Wayne Swan (Lilley, Australian Labor Party) Share this | Hansard source

I firstly want to thank the electors of Lilley for re-electing me for another term in parliament. It is a job I enjoy. I am humbled by their support and the honour of representing the community for a further term in parliament. I want to say to them that I will not let them down.

These appropriation bills implement Malcolm Turnbull's trickle-down economic strategy—and we heard some more of it then from the member for Hughes. I will not respond to all of his inaccuracies, but I would make this point: during my time as Treasurer, nearly six years, the Australian economy grew by 15 per cent, at the height of the most difficult time in the global economy since the Great Depression. The 'Great Recession' did not impact on this country like it impacted on so many others. So, at the most difficult time in the global economy, our economy grew by 15 per cent, as others shrank and went into recession. During that time, we created over one million jobs, and, at the end of that period, we had a AAA credit rating from the three major rating agencies.

The member for Hughes has had a lot to say about tax, and that is good, because I want to say a lot about tax tonight as well. One of the reasons that, under his government, deficits are now three times what they were when Labor was in government and that debt is substantially higher—by about a third—is precisely that tax revenues are down dramatically. He might believe in a Laffer curve and that there is some magic growth which spurts forward from a cut in taxes across the board, but that is not how economies work anywhere else in the world, and they do not work like that here.

At the heart of these appropriation bills is, as I said before, the Prime Minister's determination to implement what is a pretty extreme program of trickle-down economics. What do I mean by that? The notion that if you give more to the rich—either individuals or wealthy corporates—they will somehow take that money, wisely invest it and create greater growth which will sprinkle down on everybody else. Of course, it has been trickle-down economics of the variety espoused by the member for Hughes that has produced such a tragic outcome in the greatest democracy of them all, which in the last 30 years has seen a hollowing-out of the middle class and the creation of a great army of working poor. Thankfully that did not happen in this country during that 30-year period, half of which was presided over by Labor governments. And it most certainly did not happen in this country during the 'Great Recession', which sent other countries into recession, smashed their labour markets and destroyed the capital basis of those economies, to the point that many of them are still recovering. Our structural intervention meant that we secured our economy, we secured our people and, as a consequence of that, we can have a conversation about a healthy economy and how we might like to reform it. No other developed economy in the world can begin to have that conversation.

All of these matters were not addressed by the Prime Minister on the night of the election. I would have thought that, by the time he got to the Sofitel on election night, he might have been able to think of some uplifting words he could have said to the nation. After all, Australia's longest election campaign had been all his idea and his alone, and at the core of that campaign was a commitment to a $50 billion unfunded corporate tax rate cut. He had a long time that night to think of a few fine and inspiring words he might have said to the Australian people. He is claimed to be one of the most polished and accomplished speakers in the country. By the time he got to the stage, in the wee hours of 3 July, his speech was about as appetising as the cold spring rolls and the stale champagne that had been circulating in the Sofitel ballroom for about five hours.

That speech by the Prime Minister that night will go down as one of the worst speeches in history by a leader of any major political party in this country. He commenced by comparing the election outcome to the 1998 election. I thought that was a good idea. In the 1998 election John Howard lost 18 seats and received the minority of the vote but won the majority of the seats and became the Prime Minister. In 1998, then Leader of the Opposition Kim Beazley delivered what I would regard as one of the great speeches in history, a very generous speech, despite the fact he had received the majority of the vote and lost. This is what Mr Beazley said, in uplifting words, to the people of Australia back in 1998:

We must, as a people, … turn to each other and not on each other and against each other.

By contrast, about two-thirds of Prime Minister Turnbull's speech that night only 2½ months ago was spent attacking the Labor Party and all of the people who supported it. He effectively accused 49.64 per cent of the electorate who voted Labor of being involved in 'a pretty shameful episode in Australia's history', and said that 'more than a few people were misled' by 'systematic, well-funded lies'. Whack, whack, to 49 per cent of the Australian electorate.

As I watched this tantrum unfold—and I had just got home from my own election function—I could not believe what I was seeing. I was reminded of an old comic strip where the lord of the manor is speaking to one of his servants, and the servant says, 'Sire, the peasants are revolting,' and the lord of the manor replies, 'Yes, they are, aren't they.' That is the attitude of our Prime Minister. He thinks that he is here to rule over the peasantry. That is what he thinks. He wanted to blame the people of Australia for not having the brilliance to understand what an important politician he was. Of course, that is why we do call him the 'prince from Point Piper'. He is little different from Mitt Romney in the United States, the last Republican candidate for the presidency of that country, who spoke about the 47 per cent of voters who would never support him, 'because they thought government has a responsibility to take care of them.' Where does that take us? That really takes us back to the attitude of the modern Liberal Party, which has been radicalised and taken over by these United States Tea Party type people. I know the Nationals understand that—they spent a lot of time fighting it.

