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

My question is to the Minister representing the Prime Minister, Senator Cormann. Analysis by the Prime Minister's former employer Goldman Sachs has found that up to 60 per cent of the Turnbull government's proposed $65 billion tax cut for big business will go directly to foreign shareholders. Is this analysis correct? If not, why not?

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

I'm not aware of that particular analysis. But what I would say to you is the prospect of a return on your investment is precisely what we need in order to attract more investment into Australia so that we can continue to develop our economy, create more jobs and create an environment for higher wages. Australia needs foreign capital to develop its economy to its full potential. The more competitive we are in offering the opportunity for a higher return and higher profits, the more capital we will attract. The better we are able to improve our productivity, the more we are able to ensure we can generate in returns for our businesses. The more successful our businesses are, the more people they can hire as they grow. The more people businesses want to hire, the more competition there is for workers. And the more competition there is for workers, the more businesses have to pay to secure their services. This is what this is all about. The whole reason we need to have an internationally competitive business tax rate is so that we can successfully compete for investment from around the world into Australia—

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

Order, Senator Cormann! Senator Cameron, on a point of order?

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

It's on relevance. The issue is: how much of the tax cut is going overseas? The minister has not got to that point. That's the fundamental aspect of the question.

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

Senator Cameron, I've allowed you to re-emphasise the point in your question. I cannot instruct the minister how to answer a question. I believe he's being relevant to the material.

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

We have many Australians who started a small business and who are now Australian champions involved in global competition. If you take a business like Qantas, and I see a number of distinguished Queensland senators here, it started with three employees and today it employs 30,000 Australians. And, do you know what? It is involved in a fiercely competitive global industry.

The Labor Party wants to disadvantage Qantas by imposing higher taxes on them than their competitors face in other parts of the world. Do you know what that means? It means less job security for employees in businesses like Qantas and it means less opportunity for small- and medium-sized businesses to supply goods and services to them. We want more opportunities for people to get ahead. We want more jobs, more investment and more opportunities— (Time expired)

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

Senator Cameron, a supplementary question?

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

Yes, thanks, Mr President. I refer to Moody's Investors Service, which says in relation to the US tax cuts, 'We do not expect corporate tax cuts to lead to a meaningful boost in business investment, which has remained tepid despite a supportive economic environment.' What guarantee can the minister provide senators that the Turnbull government's $65 billion handout to big business will lead to a meaningful boost in business investment?

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

Firstly, I would say that if you look at the actual evidence in the real world, the tax cuts which were legislated through the US Congress reducing the corporate tax rate to 21 per cent have led to an immediate boost in investment and led to an immediate boost in capital returning to the United States. They have led to an immediate boost in confidence, they have led to an immediate increase in the number of Americans getting jobs and they have led to an immediate increase in the level of remuneration.

Let me also say that the International Monetary Fund upgraded the global economic growth outlook on the back of the Trump tax cuts that passed the Senate. But whatever your view is on the Trump tax cuts, the reality is that they're there. It's like the mountains in Switzerland; they're there. And do you know what? That now means that the tax rate in the United States is nine per cent lower than here in Australia.

Now, we can put our heads in the sand and say that it won't have any implications for businesses here in Australia, but the truth is that it will. And if we don't make decisions to pass business tax cuts, we'll hurt the economy and jobs. (Time expired)

Honourable Senators:

Honourable senators interjecting—

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

Order! Around the chamber, order! Senator Cameron is on his feet for a further supplementary question. Order on my right!

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

Over the last two years, wages have grown by only four per cent while company profits have increased by a massive 32 per cent, eight times faster than wages. Why should senators believe that a $65 billion handout to big business will flow through to wage growth when companies seeing massive profits have not passed those on to their employees?

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

The sad thing is that Senator Cameron doesn't understand economics. There is a lag between increased profits and increased investment to increases in jobs. We have gone through a period of slower global growth and we've gone through a significant economic transition in Australia, with significant drops in prices for our commodity exports. And, of course, instead of having massive increases in unemployment under our government, we've seen massive increases in employment.

In the last 12 months we've had 420,000 new jobs. If wages had grown strongly—

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

Senator Cameron on a point of order?

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

Yes, a point of order on relevance. The issue that I've raised is that workers are getting pay cuts while profits are going up—

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

Senator Cameron, a point of order should at least refer to the relevant issue you're raising, not restate the point you were trying to make in the question. Senator Cormann was being relevant. In fact, he was mentioning that term as you rose to your feet.

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

The truth is that wages growth has been picking up as the economy has continued to improve. We want wages growth to pick up more. That is why we need businesses to be more profitable and more successful, because if they're less profitable and less successful, let me tell you, they'll hire fewer people and pay them less. That is common sense! Do you think that a less successful business will be able to hire more people and to pay them better wages? It is only in the Labor Party where that sort of logic applies. (Time expired)