cut company tax rates, with the then Treasurer, Wayne Swan, saying:

Reducing company tax will create new jobs and grow the economy right around the country …

At the time, Mr Swan also stated that he was open to a reduction in the rates from the current 30 per cent to 25 per cent, exactly what we see being proposed today. Mr Shorten himself has previously criticised the Greens for their opposition to similar so-called big business tax cuts proposed by Labor.

Why has Labor abandoned this responsible approach? Maybe the idea of hypocrisy is lost on those opposite, because they now argue that the company tax cuts are unaffordable and that the whole concept is ridiculous. They have called it wasteful and flawed, and labelled it as trickle-down economics and a giveaway that will have negligible effect on job creation. I have to say I am deeply disappointed in the Labor Party for taking such a cynical position. The argument previously used by successive Labor governments to support tax cuts in the eighties, nineties and 2000 applies equally today. A reduction in the corporate tax rate will grow the economy, and the benefit to GDP is at least one per cent after the budget cuts are included. It will total many billions of dollars.

Outside Australia what we have seen since 2000 is a global downward trend in company tax rates which continues to widen the gap between Australia and many other countries. Yet successive governments haven't implemented any meaningful cuts. Our current rate of 30 per cent is amongst some of the highest rates around the globe. It is uncompetitive, plain and simple. It's higher than the OECD average, higher than the Asian average, higher even than the European average and, surprisingly, higher than the 'socialist union' average—excuse me—the European Union average.

What we need in this place is for those opposite to support meaningful tax relief for Australian businesses. The cut to the corporate tax rate similar to the US will see an increase in Australian competitiveness on the global stage and flow-on benefits to businesses and workers in equal measure. Lockheed Martin, the world's largest defence contractor, is earmarking for its pension program some of its exceptional expected windfall as a result of President Trump's tax cuts. The company has also come out and stated it is going to increase its commitment to initiatives like employee training, charitable contributions and education in science and math. Additionally, AT&T have reported they have some more flexibility as a result of the tax cuts. I call on the Labor opposition to close their ears to the socialist siren song of the Greens and not to allow the economy to be drawn onto the rocks of business-wrecking high taxes. Channel your inner Paul Keating and support business tax cuts.

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

I also rise today to speak in response to the matter of public importance submitted to the Senate by our parliamentary colleague Senator Bernardi. Senator Bernardi is correct: this is a matter of public importance, and there is a pressing need for parliament to provide significant tax relief for Australian businesses. The only thing standing in the way of parliament doing just that is the obstinacy, the obstructiveness, the recalcitrance and the political self-interest of the Labor Party.

The verdict is in: company tax cuts create opportunities for Australian businesses to invest, to grow and to employ. The Turnbull coalition government has already delivered tax cuts to 3.2 million small and medium businesses, giving them the flex to grow their businesses and create more and better-paid jobs. And the results couldn't be clearer. More than 400,000 new jobs have been created in the past year alone, and 300,000 of those are full-time. There have been 15 consecutive months of jobs growth. That's the longest consecutive run of jobs growth on record. The participation rate is at its highest in seven years and, on average, 178,000 jobs were advertised each week in January alone. That's up 6.2 per cent. That's the strongest monthly increase in eight years. So the results are irrefutable: get the policy settings right and the economic benefits will follow.

Despite an economy disrupted by the transition from a reliance on the mining boom, the laws of supply and demand still apply. Continued jobs growth will eat into capacity in the economy and put upward pressures on wages. We have already seen above-average wages growth in the fastest-growing sectors of the economy, such as health care and education. And this is what the coalition are all about: more jobs and better-paying jobs for all Australians. But you must get the policy settings right.

Whether it be through crazy, snake-oil-salesman economic thinking, political expedience that panders to the Left-Green flank of the Labor Party, the politics of envy, the politics of grievance or just plain old belligerence and an inability to concede the obvious, the Labor Party has resisted time and time again the opportunity to step up, to do the right thing by the Australian people and to demonstrate that it cares about the prosperity of future generations. But it's not too late. Labor can still support the coalition's proposed second tranche of company tax cuts and give Australians the very best chance at a thriving economy, more jobs and better-paying jobs.

I hope that the better angels of the Labor Party will win this argument, but I fear that, with Mr Shorten at the helm, there is little hope of that. As the Prime Minister so rightly noted yesterday in the other place, the reality of it is this: the Leader of the Opposition hates business. And, since it is business and not government that is ultimately the best at creating jobs, joining the dots, one could rightly infer the Leader of the Opposition hates new jobs.

