Scott Morrison (Cook, Liberal Party) Share this | Hansard source

Before making comments on the substantive elements of the Tax Laws Amendment (Budget Measures) Bill 2008, I think it is important to discuss why we are discussing the bill now. In 2007 a total of 168 bills were introduced in the House of Representatives. It is a well-established convention that bills are not debated in the week that they are introduced—as has been done with this one—to allow the various political parties and Independents the opportunity to scrutinise the legislation and take it through an internal party process, such as a caucus or a coalition party room, so there is an opportunity for this parliament to provide the proper scrutiny. This is why I particularly support the amendment put forward by the coalition, those who sit on this side of the chamber, to ensure that this bill, amongst others I am sure, receives the proper scrutiny.

Of those 168 bills introduced in 2007, only 11 were introduced and passed in the same sitting week. Five bills actually comprised the package of legislation to establish the Northern Territory emergency intervention. Three bills related to welfare support payments required before the end of the financial year, including a bill related to pensions for war veterans. That was essential legislation, urgent legislation, emergency legislation. One bill related to the Australian Crime Commission. One bill was to establish the superannuation co-contribution scheme before the end of the financial year. The final bill was to introduce the stronger safety net for workplace relations.

In all 11 instances that they broke with this convention, the Howard government made an argument. They actually came into this place and made an argument for extreme urgency and ensured that the Senate was sitting to facilitate urgent consideration by both chambers. That has not happened in this case. In every circumstance where the former government overrode convention, the case for urgency was made by the fact that the Senate was also sitting along with the House and, therefore, the bills were available for full passage through parliament. The fact that the Senate is not sitting this week exposes the motives of the government in bringing these issues before the parliament today and ensuring that they are rammed through the parliament at this time.

There are no grounds for urgency here. I have heard no statements for urgency in this place today, none at all. The House is sitting again next week and, even if they are passed urgently today, the bills cannot be introduced into the Senate until the week beginning on 16 June. Even then, those bills are still subject to referral to a Senate committee. What we see here is not urgent legislation. What we see here is the product of those in the Prime Minister’s war room who have decided: ‘We really don’t want to have this debate about things like petrol in this place today. We really need to get something else out there on the agenda. We really need to tie this parliament up in other issues and spring this on those opposite to make sure that there isn’t the opportunity to really hold the government to account.’

So in opening my remarks on this bill I condemn those opposite for the way they have behaved in bringing this before the parliament. When they have an urgent bill, maybe they would like to make a case for it and in those cases, if there is a statement of urgency, then I am sure there would be support from both sides to ensure these things can be dealt with. But not for stunts like this.

Coming to the bill before us, this is a $1.4 billion effort as part of the Labor Party’s $19 billion tax grab in this budget. It is $1.4 billion out of the $19 billion tax grab outlined by the Treasurer in this place not that long ago. This was a budget that was supposed to be an inflation-fighting budget, but you cannot fight inflation by increasing taxes. You cannot fight inflation by putting taxes up and therefore prices. We saw this with fuel in the debate we have had before the parliament to date. The government wants to watch fuel prices; we would actually like to cut them by cutting fuel excise, by actually reducing taxes. That is one way of actually reducing prices, but this seems to be lost on those opposite. The coalition has form on cutting taxes on petrol and diesel: a 6.7c a litre cut on excise in 2000 and a further 1.5 per cent cut in 2001. There was also the abolition of indexation, which all meant that today petrol prices in this country are 20c a litre less than they would have been were it not for those measures introduced by the Howard government.

If the government wants to cut inflation, here are some suggestions. It needs to do something about wage pressures in our economy and inflationary expectations. Inflationary expectations have risen since this government was elected. People’s expectations of where prices are going to go are now at 4.3 per cent. Is there any surprise that inflationary expectations have risen when the government and the Treasurer in particular and the Prime Minister in this place are obsessed about talking about genies and bottles on the eve of Reserve Bank meetings? They have been talking up inflationary expectations as part of a deliberate political strategy.

The other thing we have seen is that the Reserve Bank of Australia Bulletin in May of this year, the current edition, has some interesting figures on median inflation expectations not just by economists but by union officials. Those figures show that in November of last year, at the time of the election, the median inflationary expectations of unions were three per cent. By February they had got to 3.5 per cent. Now they are at four per cent and they are rising. But the interesting thing is that the median inflationary expectations of union officials are a full one percentage point higher than those of the economists served by the Reserve Bank. Is it any wonder that we have union fuelled inflationary pressures now building on our wages and we read headlines in the Australian of 17 per cent wage rises demanded by unions? These were things that were warned of by the coalition going into the election and these are things we are now seeing coming to pass.

