Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Prime Minister. Does the Prime Minister stand by his statement in 2005: 'There are structural aspects of our tax system which enable people to reduce the overall amount of tax they pay. Trusts are one'? How is it fair that high-income earners can reduce the amount of tax they pay through trusts but normal wage earners simply cannot?

Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I do not claim to be an expert in the use of trusts. I do not have a family trust. I can say I personally am not very good at tax avoidance. I have paid a lot of tax and I have done so gladly. I am not an expert in this area. But I would say, being very serious about this, the reality is that trusts are used largely by small and medium businesses—overwhelmingly. The honourable members know that. Indeed, I want to quote the Leader of the Opposition when he was the Assistant Treasurer and Minister for Financial Services in 2011. He was the minister responsible; he had all of the advice; he knew all about it. He knew a lot more about this area than I do; that is for sure. He said he was against a proposal to have trusts taxed like industry at the company rate because—these are his words, not mine—'it could see thousands and thousands of family businesses pay far more tax than they are at present'. Then, the month before, in a speech to the Taxation Institute of Australia in Brisbane, the then Assistant Treasurer, the member for Maribyrnong, said: 'We don't believe trusts are any form of tax avoidance. We see trusts as a legitimate feature of how Australians conduct their financial affairs.' That was his position there. There are many other examples of that.

But the reality is this: we have policies which are encouraging investment and employment. We have seen 240,000 jobs created in the last year. 'Jobs and growth' is not a slogan; it is an outcome. What has the Labor Party got plans for? Higher income taxes; higher company tax; higher small business taxes; higher housing taxes; higher investment taxes. The Labor Party's policies are, all of them, designed to discourage investment and discourage employment. I repeat: as I said in my earlier answer, when the Leader of the Opposition was pressed on this by Fran Kelly as to what his policies were going to do for jobs, he stumbled and bumbled and proffered a great interest in public transport as the answer. We all like catching the tram, I would say to the Leader of the Opposition, but you have to do a lot more than that if you want to create a 21st century economy.