Glenn Sterle (WA, Australian Labor Party) 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 Minister for International Development and the Pacific (Senator Fierravanti-Wells) to questions without notice asked by opposition senators today relating to proposed company tax cuts.

I rise to note the answers given by Senator Cormann and the pathetic, bumbling effort by Senator Fierravanti-Wells. Imagine if the whole of Australia had nothing better to do than sit and listen to the stupid debate going on here today, you would think that for some strange reason the government can't wait to throw $65 billion tax cuts around to those who deserve it. I want to speak as an ex-small-business person as opposed to a multinational foreign invader. I know how hard it is to turn a quid in Australia when times are tough, but I also know the benefits that can flow from hard work. But I cannot believe that this government can mislead the Australian public into thinking that the $65 billion tax cut is going to help all Australians. I'll tell you why I say that. One only has to go to the Financial Reviewthis morning. We all know that there was a secret survey done by the Business Council of Australia. They surveyed the top end of town, make no mistake. This is not the battlers; this is not the men and women who have fought like heck to rise up from the shop floor, invest in a truck or invest in a little shop, work their way through and put everything on the line. This is the top end of the town—the corporations. The top 130 CEOs—these are not my words; these are the words used by The AustralianFinancial Reviewwere surveyed in a secret survey back in January, I think it was. The Fin Review said:

The chief executives were asked which of four options they would nominate as their preferred response to the company tax cut in Australia.

I'll explain the four options to the Senate and those listening: (1) returning funds to shareholders; (2) more investment; (3) increasing the wages of their existing workforce—a pretty honourable thing to do; or (4) increasing employment. We've heard the government going on and on about increased wages and increased employment opportunities. Surprise, surprise! More than 80 per cent of the top 130 CEOs who are members of the Business Council of Australia nominated one of the first two options—not improving employment and not improving wages, but one of the first two. Why should we be so shocked? Only 16 to 17 per cent nominated higher wages or employment. How many employees does that translate to from 16 or 17 per cent of the top 130 companies in Australia?

You see, I'm all for raising wages. On this side of the chamber, all we talk about is raising wages. We also talk about raising opportunity. I'm an ex-small-business man, which is more than half of that mob over there could claim. My wife and I did it hard. We reaped the rewards. We built our little business, we built our home and we raised our kids. We value the work ethic that was instilled into both of us by our parents when we were young: 'Work hard, get paid properly, keep working hard, bring up the kids and do the right thing.' But listen to the nonsense coming from over there! To think that international raiders like ExxonMobil did a filthy, dirty, grubby deal with five casuals in a different state to create an enterprise agreement so they could go back and undermine their workforce in Longford, where there were 280 people employed! I'm not from Longford; I'm from the west. There were 280 people employed in Longford. It's a community. There are sporting communities, the kids go to school together and the workers have barbecues together. They're friends and neighbours and they have been for many, many years. Meanwhile, ExxonMobil, who have enjoyed massive profits in oil and gas coming from the Bass Strait, decided they would use this grubby deal to undermine the 280 workers at the Longford plant. That mob over there, led by Senator Cormann, don't talk about this but they're happy to deliver tax cuts to ExxonMobil who will give you a job while the 280 long-suffering employees trying to negotiate an enterprise agreement are locked out. If you want to go and undermine the 280 workers you can walk straight through the gate and ExxonMobil will welcome you. Senator Cormann, I would love to hear how much taxation ExxonMobil will get back in your cuts. This is disgracefully misleading to the Australian people. It is an absolute insult, and this mob are nothing short of a disgrace.

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

You'd almost think that the Labor Party don't really want to debate the motion that they've just moved before the Senate. To be frank, given some of the activities of the last 24 hours and some of the briefings that are coming out from the Labor Party, I have to say I am starting to feel the ghosts of Labor past return from the Rudd-Gillard years, where 'policy turmoil' and 'policy implementation turmoil' were basically the buzzwords of how the Labor Party operated. The Labor Party try to talk about fairness, but I don't think they really understand what fairness is. They come in here and misrepresent numbers—they talk about a $65 billion tax cut to big business—and yet the background briefing is that they're going to back in the $30 billion of tax cuts that have already been passed for businesses with a turnover of up to $50 million a year; that's already done. We're now talking about a process in front of the parliament at the moment for $35 billion, but they can't go past the old talking points that continue with the $65 billion. Here we have something that the Leader of the Opposition furiously opposed last year in this place. But now, reportedly, the Labor Party are going to support it.

