Malarndirri McCarthy (NT, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Cormann. Yesterday, the minister told the Senate that, under the Turnbull government's corporate tax cuts, 'wages will be higher'. Why does business refuse to give the same guarantee?

Government Senators:

Government senators interjecting—

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

Order! Colleagues on my right, I will ask for silence during the question, again.

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

My statement was a statement of economic fundamentals—economics 101. If you attract more investment and generate stronger growth, and more jobs are being created, as they are under our government, then there is more competition for workers. As you start depleting the excess supply in the labour market, and if there is stronger demand for workers and less supply of workers, of course wages will go up. That is a very basic economic fundamental.

When we came into government, the economy was weakening, unemployment was rising—which is, of course, part of the reason why we went into a period of lower wages growth, because if wages had grown more strongly at the time of a weakening economy and rising unemployment then more people would have ended up unemployed. But what has been happening, as a result of our plan for a stronger economy and more jobs—as more than a million new jobs have been created in our period in government—is: of course, the excess supply in the labour market has continued to deplete. As more jobs are being created, there is more demand for workers and less supply of workers. That is basic market economics. Stronger demand and lesser supply drives prices up. If you've got lower demand and higher supply, prices go down. That is basic market economics.

I know that the Labor Party don't—

Opposition Senators:

Opposition senators interjecting—

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

So, under Mr Shorten, taxes on business will be higher, so there will be less investment, lower growth, fewer jobs, higher unemployment, less competition for workers and, consequently, lower wages. Under our plan, there will be lower taxes on business, which means there will be more investment because we compete for investment with countries around the world. There will be more investment. There will be stronger growth. There will be more jobs. There will be lower unemployment. And, as there is lower unemployment and stronger demand for workers, there will be higher wages. (Time expired)

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

Senator McCarthy, a supplementary question?

Malarndirri McCarthy (NT, Australian Labor Party) Share this | Link to this | Hansard source

Yesterday the minister told the Senate that, under the Turnbull government's corporate tax cuts, 'investment will be stronger'. Minister, why does business refuse to give the same guarantee?

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

The senator just confused, here, the decision-making of individual businesses and the decision-making of businesses across the economy in aggregate. The truth is: if taxes are higher, the Australian economy will attract less investment. There's no question about that. If you make it harder for business to be successful, business will be less successful. If you make it harder for business to compete with businesses in other parts of the world, they will be less viable and less profitable. A less viable and less profitable business will hire fewer people. All of this is basic common sense. None of this is rocket science. This is the way the market has worked since time immemorial.

Some people have tried an alternative method. Some people have tried the socialist method of pursuing equality of outcome. They've tried the method of dragging everyone down to the lowest common denominator. And do you know what happens? Everybody ends up poorer. We want Australians to be better off. We want them to get the best possible opportunity to get ahead. (Time expired)

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

Senator McCarthy, a final supplementary question?

Malarndirri McCarthy (NT, Australian Labor Party) Share this | Link to this | Hansard source

Given that business leaders actively deleted commitments to higher wages and increased investment from their draft letter to senators advocating for corporate tax cuts, why is the Turnbull government continuing to mislead Australian workers?

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

The government is being very candid and very honest with the Australian people. Here's a newsflash for you: business wants to pay as little as they can for anything they buy, whether it's products, whether it's services, whether it's their workers. And workers want to get as much as they possibly can get. And then there is the market; there is supply and demand. Business will not pay higher wages because they want to but because they have to, because if they want to manufacture products, if they want to deliver services, if they want to export products and services around the world, they can't do it without a workforce. And the more successful they are in creating products, in building things, in selling products and services around the world, the more workers they need. As they want to hire more workers than they otherwise would, competition for workers will be stronger than it otherwise would be, and the workforce across Australia will have more bargaining power than they otherwise would. Under your government— (Time expired)

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

My question is to the Minister representing the Treasurer, Senator Cormann. Can the minister please update the Senate on what has happened to company tax revenues since the government legislated the first stage of its enterprise tax plan?

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

I thank Senator Paterson for that very important question. This morning I released the Australian government Monthly Financial Statements for the 2017-18 financial year to the end of May 2018. They show that revenue from company tax this financial year has increased by another $1.1 billion since the most recent budget was released only last month. This means that, since the Senate passed the first three years of our Ten Year Enterprise Tax Plan, revenue from company tax, just for this financial year, has increased by $9.2 billion—that's right. So, at the 2016-17 half-yearly budget update, which was the first one after the 2016 election and the last one before the Senate passed the first three years of our Ten Year Enterprise Tax Plan, the expectation was that businesses would pay $78.6 billion in company tax revenue in 2017-18. Based on the official numbers, on actual revenue collections to the end of May 2018, one month out from the end of the 2017-18 financial year we are now expecting company tax revenue to come in at $87.8 billion. That's right: $9.2 billion more than estimated at the 2016-17 MYEFO. And of course to the end of May 2018, these are actual numbers—actual numbers.

This demonstrates that the government's plan for a stronger economy, for more jobs and to repair the budget is working. The reason we're collecting more revenue is stronger growth, higher than assumed commodity prices and strong multinational anti-avoidance measures and tax enforcement action. Not only do lower taxes help Australian businesses to employ more workers but also more-profitable businesses pay more tax, which helps Australian families to get ahead and helps the government to fund the important and essential services that Australians expect their government to provide.

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

Senator Paterson, a supplementary question.

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

Minister, what impact are the government's reforms that prevent multinational avoidance and profit shifting having on company tax paid in Australia?

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

The Australian government is continuing to take strong action to ensure that multinationals and all companies across Australia pay the right amount of tax. The evidence is that these measures are working. The establishment of a Tax Avoidance Taskforce within the ATO, along with the ATO's cross-border compliance activities, has resulted in $2.7 billion being clawed back from multinational companies operating in Australia. The government's actions to broaden the scope of large multinationals being subject to the multinational anti-avoidance law and diverted profits tax has resulted in 44 taxpayers bringing their Australian-sourced sales back onshore, which the ATO expects will result in an additional $7 billion in income being returned to the Australian taxpayers per annum. In addition, approximately $461 million in additional GST has been paid in 2017-18, to the end of May 2018, as a result of some global entities restructuring in response to the multinational anti-avoidance legislation we passed. A total of 318 multinational companies are now under active audit— (Time expired)

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

Senator Paterson, a final supplementary question.

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

What would the impact be of increasing taxes on business?

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

Higher taxes on business will mean fewer jobs and lower wages. Mr Shorten stands for higher taxes, less investment, lower growth, fewer jobs, higher unemployment and lower wages. That is what they delivered when they were last in government and that is what they want to inflict on the Australian people again. The government want Australian families today and into the future to have the best possible opportunity to get ahead. That is why we want to ensure that the businesses that employ them have the best possible opportunity to be competitive, viable and profitable into the future, and that is why we stand for a lower, globally-more-competitive business tax rate. It is all about making sure that working families across Australia have the best possible opportunity to get ahead and to be successful.