Prior to January the United States had the highest corporate tax rate of any country in the OECD. However, President Trump signed into law the Tax Cuts and Jobs Act of 2017, slashing those corporate tax rates from 35 per cent to 21 per cent. When he did that, he showed the United States is indeed open for business. Meanwhile, however, Australia is languishing with the fourth-highest corporate tax rate in the OECD. The coalition government's enterprise tax plan will cut our corporate tax rate to 25 per cent for all businesses, making Australia more competitive with countries like the USA, like the UK and like Singapore. Without that second tranche of the enterprise tax plan, our international competitiveness will be put at risk. I note that Senator Ketter quoted the IMF World Economic Outlook, but he failed to mention that that same report identified a significant threat to Australian GDP as a result of the decreased competitiveness in the face of the US tax cuts. Treasury, however, have reported that the loss of GDP as a result of President Trump's tax cut could, in effect, be offset by the implementation of the government's enterprise tax plan.

Put simply, inertia is not an option. Our economy is under threat, but it is a threat that can be mitigated. Only the obstinacy of Labor stands in Australia's way. Even in the context of the opposition's rhetoric of inequality and fairness, this obstinacy is entirely unjustified. Recent economic research from Germany has demonstrated that not only does cutting corporate tax lead to jobs growth but those who are helped the most are those that stand to benefit the most: women, young workers and low-skilled workers. This, in turn, will help redress economic inequality, an issue about which the Labor Party purportedly cares so very deeply.

The fact is that even the opposition don't really need convincing of the benefits of company tax cuts because they already know. Professor Richard Holden, who is a go-to economist for the Labor Party, has stated the coalition enterprise tax plan is reform that 'deserves across-the-board political support when it comes before parliament again this year.' Furthermore, Professor Holden also asserted:

Cutting the Australian company tax rate from 30 per cent to 25 per cent is not just good for business, and workers. It is also helps to redress economic inequality.

The opposition leader apes Jeremy Corbyn and Bernie Sanders with that class warfare rhetoric, asserting that the coalition's enterprise tax plan is nothing more than a gift to the top end of town. I don't want to insult Jeremy Corbyn or Bernie Sanders because, for all their radical socialist tendencies, at least they actually believe in what they say. It wasn't so long ago that Mr Shorten himself said:

Reducing the corporate tax rate … sees more capital flowing into our domestic economy, which will then flow on to workers in the form of higher wages—thereby improving standards of living.

Similarly, the shadow Treasurer, Chris Bowen, has also previously stated:

It's a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.

These are the very same people who now threaten small- and medium-sized businesses, telling them that a Shorten-led Labor government would legislate to reverse the first round of company tax cuts that they supported only last year.

What has changed for these new apostles of socialism? At which point did they divest their party of the legacy of Keating and Hawke and move so far to the left that they could make Lenin blush? This is the most anti-business, anti-growth, anti-jobs opposition we have seen since Whitlam. The parliament knows it, economists know it, the media commentators know it, the business community know it and the Australian people know it. We expect such economic nonsense from the Greens, who dwell on the fringe, but you are a party auditioning to govern. You have abandoned your tradition, you have abandoned your principles, you have abandoned Australian workers who want more jobs and better-paid jobs and, by denying our economy every opportunity to grow and flourish, you abandoned your chances of winning the election for years and years to come.

You can man the barricades all you like. You can man the barricades. You can storm the Winter Palace with your rhetoric, your politics of envy and your economics of snake oil, but Australians know the truth: it is Labor that stands in the way of cuts that will keep Australia competitive, that will grow the economy, that will allow—

Deborah O'Neill (NSW, Australian Labor Party, Shadow Assistant Minister for Innovation) Share this | Link to this | Hansard source

$65 billion—

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

I ignored you perfectly well the first time, Senator O'Neill; you don't need to repeat yourself. These tax cuts will keep Australia competitive, will grow the economy, will allow businesses to invest and employ, and will create more and better-paying jobs. The Leader of the Opposition and this marching band of incompetents and sycophants have no plan to grow the economy, they have no plan to boost wages and they have no plan to create jobs.

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

I'm pleased to follow Senator Hume, because we can put some facts on the table. The MPI today from Senator Bernardi urges the Australian government or the Australian people to follow in the wake of Mr Donald Trump, the President of the United States, in terms of tax cuts.

