Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for the Public Service, the Minister for Finance and the Minister for Women (Senator Gallagher) to a question without notice asked by Senator Hume today relating to the Productivity Commission.

It was a very straightforward question from Senator Hume about the new appointment to the chair of the Productivity Commission and what the Treasurer examined before making that very important appointment. The Productivity Commission is a very important policy organ of the Australian government. Its advice over many decades has been treated with a great level of interest and has often been acted upon by Australian governments of both persuasions, particularly in regard to improvements to the economic efficiency of our nation.

Senator Hume's question raised the issue of the support for inheritance taxes by Treasurer Chalmers's appointment to the Productivity Commission. But this isn't the only policy area where the new chair of the Productivity Commission has made forays into the public domain. Another one was highlighted by my good friend and colleague Senator O'Sullivan in the West Australian just this past weekend. The new chair of the Productivity Commission has, in the very recent past—in fact, just a few months ago—written that one of the ways the Labor government can 'repair the budget' is to scrap the GST arrangements that have seen a floor being put in place for Western Australia—so, not just support for an inheritance tax by Labor's hand-picked chair of the Productivity Commission but also support for scrapping the GST deal that's put a floor in place for Western Australian GST arrangements.

Let me quote to you from an article authored by the new chair of the Productivity Commission. This was on 11 April 2023—as I said, just a few months ago:

Our report identifies a further $15 billion a year of savings measures, including undoing Western Australia's special GST funding deal …

Now, describing it as a special GST funding deal is I think an insult to every Western Australian. This was putting in place a floor below which no state could fall, at a time when Western Australia was in danger of receiving literally cents in the dollar of the GST revenues that were collected in our state. So, that arrangement was put in place on the back of serious work done by the then Productivity Commission. They did a review into it. The model that was chosen by the government at the time wasn't exactly what the Productivity Commission put forward. The government did choose to go down a slightly different path. But it was the review by the Productivity Commission that brought the issue to light.

Now we have a hand-picked chair of the Productivity Commission—Labor's hand-picked chair, Treasurer Chalmers's hand-picked chair—who, as Senator Hume has highlighted, supports not only an inheritance tax but also a scrapping of the GST arrangement, hard fought for by Western Australian senators, Western Australian members of parliament—on this side of the chamber, at least. When those opposite said it couldn't be done—politically impossible—it was hard fought for by members of this side of the chamber, Liberal members, Liberal senators. And now it's a savings measure. Now it's a way for the Labor government to achieve budget repair.

I would have thought that the Treasurer would actually have looked at these things, looked at poor policy prescriptions such as inheritance taxes, such as scrapping the GST arrangements that introduced a modicum of fairness into the system. I would note that all the floor means is that Australia gets back 70c or 75c in the dollar, instead of getting under 10c in the dollar. Think about that. As a wage earner, if you got 70 per cent of your pay packet instead of 100 per cent, you'd be a bit upset, I think. This hand-picked chair of the Productivity Commission is more of a reflection on the Treasurer and his priorities than we should all feel comfortable with.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I need to put on the record some response to some of the claims that have just been put and repeated, which are completely incorrect. A 'hand-picked chair' is a choice of words that reveals the cynicism and negativity of this opposition at every single turn. We have the first female chair of the Productivity Commission for the country, who has been selected in a merit based appointment process where there was a series of interviews. It was a merit based process involving interviews with two departmental secretaries and the APS Commissioner. Through that rigorous, transparent process, a brilliant woman has now become the first female chair of the Productivity Commission. And what have we got in terms of questions in here today? No acknowledgement of that significant appointment, which is manifestly important to women in Australia. The productivity of this nation matters to all of us. Blokes have had a go ever since we've been instituted as a nation. We've got a bright, amazing woman who's eminently qualified for the job, and we get these miserly, negative, damaging comments and questions from those opposite. The reality is that we need to have confidence and hope in our nation, not the fear and the cynicism which we have seen are so much a part of the former government and which continue and actually get worse by the day the longer they're in opposition.

I want to put paid to another critical suggestion. They just suggested that Danielle Wood is not a fit and proper person for the role. They have suggested that there is some sort of inheritance tax being considered. I just want to make it 100 per cent clear, despite the mischief of those opposite, that that is not going to happen. So let's just get rid of that mythology that is under construction at the moment as well.