We had the Labor Party's retirees' tax, which was introduced, or announced, a couple of weeks ago. I think it was described by the opposition spokesperson for Treasury matters, Mr Bowen, as a policy that was well designed and well thought through—I think he even admitted a few weeks ago that it was going to hit pensioners. But we have here today a backflip from the Labor Party. Their current policy, which was going to raise them billions of dollars, hasn't lasted a fortnight. They claimed a couple of weeks ago that this policy was well organised, well thought through, well designed and fair. But perhaps it's not fair. I find it quite interesting that they continue to talk about fairness all the time, because I don't think they really do understand what fairness means and I don't think they really do understand what good policy development is. Quite frankly, I'm not sure what Bill Shorten really does believe. Back in 2011, Bill Shorten said—

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

Senator Fawcett, I remind you to refer to others—

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

As long as you refer to me by my right title, I'll refer to him by his!

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

I beg your pardon; my apologies!

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Mr Bill Shorten, the Leader of the Opposition, said:

Cutting the company income tax rate increases domestic productivity and domestic investment—

I agree with that. He went on to say:

More capital means higher productivity and economic growth and leads to more jobs and higher wages.

Now, the Labor Party seem to be arguing today that that's not the case. So my question is: what does Bill Shorten really believe in? He also said—

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

Senator Colbeck—

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Sorry, the Prime Minister—the Leader of the Opposition, Mr Bill Shorten—

Kimberley Kitching (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

He can be the Prime Minister! You can call him the Prime Minister!

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

No, I fear the day that ever happens, Senator! Mr Bill Shorten said, in an ACOSS speech on 30 March 2011:

… lowering the corporate rate for smaller businesses only (as the Greens propose) creates an artificial incentive for Australian businesses to downsize.

In worse case scenarios some businesses might actually lay people off to get smaller—and the size based different tax treatment would create a glass ceiling on business workforce growth.

Instead we want a level playing field regardless of the size of the company.

Yet we understand that the Labor Party are going to support the tax cuts for businesses that have already been passed by the parliament, which they opposed last year, and they're going to continue to oppose something that they said they didn't support last year. What do the Labor Party really believe? What does Mr Shorten really believe in? I do remember one thing: when Mr Shorten said, 'I'm not sure what the Prime Minister has said, but I agree with everything that she has said.' I think there's one question that we all want answered: what does Mr Shorten really believe in? (Time expired)

Kimberley Kitching (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

This is a tax cut that will benefit, primarily, foreign multinationals and their shareholders. Up to 60 per cent of the company tax cuts will go to foreign shareholders, and of course a company could take the tax cut and have more share buy-backs instead of giving their employees a wage rise. It is absolutely appropriate that companies act in their best interests. Under the Corporations Law, we refer to companies as 'corporate citizens' or as 'persons'—artificial persons. In that regard, they have their own stakeholders and their own shareholders and, not surprisingly, they like to address those people and to give them the benefit of investing in those companies.

But that's not the problem. That's actually not what these tax cuts are going to do. These tax cuts will benefit companies in a way that is unfair. Senator Colbeck just asked: 'What is fairness?' Fairness is about treating people equally. So maybe this is a wing-and-a-prayer sort of operation that the government is running and it actually has no policy development around looking at what companies will actually do.

Let's have a look at some of the behaviour—perhaps lawful, but certainly unethical—that has gone on and been highlighted in the last few months. Let's look at Glencore, which, instead of negotiating with its employees, decided that it would just lock them out. We welcome foreign companies investing here. But in Australia we do not seek to break employees' will by locking them out of their workplace rather than negotiating with them. It is abhorrent behaviour. Let's have a look at the economics committee's inquiry into corporate tax avoidance. ExxonMobil, a couple of weeks ago in Melbourne, gave evidence to that inquiry that not only have they not paid any tax for the last three years; they won't be paying any tax for the next few years. They couldn't actually give a date for when they thought they might be paying some tax. I say that this is unethical behaviour.

