Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

My simple question is to the Minister representing the Prime Minister, Senator Cormann. It was revealed in March that in the Business Council of Australia's letter to senators, Australia's biggest businesses deleted a commitment to 'increased wages'. If the Senate passed the Turnbull government's $80 billion handout to big business, has the Prime Minister now secured a guarantee from business leaders to increase wages if he gets his way and hands $80 billion to big business?

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

If the Senate passes our business tax cut proposal in full, wages will be higher than they otherwise would be. There's no question because investment will be stronger, growth will be stronger, the opportunity for business to expand will be stronger, and businesses that are more successful will hire more people. Businesses that are more successful across Australia, hire more people. There is no competition—

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

Senator Sterle, on a point of order?

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

On a point of order of relevance, I clearly asked the minister, 'Has the Prime Minister secured a guarantee from big business to deliver wage increases?'

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

You have restated the question. I cannot instruct the minister how to answer a question. He is being directly relevant to the question you asked. Senator Cormann.

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

Thank you very much, Mr President. When Labor lost government, the economy was weakening and unemployment was rising, and rising unemployment means less bargaining power for workers and lower wages growth. We have worked hard to turn that situation around. Economic growth is strengthening and more jobs are being created. As more jobs are created, the bargaining power of workers increases and they are able to secure higher wages. Now let me read this to you:

Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

That was from Mr Bill Shorten, House of Representatives, on 23 August 2011 while in opposition. Listen to what shadow Treasurer Chris Bowen had to say seven months before we committed to lower the corporate tax rate to 25 per cent. He said:

Labor accepts that company tax falls hardest on workers rather than wealthy shareholders, and aims for a 25 per cent company tax rate to spur economic growth …

Asked if he accepted former Treasury secretary Martin Parkinson's statement that company tax falls hardest on workers, Mr Bowen told the AFR tax reform summit on Tuesday:

It is a statement of fact which I agree with.

He also said:

I would like to see the corporate tax rate come down over time. I have previously said the nation should be aiming for a 25 per cent corporate tax rate.

Mr Bowen added that it would not be easy to do. We found out it's not easy to do, because the Labor Party is intent on selling Australian jobs overseas. You are intent on selling out the best interests of working families around Australia.

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

Senator Sterle, on a supplementary question.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

The leaked letter also revealed that Australia's biggest businesses deleted a commitment to create more Australian jobs in the cities, suburbs, towns and bush. To the minister: has the Prime Minister now secured a guarantee from business leaders to create more Australian jobs if he gets his way and hands $80 billion to big business?

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

Firstly, I don't accept the premise of the question. Secondly, the reference to a $80 billion tax giveaway to big business is false, and the Labor Party knows that. Repeating a lie doesn't make it true. The Labor Party doesn't understand basic economics. A more successful business will hire more Australians. A less successful business will hire fewer Australians.

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

Order, Senator Cormann! Senator Wong, on a point of order.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The point of order is on direct relevance. This question is about a leaked letter which revealed that the commitment to creating more jobs was deleted by business leaders. That is what we're asking about.

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

Senator Cormann is being relevant to the question as asked, in my view, Senator Wong.

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

The Labor Party do not understand basic economics, which is why they left behind a weakening economy and rising unemployment when they last lost government. Businesses will not pay higher wages because they want to but because they have to. If more jobs are being created and there's more competition for workers, then, of course, they'll have to pay more to secure their services. That has always been the key ingredient to stronger wages growth. Stronger wages growth is secure on the back of stronger economic growth and more jobs. Guess what? Higher taxes under Labor will lead to less investment, lower growth, fewer jobs and lower wages. Lower taxes will mean stronger growth, more investment and, of course, higher wages. (Time expired)

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

Senator Sterle, a final supplementary question.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

The leaked letter also revealed that Australia's biggest businesses deleted a commitment to 'pay our tax'. I ask a very simple question: has the Prime Minister at least secured a guarantee from business leaders that they will act consistently with the law and pay their tax, Minister?

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

Of course there's a guarantee that businesses around Australia have to pay their tax. It's called the law, and it's called enforcement action by the Australian Taxation Office. If you look at what the tax commissioner, Chris Jordan, told Senate estimates, he's pointed out that the tax office expects to raise $10 billion more, in this coming year, from the high end of town, as you call it—from multinationals—as a result of stronger growth, more jobs and our effective action against multinational tax avoidance. We've passed the multinational tax avoidance laws. We've passed the diverted profits tax laws. We've passed law after law and taken initiative after initiative to ensure that multinationals pay their fair share of tax. This next year, according to the tax commissioner, more than $10 billion more in revenue will be raised as a result of our action in terms of better policy and better enforcement action. Under Labor, higher taxes will mean fewer jobs and lower wages. Under us, lower taxes will mean more jobs and higher wages. (Time expired)