We have a merit based appointment of Danielle Wood to do the work that should have been done over the last nine years. In fact, there was a series of incredible recommendations in the Productivity Commission reports that were delivered by previous commissioners. What did those opposite do when they had the treasury bench, control of the government and the opportunity to implement changes to improve our productivity? They squibbed it. There were nine years of wasted opportunity. What did they leave us with? They left us with the reality that we have the very worst productivity figures in 60 years. Senator Gallagher responded with those facts, yet we still have denial by those opposite.

Let's look at it. They talk about an inheritance tax that doesn't exist; they demean and diminish the appointment of the first woman to be the chair of the Productivity Commission; they deny the reality of their period of nine years of government during which they delivered the most appalling historical productivity figures; and they come in here and act as if they're holier than thou and they did a fantastic job. Well, the facts just do not bear out the reality that they're trying to construct.

We've got a choice here. Every single time we come to question time, we've got a choice with the answers that we give and the questions that are posed: to lift the nation or to diminish us. The questions we saw today are another example of the fear and cynicism machinery that is alive and well in this opposition. They have a bleak outlook about our country. They have a failure mentality. They constantly whinge and whine, and they diminish every achievement of our nation. Cynicism never built a thing. In contrast, we are a government of confidence: confidence in the Australian people and confidence in our capacity to lift and build a better nation. We are a government filled with hope and opportunity that will give our country a much better future. Optimism is a state of mind that is absolutely missing from the miserly, diminishing sorts of questions that we get from this opposition day in, day out. We should expect with confidence that the new chair of the Productivity Commission, Danielle Wood, who is originally from Adelaide and has an honours degree in economics from the University of Adelaide and master's degrees in both economics and competition law from the University of Melbourne, will do a great job. They should get on board.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

What was distinctly absent from Senator O'Neill's contribution there was the extent to which Ms Wood has actually contributed to the debate on productivity in our country. My major concern here is that the—

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

She just got the job, Matt. Give her a go. She's just been appointed.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I'll take that interjection, Senator O'Neill! You've appointed her to lead the Productivity Commission, not work in it! If she's going to lead it, you'd think you'd be able to point to a record of Ms Wood advocating for significant policy reform in this country which would deliver productivity growth. I've read some—not all, of course, but some—of what Ms Wood has contributed to the public policy debate since her appointment and it seems to me that she has been extremely devoted to looking at tax increases, as we have described here this afternoon, and to extra spending on child care. As admirable as these debates are, they don't go to the core issue of how we lift our productivity growth.

I should put on the record of this contribution that I worked for the Productivity Commission; I was a graduate there. It has been a hugely influential institution in our country but I think its influence has waned over the past decade or so. The original debates it had on microeconomic reform and economic rationalism have waned somewhat from the policy debate and it has struggled to find a new footing to contribute to Australia's public policy debate. I think it's regrettable that the Productivity Commission has said very little about the energy policy debate—very little at all, despite probably being one of the most important microeconomic policy challenges that we face today.

It's very important to understand what the Productivity Commission is meant to be. It's quite a unique organisation around the world. It's meant to be an independent form of advice to the government on microeconomic matters—not on taxation matters, which I mentioned that Ms Wood has taken a particular interest in, and not on the fiscal balance, which she has also contributed greatly to, but on microeconomic reform matters. And we need a voice on those matters right now, given the parlous state of productivity growth in Australia. Just over the past year, productivity has fallen by around 3.6 per cent. That's the biggest fall we have ever recorded while we've been measuring productivity in this country and it directly means that Australians will be poorer over time unless we can rectify that situation.

Prior to her appointment to the Productivity Commission, Ms Wood headed up an organisation called the Grattan Institute. The Grattan Institute was founded by the former Rudd and Gillard governments; they were given a grant by them and have traditionally always come from the left side of politics and provided a left-wing conversation or elements in the public policy debate. It greatly concerns me that this has been a partisan appointment by the Labor government. As qualified as Ms Wood is, she will be, unfortunately, tarnished by the fact that she headed up an organisation that was set up by a former Labor government to pursue Labor ideas. That's why they gave them funding and that's why the Grattan Institute almost always advocates for higher taxes and higher spending, as Labor governments traditionally do.