This bill is a grab bag of opportunistic and ill-considered measures. It is not designed to fight inflation, as I have just argued; it is designed to do something very different, and that is simply to grab $1.4 billion any which way they can. This is not something we heard about before the election. We did not hear about $19 billion of additional taxes as the Prime Minister wandered around the country on his crusade. This is a government that ran a campaign prior to the last election based on a massive con, a massive deceit and a massive fraud. There was no mention of $19 billion in new taxes, there was no mention of means-testing the baby bonus, there was no mention of dismantling private health insurance, there was no mention of U-turning, watering down, the Northern Territory intervention and there was no mention of fining petrol retailers for reducing petrol prices. I stand corrected: there was one Labor member opposite who was very honest in the chairman’s lounge in Melbourne on that fateful day when he spoke to Steve Price. The member for Kingsford Smith said, ‘We’ll change it all.’ And when pressed on this point, what did he say? ‘I was just kidding, I was just joking, I was just larking about.’ We know now that he was not larking about. We know that the member for Kingsford Smith was dead serious. He said, ‘We’ll change it all,’ and they are changing it all, much to the disadvantage of Australians living right across this country.

This government deliberately raised expectations on grocery prices and fuel prices. I say to those opposite that the Prime Minister has made his bed on this issue and he can lie in it. He is the one who paraded around saying they could do something about this. He is the one who said that it could all change. And when he gets into the job, within a matter of months he says: ‘That’s all we can do. We can’t do any more than that.’ What I suggest is that they never intended to. There was never any serious intention to follow through on this perception that they allowed to be created out there in the public. I say the only difference between the Prime Minister and a former Leader of the Opposition, the former member for Werriwa, Mark Latham, is this: Mark Latham was found out before the election. He was found out well before the election and the Australian people made their judgement when they found him out. The Australian people are now finding out about this government. They are finding out about this Prime Minister, who allowed people to think that he was going to change all these things, that he was going to improve conditions when it comes to petrol prices and improve things when it comes to grocery prices. But when the acid test comes on the government, he had no intention of delivering, and they know this.

This bill is totemic of this approach. As I said, it is a grab bag of measures which I think display a very poor judgement. It betrays Labor’s politics of envy and punishment, which is written all through the documents of the budget, punishing those that they simply do not like. I think it betrays a real desperation and inexperience. I am sure those opposite would have seen, as keen students of politics, that great film The Candidate, which had Robert Redford in it. And there he was, totally minded by the minders all the way through the election: the golden smile, the five-point plan, the clever answers—all of this. And there he is on election night and he wins, and he has this look of shock on his face. He turns to his adviser and he says, ‘What do I do now?’

And that is what we find in the budget. They all got together and said: ‘We now have to put a budget together. We have gone and won this election. We are going to actually have to govern now.’ And as they came together they said: ‘What can we do? We have all these promises we have to commit to.’ In fact, they have $30 billion worth of new expenditure they introduced in this budget, and one of the ways they sought to finance that was to slug the Australian taxpayer with an extra $19 billion worth of taxes. So this budget, with its rather inexperienced and desperate measures, is really a fizzer. I am reminded of another person who sat in this place, the former Prime Minister Paul Keating, when he used to talk about fizzers. He gave a great speech—which, I am sure, with the passing of time even people on both sides of the House can appreciate—on cracker night. Well, I think the cracker night speech has come back to haunt the Labor Party, because this budget is very much like what the former Prime Minister used to call the flower pot. It always promised this dazzling performance but often when you lit it up it went ‘fip’—and that was it. And that is what we have with this budget—fip; nothing. While we would not have agreed with the former Prime Minister on virtually anything he said, one of the things I think we admired, on occasions, was his wit. I said in this place earlier today, of the Prime Minister, that he has lived up to the former Prime Minister’s saying—that he was all tip and no iceberg.

These measures will make it harder for employers in a tight labour market to retain competitive provisions in their salary packaging. It will add to the cost of business in doing this. I would like to refer to an article in the Australian Financial Review, which came out after the budget, where KPMG partner Andy Hutt said that the FBT changes would make it harder for businesses to be ‘employers of choice’. He went on to say:

For an employee this means their remuneration package will lose its value because choices are taken away and employers will have to review their use of salary packaging as a tool to attract new employees and retain existing ones.

This will make it harder for those trying to retain staff and ensure good package arrangements to keep skilled employees and valued employees as well as attracting new ones.

