John Murphy (Lowe, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

He has, Simon. I rise to support the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2007. I support it solely on the basis that any reduction in taxation is a good thing for the public. However, this is a case of too little too late. I will reflect on that, because the member for Hotham said this in an earlier address-in-reply to the budget—and he will remember it when I get to it.

For reasons which I will put to the House, we make the retort, yet again, to this government that by doing good, they shall do much evil. What is the good in this bill? Obviously, there are reductions to personal income tax. At face value, that rings well in the ears of the public—until we look at the real impact and the net impact of this bill. This House and the public may ask: what are the real impact and the net impact of this bill? This bill is ultimately one of a raft of taxation bills proposed by the government. As a taxation bill, it falls within fiscal policy. It is a fruitful exercise to discern what real impacts, if any, these so-called tax cuts will have on the economy. In my view, when discerning the real impacts we must have regard, as the member for Hotham pointed out, to Mr Henry’s key impacts. These are known as the three Ps: population, participation and productivity. The three Ps are reflected upon in a Parliamentary Library article published on 21 May entitled Budget review 2007-08. The three Ps concern, inter alia, the following matters of fiscal significance: economic stimulation, particularly in the areas of job creation, job retention and productivity; impact on net and real disposable household income and thus influencing population issues, including disposable income, dependent spouse rebate, and Medicare rebate; and the relationship of tax deductions to the net inflation rate, a major variable in the participation rate through wages, costs on employment and, hence, inflation. The Budget review said:

It remains to be seen if the balance of measures provided by the Budget will be ‘too little too late’ ...

I note that this bill bears a striking, if not identical, resemblance to an earlier bill titled the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2003. I again cite part from the Budget review, under the chapter titled ‘Personal income tax and superannuation’:

Another Budget, another set of personal income tax cuts.

The Treasurer thinks we should be happy that we have seen tax cuts in every budget since 2002. However, looks are deceiving—and this budget is no exception. When you read between the lines as well as the financial figures, you see where the truth lies with our so-called tax cuts. As members will recall, the 2003 bill was first introduced into the House on 29 May 2003 and was passed by it on 4 June 2003. The bill’s assent was on 24 June 2003. The 2003 and 2007 bills have striking similarities. Indeed, I am reminded of the words of Field Marshal Rommel when he said: ‘They came in the same old way and they died in the same old way.’ He was referring, with irony, to the Duke of Wellington at the Battle of Waterloo.

The 2003 bill raised the ire of the Leader of the Opposition at the time—the member for Hotham, the Hon. Simon Crean, whom we have just listened to. He decried the 2003 bill. In his budget reply, he said:

The highest taxing government in our history has given you the smallest tax cut in our history. The Prime Minister and the Treasurer think that Australians earning between $30,000 and $50,000 a year are affluent and that they only need another $4 a week. But while they give with one hand they slug you with the other: up to $50 to go to the doctor, $32 per week extra in HECS debt and $125 per week to pay off your new student loan.

If this were simply about dollars and cents, the budget would appear to be a step in the right direction; however, there is little said about population as a discrete subject matter within any analysis of the three Ps. The Australian economy is one of gross imbalances. It is immoral that there can be fantastic sums of money offered to the corporate elites and the corporate masters. Obviously the corporate masters—Allan Moss, the Chief Executive of Macquarie Bank, and his investment banking chief, Nicholas Moore—enjoy an annual joint income of $66 million between them. The article titled ‘Trough-fest at millionaires’ factory’, dated 15 May 2007, notes:

Another four executives collected between $14.6 million and $22.9 million last year.

One may expect that these fantastic sums reflect performance based salaries and stipends at Macquarie Bank. If the corporate executives are doing that well then they ought to contribute more money than the paltry microshifts going on in these tax reductions and make a real difference to fiscal impact. Indeed, the spin being afforded is that these tax cuts are at the expense of the corporate world. Such adjustments are a drop in the bucket to the real costs on family and the environment because the real test of fiscal policy is indeed based on population no less than participation and productivity.

There is a saying that this House should remember: we are all slaves. This saying reflects the real economic disparity that our country has fostered. Are we supposed to be grateful for these tax cuts when excesses of greed are running at the rate where executives in Macquarie Bank—which is the notorious failed raider of our beloved corporate icon, Qantas, and a host of other utilities—could be so richly rewarded? If the economy is doing so well, why does our real population growth continue to flounder at less than zero? Why is our fertility rate languishing at 1.9 children per mother? Why is there one divorce for every two marriages? You may ask, ‘What has this got to do with fiscal policy?’ The answer is: population. Fiscal policy is a vital factor leading to healthy population activity. The words of my friend and previous speaker Simon Crean in 2003 are equally relevant today. This budget is indeed a case of ‘too little too late’. When we compare the budget to real outcomes, we are still left with aggregated government policy that is destroying family life through falling disposable household income.

I note in particular that in real terms access to education and the cost of education, including deferred HECS payments, places a person in debt for the remainder of their life. Banking fees and overall household debt continue to rise in Australia. On 15 May 2007, the Sun Herald reported information from the Australian Bureau of Statistics:

Total personal finance commitments fell 1.0 per cent in March, seasonally adjusted, to $6.690 billion compared with a downwardly revised $6.755 billion in February.

The ABS further noted:

Housing finance for owner occupation climbed 1.7 per cent to $14.523 billion from an upwardly revised $14.276 billion in February.