Whatever your views are here on the merits or otherwise of high taxing and high spending, it's pretty hard to establish a case that higher taxes and higher government spending lead to higher productivity growth. That's not the historical record on these matters. You may want those higher taxes and higher spending, regardless of their impact on productivity growth, for other reasons, but it's a massive missed opportunity by the government here that we have not seen the appointment of someone who is widely respected in the economic policy-making field, who is not seen as partisan and who actually has a clear record in being able to advocate for policies that may sometimes be uncomfortable for the Labor government but which are the hard truths which we desperately need people to tell Australians right now.

If there is one thing which is absent from our public policy debate, it is some hard truth—the hard truth that we cannot keep spending billions and billions of dollars on extra debt every year and expect to get away with it. There is the hard truth that one of the reasons our inflation is out of control is because we no longer take control of our own energy destiny. There is the hard truth that tough decisions—difficult decisions—must be made to restore our economic strength and prosperity. That's because at the moment we're taking the lazy decisions of increasing government spending and advocating for higher taxes, and those will not deliver economic prosperity to the Australian people.

It should be noted that Ms Wood has advocated for an inheritance tax and that there are Labor senators, like Tim Ayres over there, who have long advocated for an inheritance tax. This should send a chill down the spines of all Australians, because the Labor Party has pretty much never seen a tax that they don't want to put on their backs.

Karen Grogan (SA, Australian Labor Party) Share this | Link to this | Hansard source

What a fascinating conversation! What a fascinating debate we're having here! I would like to start off by offering my congratulations to Ms Wood as a fellow South Australian. She is touted as an outstanding economist, and her background would give rise to her being a great candidate for this role. So I don't think it's any major surprise that she made it through a merit process overseen by the APS—a normal merit based process that we would expect for such a position. I don't think there's anything here other than those opposite showing us again and again and again that they have neither respect for nor commitment to women. I can see no other reason why you would have such a problem with Ms Wood as opposed to another candidate.

The point has been raised by Senator Canavan that he knew more than Ms Wood while he was a graduate in the Productivity Commission, that he spent time as a graduate in the Productivity Commission and that he was probably better placed than her. He points to the fact that she has run an independent think tank. In case anyone is unsure, that's a place where you independently think. That is exactly what we want from the Productivity Commission. We're not going to continue on the same pathway as those opposite, who commissioned report after report from the Productivity Commission and proceeded to ignore every last one of them. What we're doing here—what the Labor government is doing here—is looking to the Productivity Commission for ideas, for that independent thinking and for that investigation into critical issues. So, no, it doesn't seem particularly surprising to me that we would pick someone who's had that kind of depth of experience.

Sarah Henderson (Victoria, Liberal Party, Shadow Minister for Education) Share this | Link to this | Hansard source

'We' would pick someone? 'We' would?

Karen Grogan (SA, Australian Labor Party) Share this | Link to this | Hansard source

I'm not going to go to your interjections. If I misspoke, we'll clean it up afterwards. The narrow and inflexible thought process from those opposite is a missed opportunity from those opposite. We have looked to find someone, through a merit based process, who can give us that breadth of thinking. We are not going to shy away from that. Some of the accusations are just ludicrous.

Now, yes, Ms Wood has indeed advocated various things that the Labor government may not wish to pursue. We are not looking for somebody who has a particular way of thinking; we're looking for someone with an open, inquiring way of thinking to boost the efforts of the Productivity Commission so that it gives us the kind of broad thinking that we need to help develop how we're going in this country, because we have had 10 pretty shabby years. And, no, we don't need somebody who agrees with everything that the Treasurer says. That is not what we're looking for at all.

To echo the comments of my colleagues, Labor has no plans for an inheritance tax. That's just the fact of it. We do not. That is not where we're going. Minister Gallagher has been very clear. Senator O'Neill has been very clear. The Treasurer has been pretty clear. This is not what we're looking at the pathway of. So we can just put that one to bed. Just because one person who is in the employ of a part of the government has a particular thought does not make it government policy. Maybe in your day it did, on the other side of the chamber, when you employed in a narrow fashion, but that's not where we are. We're not afraid of ideas, we're not afraid of debating things, and we're not afraid of putting people who have excellent backgrounds and excellent credentials and who will challenge the thinking into positions, as we have by putting Ms Wood in the Productivity Commission. She is an excellent appointment.