Is it really the government's hope that these companies are going to say, 'Oh, look: we've got a corporate tax cut, so we're going to go down a few per cent in the tax we pay, and what we're going to do with that is to give our employees some extra wages'? Aren't these companies actually going to go back to their stakeholders and shareholders and say: 'We're going to give you an increased dividend'? They're not going to pay out on the cost of their business; they're going to pay out on what they can give to their shareholders. I'm not saying that there is anything wrong with that. That's actually what companies should do. This government is pinning its hope on people behaving well, but there are the examples of Glencore and ExxonMobil, and, in fact, there are whole lists of companies that do not behave ethically and do not pay tax in this country.

This is unaffordable and it will burden Australian taxpayers. If you go to the federal debt calculator you'll see that, as of today, the federal government debt is $552 billion. It has doubled under this government. This government would have you believe that they are good economic managers. They are not. And they are suffering from the fact that they have had two weak treasurers, Mr Hockey and now the current Treasurer. No wonder Senator Cormann is leaving the chamber. He has many things to do, because he, apparently, is—

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

Senator Kitching—

Kimberley Kitching (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Through you, Chair: he is apparently running the ERC.

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

Senator Kitching, it's not appropriate to reflect on when senators leave the chamber.

Kimberley Kitching (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I apologise, Madam Deputy President. But, coming back to the fact this is a bit of a wing-and-a-prayer taxation policy, and to Senator Colbeck's suggestion that the Australian Labor Party has no idea of how to form policy: if Senator Colbeck were familiar with the Income Tax Assessment Act, he would know that that piece of legislation is full of subsection upon subsection, redrafts and amendments, and corrigenda. That act reflects the fact that taxation in this country has been a dog's breakfast, particularly in the last few years, and particularly when we saw the way that the government operated to get its last lot of corporate tax cuts through. I would say that the government is obviously— (Time expired)

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

It is with a heavy heart that I come to the Senate this afternoon. Nothing demonstrates the parlous state of economic literacy or understanding in this country, or indeed in this Senate chamber, more than the debate about the company tax cuts. That's for a couple of reasons. The company tax cut initiative of this government sits as a measure in the broader pursuit of wider economic reform and therefore greater future prosperity—yes, for Australian companies and businesses but also for Australian workers. The second point is that the politics of this, I agree, are very simple in the electorate. I absolutely accept that, for many Australians, understanding how the economy works in its minutiae is not top of mind for them, nor should it be. But that doesn't mean that the Labor Party and others can use politics to deny Australians this very important economic reform initiative, because it sits in a basket of other reforms.

Why can the coalition be trusted on this issue, when it comes to economic reform and management? It's because the coalition's management of the economy over the last few years has demonstrated that the coalition have been wise, prudent economic managers. The evidence speaks for itself. We have seen extraordinary job growth. When the issue of job growth gets mentioned in this place, no-one in the opposition denies the remarkable success that the coalition have enjoyed in generating jobs. Everyone knows that government doesn't generate jobs, but government does have a high degree of influence over economic management, and we see the success of that economic management in strong jobs growth. We have seen consumer confidence increasing in this country, not decreasing. Indeed, consumers are more confident now than they have been in the last four years. In addition to that, we've seen a strengthening of non-mining business investment. We have seen solid growth of five per cent in 2017-18, and it is expected to be seen in 2018-19. And we've seen strengthening new private investment. These are demonstrations that the coalition's economic management to date has been successful, and Australian families and Australian workers will enjoy that over time.

The corporate tax cut is an important initiative as part of this wider basket of economic reform initiatives. People need to ask themselves: why was it that the Labor Party, just a few years ago, could agree with the virtues of company tax cuts, and particularly agree with the benefits they deliver for Australian workers—and I'll come to that in a moment—but they can't agree to that in 2018? What is it that has changed in the laws of economics in just those last five years? What is it? I put to you that nothing has changed in the laws of economics. Everything has changed in the politics.