I can't imagine that Senator Bernardi really believes this, because what we've seen in the US is that a significant number of top US companies are using those tax cuts to restructure their businesses and sack workers. Let's put a truth on the table—no rhetoric, no fluff, no spin: a truth. The company Kimberley-Clark, who make the tissues and the nappies, are using their tax savings—gleefully triumphed by those opposite—to restructure their business to sack workers and cut a staggering 5,000 to 5½ thousand jobs. That's what Kimberley-Clark are doing with their tax money. They're not the only ones. Walmart is also in the business of using its tax cuts to sack workers. When Senator Bernardi put this proposition to the Senate, surely he did not mean we should emulate those US companies and start to sack Australian workers with a tax cut? But he's not here to defend himself, so I don't know. Maybe he missed this. It's been in the media for the last couple of weeks that US companies are using the tax cut to sack workers. I don't know how he missed it; certainly I didn't. Those are the facts there; that's what is happening in the US.

Today we found out that just nine per cent of top US companies are actually using those tax cuts to share with workers and customers. We are always hearing from the government that somehow trickle-down economics still works. But the trickle-down ends in the boss's pocket. That's where it ends; it trickles down to the boss's pockets. Never have we seen any trickle-down ending up benefiting workers. Never in my 20-odd years as a union official did I ever see that. Every wage increase won by the workers of United Voice was hard fought by them. In the days of enterprise bargaining, they traded off to get wage increases.

Let's have a look at what's happening here in Australia. One of the things Labor has consistently raised, over and over again, is: let's go after the companies who are not paying tax. Before we give hard-earned dollars to the big end of town, let's see which companies are not paying tax. Well, 732 companies who last year had a collective income of over $500 billion paid no tax at all in Australia. How shameful. What we see from the Turnbull government is this banging on about, 'We need to give tax cuts to big business.' Actually, what we need to do is make sure that the 732 companies who paid not one cent in tax last year in Australia start paying their fair share.

All of us in this place who are PAYE taxpayers—the same as Australian workers—are paying our fair share of tax. I don't have a problem with paying tax, because I know that it goes to our hospitals, to our schools, to Medicare and to a whole range of government services that I value. I see that it is the role of government to provide these services. But it annoys me—it beyond annoys me—when 732 companies who operate in this country, who made $500 billion last year in income, paid not one cent of tax.

I want to go back to Glencore. As I said earlier in this place, I was really shocked and very disappointed to see a senior member of the government attack workers in the gallery yesterday. All those workers did was vote against their enterprise agreement, and their company, Glencore, locked them out. They've been locked out for more than 200 days. That has set a record in Australia. Let's have a look at Glencore. They declared $18.3 billion in income—$18.3 billion—and here they are arguing with their workers, locking them out for more than 200 days. How much tax have they paid? Not one cent. So, they've locked out their workforce, they've paid not one cent in tax and yet they've earnt $18.3 billion. Yesterday a senior member of the government attacked two workers in the gallery. I'm happy to stand corrected but as yet I have not seen an apology from that man who attacked workers. What a disgrace. But we shouldn't be surprised, because that's what the Turnbull government excels at: attacking workers, attacking unions. But yesterday was a new low—they went right down to workers.

Thankfully, the ATO is after Glencore. To put more facts on the table: the 732 companies that I'm talking about paid no tax in Australia and, in the 2015-16 financial year, their collective income was more than $500 billion. That's not some made-up, left-wing jargon. That's not some airy-fairy figure plucked out of nowhere. That's in the dataset on corporate tax released by the Australian tax office. That tax evasion by companies like Glencore and Chevron is on the public record for anyone to see. But, rather than look there, the Turnbull government, who we know always looks after its mates at the big end of town, is simply saying, 'No, we'll give you a tax cut.' Well, these companies don't need a tax cut; they need to pay their fair share. If they were fair dinkum Australian-managed companies, they would pay their fair share, because Australians still believe in a fair share. I think the ATO went after Chevron for two or three years, and they owed millions of dollars. Now it seems that they've been caught out, but not before a showdown, not before the ATO had to invest millions of dollars in pursuing Chevron simply to pay what it should be paying in this country—its fair share.

People are talking about tax cuts and the Prime Minister is going on about how trickle-down economics works, when it doesn't, but we've got record low wage growth in this country that all manner of experts are worried about. It's no longer an issue just for trade unions; we've got business leaders in this country saying, 'In order to get our economy moving, we need workers to earn money.' We don't need them being locked out by Glencore, who paid no tax, or having to bargain for 12 months or more to get a one or two per cent increase. They should have a fair share put into their pockets. But companies never do that willingly. They need governments to take the lead. We need the Turnbull government to start to take the lead and talk the sort of language that companies need to hear—that is: when you're making profits, you share with the people who made the profits for you.