One of the measures that are in this bill relates to meal cards. This is what I would equate with the Prime Minister and the Treasurer, Mr Happy, basically trying to steal taxpayers’ lunch money. They want to come in and steal your lunch money. But they only want to steal it from some, because this measure allows big businesses, who can afford the cafeterias, to continue to provide meals. Maybe they can afford butlers too? They may well be able to afford butlers, valets and all of these things, but one thing these big businesses can afford—and I am sure many of them are big donors to the Labor Party, part of Labor’s big-money club—is to put these cafeterias in place.

The lunches that are served in the big business cafeteria will not be penalised by this measure. But the small business that contracts out meals with a salary-sacrificing arrangement, that delivers these meals to workers on site—and they may be at a mining establishment; they could be anywhere—will be the ones who will be punished by this, not the big businesses. No, those who can afford cafeterias will be able to continue providing meals. But heaven forbid you decide to go out and support another business which is out there trying to make their way in providing catering to these businesses! No, that door has to be shut. This is the big evil that this budget has to address: it has to steal your lunch money.

Then there are the laptops. Again, this is a mean spirited, revenue driven initiative that gives with one hand and takes with the other. I refer again to the article from the Financial Review on 15 May. It says:

Under a Howard government initiative—which ended in Tuesday’s budget—

like many things ended in Tuesday’s budget, including 134,000 jobs—

wage earners had been able to save money on laptops by buying them with pre-tax income and not having to pay FBT. The changes are a blow to families who have used the exemption to help the children use computers.

“It’s been a great thing for both employees and employers to be able to salary package laptops through work,” said Mr Hutt, who added that the change was counterintuitive to Prime Minister Kevin Rudd’s “ education revolution”.

So we take computers with one hand and then we give them back with the other. But when we give them back with the other we do not think through the issue of security. We do not think through issues of supporting the schools as to how they are to be made available and the other systems that are needed to be put in place. We say: ‘No, the way you are making these decisions is not how we want you to make them. We are going to give the largesse in this way.’ And on every laptop there may even be a little note from the Prime Minister. Former New South Wales Premier Bob Carr used to send out cheques just before school started—and, of course, we know that the Prime Minister is the Bob Carr of national politics.

Then, of course, we have the other measure relating to software depreciation. I do not know how IT literate the Treasurer is. I do not know how often he is online. I do not know how literate he is with matters of communications technology. One thing I do know about software is that its economic life is not getting longer. It is getting shorter. But this measure actually says, ‘No, we think software should have the same economic life as hardware.’ I do not know where he got this advice from. The other thing that shows the inexperience here is that the measure is a dud, because at the end of the day it provides that if you ditch the software or have to replace it you can write the remaining component off anyway. I am not quite sure what the stunt is here, but basically what they are saying to people who have this software is: ‘We are going to extend the economic life because we frankly do not have a clue about how software works or what its economic life is. But if you happen to ditch it, well, you can write it off anyway.’ So it seems to me to be a completely fruitless and pointless exercise.

This bill is a grab for tax. In contrast, the coalition is all about lowering tax. In contrast, the coalition introduced more flexible arrangements in relation to taxation in the workplace. It increased the in-house fringe benefit from $500 to $1,000 and it extended employee share scheme concessions to stapled securities. Labor have never been on the field of providing tax relief. They would not even know where it was, let alone take to it. This is a Labor Party that walked away from the l-a-w law tax cuts after the 1993 election. They opposed tax reform in 1998, they gave us rollback in 2001, they gave us absolutely nothing in 2004, they followed it up by opposing tax cuts in 2005, and in 2007 the grand achievement of the Treasurer was to give the people of Australia the coalition’s personal income tax policy. That was it. I have said in this place before that the member for Higgins is the finest Treasurer this country has ever had. Based on the performance of the current Treasurer, that position remains in no threat.

I want to conclude by reading one more quote, and that is from Ross Gittins. All of this extra $19 billion was there for one purpose—that is, to fund $30 billion of new expenditure. After the budget Ross Gittins said:

The good news in the budget is that Mr Rudd has broken the mould of politicians feeling free to go back on their promises.

I am sure there was a big, happy smile on the face of the Treasurer when he read that. Ross Gittins further said:

The bad news is that most of the promises he has insisted on keeping were weak, vote-buying policies and now quite inappropriate to the present economic circumstances.

So we have $19 billion worth of extra taxes to deliver $30 billion worth of duds. The highest taxing and highest spending budget in our nation’s history—that is what we have in this budget and that is what we have in these measures. We believe they deserve more attention. This is a budget which, by the government’s own admission, will put 134,000 people out of work.

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