If former Senator Dastyari were here, he would remind me how I like to talk about the Hawke-Keating economic period. It is true to say that Keating did bring important economic reform to this country, and he did so because he had the bipartisan support, for many measures, of the coalition. The absence of proper bipartisanship on significant economic reform initiatives like this is hurting Australian workers. So I ask Senator Kitching, Senator Brown and Senator Urquhart: what was it that you could see in corporate tax cuts four or five years ago that led your leadership to endorse them, to speak in favour of them, when today, in 2018, you don't endorse them? What has changed? I put it to you that it's political expediency, the opportunity for politics. In the process of pursuing that opportunity for politics, you are actually undermining the very people that you come to this parliament and say you represent, because Australian workers will pay the price for a lack of company tax cuts in this country. Senator Kitching, you are absolutely right, but the problem is: it's not good enough to welcome international business to Australia; the conditions in the Australian economy must be such that it is an attractive place for them to invest. You know as well as I do that rising American interest rates, the company tax cuts in the United States— (Time expired)

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

Senator Smith, I remind you to make your remarks to the chair.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Today I asked Minister Fierravanti-Wells how it is fair that, at the same time the Turnbull government's freeze on family tax benefits will leave a family with two primary-school-aged children and a household income of $60,000 a year around $440 a year worse off, it's giving big business a $65 billion handout. In my question I referenced an open letter from 11 welfare organisations and representative bodies. The open letter reads:

We believe that a company tax cut is a mistake while almost 3 million people live in poverty.

It is unconscionable to pursue company tax cuts while refusing to raise the rate of Newstart and other allowances.

If the Senate allows these tax cuts to go through while the budget is still in deficit, further budget cuts are inevitable. We are concerned that already disadvantaged Australians may pay more for health, education and community services.

I sincerely want to thank those organisations for always bravely standing up for disadvantaged Australians, for issuing this statement and for calling the Prime Minister out for his unfair, unaffordable, illogical big-business tax cuts.

Minister Fierravanti-Wells's response was telling in that she did not mention families once—not once. She said that tax cuts would create more jobs. I questioned if she had read the report in the Financial Review today that over 80 per cent of Business Council of Australia CEOs who responded to a survey stated they would not increase wages or grow jobs as a result of big-business tax cuts. The minister then said, 'The best form of welfare is a job.' But my question was about family tax benefits. Those people have a job. The government have just frozen the increase in part of their tax refund. The minister might like to come back into the Senate and explain how family tax benefits relate to 'the best form of welfare is a job'. The minister then went on to pensioners and self-funded retirees, and her scripted attack on the opposition was overblown. The minister, as I said earlier, did not mention families once. Not once did the minister talk about children. Not once did she talk about low-income Australians doing it tough. It was just a rant—and it was a rant about pensioners and retirees. The minister concluded her answer with some more hysterics, stating that Labor is all about 'tax and spend'.

Minister, it is the very nature of government to tax and to spend. That's why we're all here. The minister should probably read up on the tax-to-GDP rate in this country. Under the government it's through the roof, and they have no plan to get it down. Where they have proposed to cut taxes to business, they have legislated to increase income taxes on working Australians, and they have further plans for more cash for business owners and less cash for workers. On Liberal Party economics 101—and I note that Minister Cormann, in many of his answers today, referred to economics 101 as though he were the professor and we his pupils—what Minister Cormann disclosed in his enthusiasm is that he knows nothing beyond the disproven theories contained in many first-year economics classes. Every time Minister Cormann uses this line, it's clear that he needs to go back to school and listen a bit harder in some of the more complex, later-year classes.

I hope that crossbench senators were listening to the responses of Minister Cormann and Minister Fierravanti-Wells, because they will decide the fate of the Prime Minister's unfair, unaffordable, illogical big-business tax cuts. We all know that there are millions of Australians who benefit from family tax benefits. For these millions of Australians—these children, these mums and dads—the family tax benefit is vital to making ends meet in the family budget. That $440 a year might not seem like much to some people in this place, but it makes the difference when choosing between turning on the heater on a cold day, buying that extra bag of groceries or buying that new pair of sports shoes for one of the kids.

