Stuart Robert (Fadden, Liberal Party, Minister for Human Services) Share this | Hansard source

It is a pleasure to rise on the government's Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016. The premise behind where the government is taking this is quite simple: we want to spur investment and enterprise within Australia. We want to unlock the native elements, the native attributes, the hardworking entrepreneurialism and the skills of Australians. We want to provide an incentive for jobs and growth. It is fairly simple, as so much of economics tends to be. That is why this bill moves forward on a company tax cut; it moves forward on a Ten Year Enterprise Tax Plan; and it moves forward on small business tax relief.

There was a time when the opposition believed in these things as well. The Leader of the Opposition said in 2011:

Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

I agree with the Leader of the Opposition. I think that what he said in 2011 was wise and sensible. He was a minister. It was right. And because I think the Leader of the Opposition is right in what he said in 2011, I think we should read it again. The Leader of the Opposition, as a minister in a Labor government, believed that cutting the company tax rate increases domestic productivity and domestic investment. Of course it does. It provides more money for corporations to invest into new technology, new systems and new approaches—which of course equals productivity—and new investment in capital, people or in a multifactor sense.

The Leader of the Opposition went on to say:

More capital means higher productivity and economic growth and leads to more jobs and higher wages.

A company tax cut, in the words of the Leader of the Opposition, leads to more jobs and higher wages. Hallelujah—I'm in! Let's go! We now have a bill before the House to do exactly what the Leader of the Opposition wanted.

Let's look at what the Shadow Treasurer had to say in his book Hearts and minds. It is a wonderful book, I am sure. Let's quote from the Shadow Treasurer:

It's a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.

Jobs and growth—I thought that was our mantra. I thought jobs and growth is what we are about. I thought jobs and growth is what the Liberal and National parties took to the last election, where we won a mandate for this tax plan. It turns out that jobs and growth has been used before by the member for McMahon in his book:

It's a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.

That is what they used to believe. The problem is that things quickly change. When the Leader of the Opposition was the Minister for Financial Services and Superannuation he also said.

Any student of Australian business and economic history since the mid-80s knows that part of Australia's success was derived through the reduction in the company tax rate.

So the Leader of the Opposition is speaking again, casting the net wider now. 'Any student of Australian business and economic history'—any student. If the Leader of the Opposition is so sure of himself, that must mean everyone here—He has spoken for you, Mr Deputy Speaker, he has spoken for me, he has spoken for those opposite, on the other side: any student of Australian business and history since the eighties knows our success was derived from a reduction in the company tax rate. Well, here we are with a bill before the House to build on that success. On 13 March 2012 the Leader of the Opposition said on Sky News:

We need to be able to make life easier for Australian business, which employs two in every three Australians.

We do need to make life easier. How about we do something that leads to economic growth, more jobs and higher wages? How about we do that? In the words of the Leader of the Opposition, that looks like a company tax cut.

The Leader of the Opposition further addressed the Institute of Chartered Accountants on 6 April 2011:

The Government's tax reform agenda has a strong focus—

I can see him; it is almost Churchillian—

on ensuring that Australia remains an attractive place to invest ... Cutting the company tax rate is an important step along this road.

I agree. Let's take the step. Let's go! He continues:

This recognises the benefits to investment and growth from lower company tax rates and a trend to lower rates across the OECD over the past 30 years.

It seems that everyone on the opposition benches is talking about investment, jobs and growth linked to a company tax cut. We agree. Let's go!

Let's go on back to the Shadow Treasurer's book Hearts and minds. He wrote a chapter there promoting growth through cutting company tax. What—there is a whole chapter called that? 'Promoting growth through cutting company tax'? Let's read those wise words:

Keating knew that the corporate tax rate needed to be cut to make Australia competitive, that capital and investment would flow to tax-competitive nations and that this was an important job-creation move.

What? Cutting taxes leads to jobs?

Today capital is even more mobile than it was then and it is important that our corporate tax rate is more competitive. It's a Labor thing to have the ambition of reducing company tax …

It is a Labor thing. Referring to the company tax cut, the Shadow Treasurer goes on to say:

I'd like to see it lower over time. I think we've had 14 years of having the corporate tax rate stable. That's too long. Over time, I'd like to see it lowered.

On 4 December 2014, the Shadow Treasurer on ABC Lateline, said:

As the alternative Treasurer, I'm telling you that I think it would be a better thing if Australia's corporate tax rate was more competitive.

It goes on and on. Here we have the two most senior parts of the opposition saying the same thing at least 10 times: if you cut the company tax rate, it will lead to higher productivity, more investment, more jobs and greater growth.