The managing director or CEO of a company getting millions of dollars a year in income is not the one making the money for that company; it's the workers putting in the hard yards. That's who's making the profits for those companies, and it is time those profits were shared. I don't begrudge anyone making a lot of money—good on them—as long as they're paying their fair share, as long as they're paying what they should be and not having a free ride on the backs of workers, because that is not fair. BlueScope Steel—there's another one; Sydney Airport—another one; Toll Holdings; and Transurban are all companies we hear a lot about and that most Australians would have heard about at one time or another that are not paying proper tax in this country. It is time for the government to focus on tax avoidance and getting big companies to pay their fair share. Big companies who've made $500 billion in profits need to start paying what they owe. They're the facts on the table. Never mind a tax cut for the big end of town; let's get these companies paying their fair share so that we can put it into services, and workers can start to get a fair share of it, not the one or two per cent wage increases that are being doled out—and workers should not be locked out by a company such as Glencore that's paid not a cent of tax in this country.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Today, we are talking about the need to cut company tax rates. For years the Liberal Democrats have talked about the new jobs and higher wages that would come from cutting the company tax rate. But we have to change this message. It is no longer so much about winning new or higher-paying jobs. It's about keeping our current, poorly paid jobs. The message of hope is less relevant. Unfortunately, it is fear for our jobs that needs to motivate us now.

In 2003, the worldwide average corporate tax rate was 30 per cent. That's our current rate. In 2016, measured across 202 tax jurisdictions, the corporate tax rate was 23 per cent. It's now 19 per cent in the UK and 17 per cent in Singapore. It's 12.5 per cent in Ireland. And now the United States has cut its company tax rate, and the federal rate there is now 21 per cent. Even socialist countries like France are cutting their company tax rates to below ours. As a result, the great majority of the countries of the world charge companies far less than Australia does for the privilege of investing in their countries. So the great majority of the world's investment is passing Australia by, along with the jobs and wage growth that come with it. And it will only get worse while our company tax rate remains stuck at 30 per cent, notwithstanding the minor concessions for small businesses.

We need to live in the real world. Lamenting, ignoring or quibbling about the lower company tax rates in the rest of the world won't make them rise back up to Australia's rate, and it won't make foreigners invest here instead of elsewhere. Our current jobs, as unsatisfying as they may be, are at risk if we stand still. Not for me or others who suckle on the taxpayers' teat, but for the six in seven employees who work in the private sector in Australia. Those who refuse to acknowledge the connection between attracting company investment and the employment and wages offered by companies are either stupid or devious. Either way, they are traitors to the everyday Australians we are supposed to represent.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I am always suspicious of simple solutions to complex problems, and the proposal put forward by Senator Bernardi is a doozy. Does the senator realise a lower tax rate equals lower franking credits and less money in the hands of self-funded retirees and those saving for the future? One Nation has already supported tax rate cuts for businesses with a turnover of up to $50 million, but I draw the line at that. What we need are incentives for businesses to invest in Australia and tax rate cuts are not the answer.

Today we have been asked to agree with the suggestion that failure to lower business income tax rates like the United States will mean we are going to be uncompetitive. By that, I mean that existing businesses will leave Australia for countries with lower tax rates or that other businesses will not come to Australia. Foreign owned multinationals don't consider corporate income tax rates in their investment decisions, because they don't expect to pay any tax in Australia. It is just too easy to contrive a paper loss or a non-taxable income. Lowering business income tax rates will not make Australia an attractive destination for investment unless government delivers globally competitive electricity and gas prices. We also need labour reform. We have a $600 billion debt and no prospect of paying it back because this government and the previous Labor government have no appetite to collect tax from foreign owned multinationals which often pay more in political donations than they do in corporate income tax. The truth is Australia could compete for investment if only the two major political parties had the real interests of Australian citizens at heart. Instead, the prefer to spend their time and energy on silly games and pursuing private agendas.

It is an attractive idea to think someone else has already solved Australia's economic problem, but let us be clear: the Tax Cuts and Jobs Act signed into law by President Trump only started on 1 January this year. It will take time to see what it achieves. It does introduce a 21 per cent tax rate at a federal level, but many states in America also have corporate income tax law, so, really, the business tax rate in the United States will be about 26 per cent. A tax rate comparison between countries is ridiculous when the new system in America restricts deductions but in Australia deductions are unlimited. The new company tax system in America provides huge incentives in terms of capital write-offs to encourage things to be made in America.

Central to the reform of the United States tax code is departure from the international tax system, which taxes companies on their worldwide income. The American Congress wants to end the shell game multinationals play so well where profits are moved from one country to another and end up in a tax haven. It is alright screaming for a reduction in Australian company tax, but make it in relation to other countries around the world what they're paying—understand their tax system. I know for certain that most of the senators in this place have no understanding of the tax system and how it works. I am learning. I don't know everything but I have an adviser who has worked in the system for 20 years and I've learnt a lot.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time for this debate has now expired.