I want to conclude my contribution today by noting that former Senator Lambie repeatedly used question time to ask tough questions of government about matters that impacted on the lives of Tasmanian families—those people who I represent. But I note that her successor's contribution to question time today did nothing—not one single thing—to stand up for Tasmanian families who are doing it tough and will continue to do it tough if this government gets away with the tax cuts for big business that it has proposed.

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

Thank you, Senator Urquhart. I remind advisers they are not to be on the Senate floor. I was reluctant to sit Senator Urquhart down at the time, but I do remind advisers that they are not to be on the Senate floor. The question is that the motion moved by Senator Sterle be agreed to.

Question agreed to.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by Senator Whish-Wilson today relating to proposed company tax cuts.

I want to get on the record that the Greens took a policy to the 2013 federal election for a tax cut for small businesses—businesses with a turnover of $2 million. That had been a policy since I'd started as a senator. Having run a small business myself, that was very important to me. And we achieved that. In here we all legislated for a tax cut for small business, and there was very little disagreement on that. Following that, we've had two additional tax rises for $2 million to $10 million thresholds and from $10 million to $50 million. The Greens have opposed both of those tax rises. We felt that it was justified to give some of the hardest working people in this country, in small business, whatever assistance we possibly could.

What we have here before us today is really clear. This is a government that has no evidence and no justification to support big handouts to the big end of town. I raised this in my speech last week—so I won't go through it in a lot of detail—and I noted that companies in Wall Street and on Nasdaq were clearly spending hundreds and billions of dollars of their windfall gains from their tax cut on share buybacks and returns to shareholders. A survey by Morgan Stanley of those two indexes, of some of the biggest companies in the world, showed that 44 per cent of CEOs said that they were going to buy back their shares or return money to shareholders.

Not only is this directly against the message the government are pushing in their justification, where they're saying that some of these benefits are going to flow to workers in wages, but it also totally undermines their theory that companies are going to take this tax gain and reinvest it back in their businesses, thereby stimulating economic growth, creating jobs, enhancing productivity and growing wages. If a company says, 'No, I'm not going to reinvest this money back in my business; the best thing for me to do is to put it back into my company's shares', which, incidentally, often helps the share price go up and helps their share valuations—and guess who that benefits; yes, senior executives and CEOs—and makes the very rational decision to suggest that they don't have the demand for their products, the business plan is in place, the pipeline of growth that the Prime Minister, the Treasurer and Senator Cormann continually refer to.

It makes a total farce out of their arguments that today a leaked document was given to The Australian Financial Review and commented on in the papers this morning. I challenge the government to table that document. Get in touch with your mates at the BCA and ask them for a copy of it. Clearly they're embarrassed that it's been leaked and clearly the implication was that they didn't like the results of that survey—hence they weren't going to release it. It clearly shows that only one in five CEOs had contemplated giving some of this money to workers in wage rises and that 80 per cent of the 130 CEOs surveyed said that they would consider using it for share buybacks.

So here we have a situation very similar to that in the US. What we have is a direct transfer of wealth from the Australian people—our revenue in government that we spend on essential services like our social safety net, investment in our children's future through secondary education and higher education and child care and preschool—to some of the biggest and wealthiest businesses in the world, who are saying: 'Thank you very much. I'll pocket that handout, and I'll do with it whatever I want.' Senator Cormann is happy with that. He made that clear in his response to my question today—'Let's leave it to companies to make that decision.' The decision that they are making makes a mockery of the key argument the Treasury secretary used at estimates to justify the modelling and the assumptions upon which their wage growth forecasts and their economic growth forecasts are predicated—that companies will reinvest this money in their business, thus enhancing productivity, driving up wages and enabling more people to be employed.

But company CEOs aren't saying that. They're going: 'Thanks very much. I'll buy back my shares. I'll return the money to shareholders. That's where I'll get the best bang for my buck, not reinvesting in the economy.' Of course there may be some investment from this tax cut back into the economy, but that's a very different thing to assuming that all that money is going to be reinvested in the economy. I would say, based on the survey results, that not much of it at all will trickle back to the workers, wages and reinvestment in the economy. That's why we need to vote down these business tax cuts. Senators who are undecided should please take note.

Question agreed to.