Only a Tea Partier could have gone to the election expecting the Australian people to support a $50 billion unfunded corporate tax cut—truly spectacular. Of course, that is because—and we heard it from the member for Hughes—their storyline is all Ayn Rand. The whole world just consists of the 'lifters and the leaners', and now it is the 'taxed and the taxed nots'. It is so stupid you could not make it up, but that is the world that these people live in these days—these radicalised, extreme Tea Partiers who are now running the government's economic policy.

I know the Prime Minister probably does not understand it, because in his world—as he spoke to the people during the campaign, as he stood on his balcony there at Point Piper and looked across at the four wealthiest electorates in the country—he does not really walk in the same shopping aisles as the average Australian. Therefore he does not get the very basis of why his message is so unappealing at the grassroots level. In his world people just go to the doctor because it is free, not because they need to go there. In his world workers' wages are always too high. In his world business regulation is simply out of control—we should not have any more—and the taxed nots out there are dragging down everybody else, unless they are big multinational companies who are evading tax and do not pay anything at all.

For this Prime Minister to come into this House and lecture people in here and in the community about the moral challenges that we face, the moral challenges of debt, when he is giving a $50 billion unfunded tax cut to some of the wealthiest companies in the world—who are not going to change their behaviour and take the gift and come back and reinvest here and drive jobs and growth—and for him to lecture Australians and the Labor Party on moral cowardice like that is simply breathtaking.

A corporate tax cut of this magnitude is not even in the 10 most important actions you would take if you were really trying to power jobs and growth in the circumstances we are in here, in Australia, given the context of the international economy. I wish the member for Hughes would stay because I want to demonstrate why it is such an act of stupidity—an act of wealth concentration, not an act of wealth creation—to offer a $50 billion unfunded tax cut of that nature.

Thankfully, one of Labor's last acts in office was to put in place tax transparency legislation, which forced the corporates to publish total income, taxable income and total tax paid. So now we know what is going on in that area, and, of course, the average effective rate of tax paid in Australia is not 30 per cent. It is 24 per cent. If you are a private company, not a public company, it is actually 19 per cent. So forget all this rubbish about 30 per cent and somehow they are 12 here and 15 there—we do not pay 30 per cent in this country. There are some valid reasons for it and there are some very, very squalid explanations for it for many of our large corporates. So why would cutting the corporate rate from 30 per cent to 25 per cent work in an environment where they are paying an effective rate on average of 24 per cent? It is just stupid. Dumb. Which is why it does not have support. It is not seen by bodies such as the IMF and many other international organisations as a rational choice at all. Will all of those companies be suddenly inspired to create more jobs?

One-in-three private companies in Australia now pay no tax—did you get that; one-in-three—and one-in-four public companies pay no tax. How are they going to be inspired to invest more when they are not paying anything now at all? Which is yet another demonstration of how absurd this policy is, and why, really, the government is being controlled by a pack of zealots who are simply interested in providing a huge gift to a few of their mates at the top end of town. Meanwhile, the average member of the public can see through this. They can see through it thanks to our tax transparency legislation. Everyday workers do not have access to Panamanian tax shelters or tax havens or corporate minimisation opportunities, so how dare these workers challenge the Prime Minister on election night, and say: 'No thanks. We don't think it's a great idea.' How can anyone have faith in a leader who professes to believe in equality of opportunity but leads a government that has opposed strong measures to stamp out tax evasion?

He can lecture all he likes about the moral challenges. He is a fully paid-up member of the Cayman Islands club. He has got a capital fund growing there under the palm trees. How is he in a position to lecture Australians about their moral priorities? If he was a leader who had faith in his leadership, if he was a leader who had faith in his Treasurer, then he would be investing his money first and foremost here. The truth is this: the use of tax havens by wealthy corporates and wealthy individuals is destroying progressive taxation as we know it. It is a very significant factor, not just in growing inequality of wealth and income globally but also as a significant factor in the loss of trust across the world by individuals in their democracies. It is also a substantial factor leading to weaker and anaemic growth and lower living standards across both the developed and the developing world. You do not go to a tax haven unless you are intending either to avoid tax, either in countries where you live or you are based, or to use it as an end-point for tax minimisation. The fact is, and the public know it, that strong action against tax havens will never be taken by public officials who use them.

In question time today we once again had lecture from the Prime Minister about culture. He decided he was going to lecture the Labor Party about culture. So I have a question for him: what kind of Prime Minister puts his fortune in a tax haven? What sort of cultural implications does that have for our country and for moral leadership? So in this environment you can be absolutely certain that the public are indeed very sceptical when the government says it is committed to Medicare, that they do not have an agenda to privatise it, which we know they do—and, by the way, which is still being implemented behind the scenes, I am sure their backbenchers will be shocked to know.

We in Australia have an opportunity to have a debate about what the drivers are of growth with equity. This is why we in the Labor Party have produced the report I am holding here. This shows the way. We have reached a fork in the road in the economic debate. We can grow inclusively, and if we are growing fairly we will grow more strongly. If we are growing unfairly we will have weaker growth. This is the way ahead, not the government's trickle-down economics. (Time expired)

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