We agree. In fact everyone agrees, and the Leader of the Opposition was correct when he said that any student of history and politics and student of this place also knows that this has to be done. Even the member for Bruce, who was speaking before, a member who has spent his entire life working in the public sector, on the public teat if you will, even he made the point that 'We would love to do a cut to the company tax rate, but now is not the time.' Really? So when is the time to do it? Does only Labor know when the time is? The time is now. A company tax cut leads to more jobs, higher growth, higher wages, stronger investment and greater productivity. We know it; those opposite know it; economists know it. In the words of the Leader of the Opposition, any student of this place knows it. We need to do it.

The member for Bruce would like to suggest that it is a race to the bottom, that other nations or jurisdictions are lowering their company tax rate and so are we, and we should all link hands and sing 'Kumbaya' and together make some decisions on keeping the company tax rate at a certain level. What sort of fairyland is the member for Bruce in? What sort of land of nonsense, where we can all hold hands and sing 'Kumbaya'? I remember in 1986, the International Year of Peace, 46 wars raged across the globe. The violence across our world today is greater than that, but the member for Bruce believe we can all hold hands and keep the company tax rate high together. Competition—the free enterprise—is what has fuelled our development and our growth, not some sort of public sector la la land nonsense.

So, what are we facing out there in a globalised world where companies have choices on where they can land jurisdiction-wise? The United Kingdom, for example, reduced its main corporate tax rate in stages from 30 per cent in 2008 to 20 per cent from 1 April 2015. They are 30 per cent more efficient in terms of taxation than we are. From 2008 to 2014, Canada reduced its main corporate tax rate from an average of 36.1 per cent to 26.5 per cent—there are some provincial differences—and Singapore went from 20 per cent to 17 per cent. Companies have choices. We need a more competitive tax rate if we are going to attract foreign capital. Ever since ships landed on these shores in 1788 we have needed foreign capital to grow. Australia is a great place to do business—a marvellous place. It will be a better place with a lower tax rate. Our Enterprise Tax Plan will boost the Australian economy. It will encourage employers to employ. As the shadow Treasurer and the Leader of the Opposition have said, it will lead to higher growth, more jobs and higher wages. It will give businesses the certainty that this is a fabulous place to invest in. It will give long-term investments the opportunity, through that stability, to see some real growth come along.

There is broad consensus—there always has been—amongst economists and those in business that higher rates of corporation tax undermine investment and economic growth. Even the OECD have said:

… corporate income taxes are the most harmful for growth as they discourage the activities of firms that are most important for growth: investment in capital and productivity improvements.

Now everyone from the OECD to the Leader of the Opposition to the shadow Treasurer to anyone who is a student of this place is talking about linking the company tax rate with growth and jobs. It seems that the only people right now who are not talking about that linkage are those poor, miserable souls opposite, who, for the sake of sheer politics, are saying, 'No, we don't want to help you companies become more competitive.'

According to the UK government, cutting the main rate of corporation tax from 28 per cent to 20 per cent has been a central part of their economic strategy, contributing to the economic recovery by supporting business investment and job creation. Business investment increased by 11 billion pounds, according to Oxford University, on the back of those corporate tax cuts. In 2013 the UK government published analysis modelling the long-term economic impact of the corporation tax cuts. It found that the cuts could increase GDP by between 0.6 and 1.3 per cent—extraordinary.

The numbers speak for themselves. The evidence is overwhelming, from lower-tax jurisdictions to the OECD. In fact, in years gone by, those opposite have known it, have passionately advocated for it, have tried a little bit to achieve it and, when it got hard, have walked from it.

The member for Swan, as he left, threw me a speech, with some highlighted bits. It is a cracker! The first lines are:

The four years of surpluses I announce tonight are a powerful endorsement of the strength of our economy, resilience of our people, and success of our policies.

In an uncertain and fast-changing world, we walk tall—

No, you do not walk tall! What those opposite left was a disaster. This was the appropriation speech from 2012-13, the member for Lilley speaking on 8 May 2012. All that was left were deficits in the tens and tens and tens of billions of dollars. In that speech they announced a $3.7 billion small business tax break. Where is it? Where did that tax break go? Why isn't it there? At the end of the speech the member for Lilley said:

… our multi-speed economy is putting pressure on businesses that aren't in the fast lanes.

… … …

We'll encourage companies to invest and innovate …

… … …

This will support businesses …

No, they did not! The did not do anything. They talked about it. Oh, they talked about it, and there were photo shoots and videos and standing in front of pie shops. They talked about it but never, ever delivered it.

The shadow Treasurer had an aim, an ambition—25 per cent, he wanted; that was his aim, his target. Well, now is the opportunity to actually put all the words, all the rhetoric, all the statements over so many years to the test and vote for a sensible enterprise tax plan. It makes sense. It will lead, as the numerous words of the Leader of the Opposition and the shadow Treasurer have said, to higher growth, more jobs, higher wages, greater productivity, greater investment. I encourage the House, I encourage those opposite. The government is not asking you to do anything other than what you said you would do. The government is not asking you to keep any promise or any word other than that which you promised and that which those opposite said they would keep. The government is simply asking Labor to stand up— (Time expired)

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