Despite the small decline in personal debt, households remain overstretched to afford housing and essentials of life. Australia is a nation living on credit. Any inflationary increase will trigger a debt level that the household sector will be hard pressed to meet. Despite this, we are led to believe that this fiscal policy is a success in population terms.

We are barely growing in population terms. Every year, it seems, the government must increase skilled and business migration quotas just to bring in more persons to fill the ranks of children that have not been born in Australia to native Australians. It is clear to me that the cost of marrying and living in family relations is simply too expensive, and would-be families are opting out of raising home-grown Australian families.

It is tempting to look at this bill purely in financial terms; however, fiscal policy is not a purely utilitarian exercise. Success can never be measured in purely financial outcomes. All the money in the world does not matter if families are shattered or never get off the ground, no matter how attractive a tax reduction may look. Equally, what does it matter how much money one has when the environment is ruined? The biblical saying holds true:

What does a man gain if he gains the whole world and loses his soul?

The analogy is to this present circumstance. We are told there is a record surplus—a bumper budget surplus—and there are tax deductions all round. However, we do not compare the financial benefits and costs to the social benefits and costs in true cost-benefit analysis. We ignore in this analysis the family breakdown rate in society, the financial factors contributing to our statistically high matrimonial breakdown rates and the abortion rates. If the economy is going so swimmingly, why are these social indicators not reflected in the economic good times we are supposed to be having?

I put to the House today that these tax cuts are a drop in the bucket. This means that the reduction in taxation is not meeting socially responsible outcomes of significance. Until these real costs to the financial benefits are married up, these tax cuts are puerile and insignificant. It is my firm belief that much more money will need to be injected into the household sector before we see tangible reductions in the social costs of divorce, suicide, single lifestyles, low fertility rates and so forth, which produce an economy that is sterile—that is, not growing of itself and increasingly dependent upon migration to sustain even its own existence. Equally, at a time when Australia becomes an ageing population, it is self-evident that Australia needs to address the population issue with added urgency. For this reason, fiscal policy must create the economic environment in which families can build with financial confidence to give them significantly greater disposable income so they can afford and have access to health, education and other necessities of life.

In this budget as in the succession of other budgets, to steal a line from Midnight Oil’s song, ‘the rich get richer; the poor get the picture’. The general public cannot conceive of a single individual like Allan Moss getting nearly $34 million per year. This is an unbelievable sum of money to the average Australian. The government says that the Australian taxpayer is getting a tax cut, but they are going into more and more debt in a bid to pay—guess who!—the likes of Macquarie Bank and the other banks for increasing mortgage debt in order to afford necessities of life. This demonstrates that in fiscal policy terms this government is not passing on the so-called productivity bonuses of the executives to the general public. The productivity gains are being hoarded by selfish, uncaring and greedy people.

Let us be blunt about the Realpolitik of this budget. Yes, it is true that the Australian public is working harder than ever. The Australian public is working longer and harder, yet the real gains are being enjoyed by a few in the corporate world. Huge profits accruing to the corporate world are being siphoned off, with the so-called executives getting fantastic sums of money while Australian workers must pay disproportionately high percentages of their incomes, leaving them in absolute terms with very low disposable incomes. Even if Mr Moss pays an extra $1 million in tax, he can easily afford a flagrantly affluent lifestyle.

However, homeowners must receive substantially more money if they are to have children, or even if their matrimonial relationships are to survive under the pressures of the ever-increasing financial costs of living. This bill is based on greed out of all proportions. The 2007 bill is too little too late. When we measure this bill against the effects of the still massively underfunded passing-on of financial windfalls to the household sector, we still find households that cannot afford to pay their children’s costs, medical costs, education costs and the general costs of marriage. Still the family is the subject of exploitation by the eternal greed of the likes of Macquarie Bank—the millionaires factory that glories in their grotesquely inflated, self-serving distribution of profits towards a board of directors who are not worth the estimated $206 million per year collectively.

I can only ask the question here today: what does one man do on a board that makes him deserving of nearly $34 million a year? What does Mr Moss do, on a day-to-day basis, to deserve $34 million? Receiving $34 million per year means receiving a little under $635,000 per week; even allowing for tax, that is not a bad take-home salary! It is the price of a new home every week. It is about 109 times the salary of the Prime Minister, who has to run a $1 trillion budget. It is absurd. It is staggering that the rest of us, under this government, are supposed to make our contribution under this draconian Work Choices legislation by making sacrifices for the so-called betterment of the economy, yet people who are on the board of directors of Macquarie Bank rake in $206 million per year collectively. Little wonder that people are saying to us that they have stopped listening to the government and that the government is getting tired.

It seems to me that the government are looking after those who really do not need looking after. We have seen it in much of the government’s legislation. I suppose the best example—the one I was most interested in—is in the government rewarding the two biggest media companies with a massive concentration of media ownership. It was just a shocking assault on the public and the future of our democracy. But the people of Australia will make a judgement later this year, and I suspect that they have tuned out from the government; perhaps that is why the polls are the way they are at the moment.

Let me finish by saying this. Let us be clear: until this government moves serious money into the household sector, our population policy outcomes and fiscal policy will reflect households with families that continue to be snookered by rising health, education and transport costs. Those people will continue to be compelled to spend what nominal gains they may get from these paltry tax cuts. Thankfully, people will get the choice—probably on 13, 20 or 27 October this year—to make a judgement of the government and to make a decision on whom they think this government really represents. It does not represent the people I represent in Lowe.

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