Alex Antic (SA, Liberal Party) Share this | Link to this | Hansard source

That was illuminating, I think we'd have to say. I think Senator Grogan just said the quiet part out loud when she said 'we', meaning the government, appointed this new productivity commissioner, Ms Wood. My understanding is that the Governor-General makes that appointment, under the legislation. But we learn something every day! And we know that this Labor government does have a top-down, central control approach to government, so why should it be any different in respect of this particular appointment?

We've made the observation many times over the last 18 months or thereabouts—I've made it many times myself—that we on this side of the chamber said prior to the last election that it was not going to be easy under Albanese, to coin a phrase. I think it becomes clearer every day that that was quite prophetic. We're seeing example after example. If you're a homeowner it hasn't been easy under Mr Albanese, as a result of the interest rate rises. For households it has not been easy seeing massive increases in energy bills. Families have seen massive spikes in shopping bills over the last 18 months, primarily, I would say, as a result of this government's reckless energy policy and the war on cheap energy.

No-one on that side of the chamber is saying it. They're all saying, 'We don't have any plans to introduce an inheritance tax,' despite the fact that they've got about a thousand champions for an inheritance tax. But, as a result of this decision, it's very clear we're now looking down the pipeline into the brewing battlefield of death and inheritance taxes by stealth. They're coming. We can see it. We've been saying it for a while. My colleague Senator Gerard Rennick has been talking about this for a while. Senator Canavan pointed out that Senator Ayres has a particular penchant for an inheritance tax. Who wouldn't? What self-respecting leftist wouldn't love the thought of taxing—

That's right. Thank you, Senator Henderson. The appointment—sorry, the selection by the Labor Party, or the Star Chamber, depending on who you ask in this room—of this new chair of the Productivity Commission has—

Karen Grogan (SA, Australian Labor Party) Share this | Link to this | Hansard source

The APS is not a Star Chamber.

Alex Antic (SA, Liberal Party) Share this | Link to this | Hansard source

I'll take that interjection, Senator Grogan. You were the one who said you picked her. This is like the famous election night when one of the ABC commentators—

An opposition senator: Maxine McKew.

Maxine McKew, said, 'We've lost the election'—'we've'.

Okay. Whatever. You mixed your words and said the quiet part out loud. In any event, the message is quite clear: Australians beware. We on this side of the chamber have told you it ain't going to be easy under Albanese. It's getting worse, by the way.

People should have a right to keep their money. There are a range of reasons. I could put on a clinic now, with a whiteboard and a marker and laser pointer, as to why high taxes are a bad thing. Let's add inheritance tax to the list. Money belongs to those who earn it, and, in the case of those who've earned it, the right to pass it on to their family and friends or whoever they choose in a testamentary capacity is the same right, in my respectful submission.

We also know that this is not the land of unicorns and fairies. I remember vividly my time—it felt like 4,000 years or so—in local government when a very left-wing local government councillor told me that there were a lot of people who liked paying taxes. 'You know, Alex,' she said, 'there are a lot of people who like paying taxes.' My response to that was, 'Yeah? What's his name?' I don't know anyone—not anyone in their right mind—who does. That's because private individuals use their money much more efficiently than governments do.

This is another example of a grab for money that will just get thrown into a pot of bureaucratic waste. High taxes discourage work. People should have the right, under the system we have, to do what they will with their money. They have a testamentary right to do that. We are now seeing the creep towards an inheritance tax future for this country. Don't take my word for it; take the word of the incoming productivity commissioner, who wrote in the Sydney Morning Herald back in December:

Growing inheritances pose a quandary for our political leaders. Taxing inheritances makes a lot of sense from both an economic and fairness perspective. Taxes on inheritances drag on the economy less than other taxes, such as income taxes. Inheritances taxes also promote what economists call "horizontal equity"—ensuring that people in similar economic circumstances pay similar amounts of tax.

Question agreed to.