Kevin Hogan (Page, National Party) Share this | Hansard source

I rise to talk in favour of Appropriation Bill (No. 3) 2016-2017 and Appropriation Bill (No. 4) 2016-2017. With these appropriation bills, there is a lot of good money being spent in a lot of areas that are needing it. In Appropriation Bill (No. 3) the Department of Defence will be receiving extra resources for some of their roles. The Department of Health is also getting extra resources, and there is some infrastructure spending in that as well.

I want to pick up on an issue that was raised earlier by a number of speakers. I am talking here about the proposed company tax rate cuts, and I think it brings up a really interesting philosophical point. As members of parliament and as members of government, one of our primary roles is to provide services to our community, whether they be in health, education or infrastructure projects. What we always have to do, and try to do, is grow the pie of available government resources for those types of projects but at the same time help grow that section of the economy, or that section of the country, that is producing the wealth of the country.

The company tax rates are a really interesting philosophical debate. For the first time in probably 30 or 35 years, we are now having a debate about this. I go back to the Hawke-Keating governments and acknowledge them for some of the things that they did. They in some ways started this whole process. The prevailing economic thought, accepted in most countries around the world, is to maintain a competitive business tax rate. We have moved into a space with globalisation and technology advancements, where countries that operate with isolationist policies, or in isolationist-type environments—and I suppose an exaggerated example here is North Korea—tend not to do well. Most successful countries trade, and they have to compete in a way that keeps them efficient. One of those ways, whether we like it or not, is to have a competitive company tax rate, because many companies now have a choice about where they operate. They can choose what part of the world they want to domicile their business in, and there is lots of competition in that.

Dare I say it, Paul Keating as Treasurer recognised that. One of the first governments in Australia to really take this on board and to lower company tax rates—not just for small business but for big business—in a massive way was Paul Keating and Bob Hawke's government. They lowered company tax rates enormously over the years that they were in government, because they understood that we had to maintain competitiveness in this field. With the election of the Howard government, that continued: the Howard-Costello government, over the 10 or so years that they were in power—again, in a modest, continual way over time—lowered the company tax rate. We went from something like nearly 60 per cent down to the current 30 per cent. We have one of the highest company tax rates in the OECD, and we have if not the highest then very close to the highest company tax rate in our region. We need to keep looking at it and we need to stay competitive on it. Even with the Rudd-Gillard-Rudd government there were proposals to lower company tax rates, and we are doing the same thing now—so for the first time in 30-odd years, there is a debate about this.

I want to remind the House what has happened in the past when we have cut company tax rates, because what you would think—potentially—is that when you cut company tax rates, the amount of revenue that you receive goes down. But that is not the historical or empirical evidence of what happens. In fact, it is exactly the opposite. What happens is it encourages more businesses to get established. It encourages, potentially, more businesses to move to your country. I want to quote some figures—from the ABS, of all places!—and I think we can have reasonable faith in these. To go back to what I was talking about before, company tax revenue rose—this is back in 1987-88. There was a 10 percentage point cut in the company tax rate in this period. Company tax revenue actually rose from 8.6 billion in 1987-1988 to 12.7 billion in 1989-90. So there you go, Madam Deputy Speaker Claydon—we had a company tax rate that was cut, but company tax revenue actually rose in totality. And that was because more businesses were established, more businesses were making much more money, and more businesses moved here. Also—and this is an important statistic—company tax as a share of government revenue rose. Was that a one-off? No it was not, because revenue rose when the Howard-Costello government did the same thing. Revenue rose from 26 billion in 1999-2000 to 35 billion in 2002-03. It also lifted as a percentage of the share of revenue after we had cut the company tax rate from 36 to 30. So again, we need to understand—and it has been well accepted throughout the world, and in Australia by both sides of politics—that cutting the company tax rate is important for maintaining a competitive tax rate. And, as you free up and liberate that private sector, they actually do better and will generate more money. So this is a really significant change from the Labor Party: they are talking in a way which they have not done and about something that they have not spoken about in over 30 years.

We need to look at recent history, over the last 20 to 30 years, and at exactly what has happened with company tax rates. In fact, revenue to government has increased as a result of those changes. Let us think: why would that happen? It is almost counterintuitive—until you look at the figures. We would think that if company taxes are lowered—but we are not collecting less money, we are collecting more. It goes with that whole philosophy—it encourages investment, it encourages existing businesses to expand, it encourages them to invest in new things, and it encourages new businesses to establish and other businesses to move here. It creates the bigger pie, and the bigger resource for government then to provide the essential services that it needs to. I remember there was a famous case, a well-studied case in academic circles, about Ireland. You may remember, Madam Deputy Speaker, that Ireland in the eighties was in a very poor way financially. They had a company tax rate that was very high. They slashed it to 10 per cent—I think it was from something like 60 or 70 per cent to 10 per cent. They were collecting more money in three years at 10 per cent than they were at 60 per cent. Again, why? Why did that happen?

What happened back then was that they became the centre of investment in Europe. In the eighties, obviously, one of the biggest emerging industries at the time was the IT, and everyone sent to the IT bases in Ireland. Lowering it was great for their economy and great for their company tax collections. It has been well accepted throughout the world and, indeed, on both sides of politics in Australia for 30 years, but apparently the Labor Party, unfortunately, now knows better and is ignoring empirical evidence about what has been proven over the last 20 to 30 years.

Also with the appropriations, I would like to acknowledge some of the investments this government is making. We very much understand that government play an important role not just in essential services but also in infrastructure spends—and I want to quickly run through a few infrastructure projects in my electorate. We have, through different things like the Stronger Regions Fund, made really important investments in infrastructure that are targeting job creation and jobs growth in local regions, and I want to quickly run through a few in my electorate. One is the Ballina marine rescue tower. It is very important to our fishing industry and very important to our tourism industry. The old tower was literally falling over, but it was known that, if that tower closed, vessels would not be able to enter the bar safely and both the tourism and fishing industries would be adversely affected. We made a commitment to them to fix that, and we will be opening that in the next few weeks. That is going to be good day for Ballina and, indeed, the tourism and fishing industries.

At Lismore, there is the Quadrangle project. We are going to be opening a regional standard art gallery and a cosmopolitan-type square within the library and the new art gallery. This will bring new tourists and new visitors to our region spending money, which is going to be very valuable. Deputy Speaker, I do not know if you have ever been to Kyogle. It is a great part of the world. There is a very well-visited dam called Toonumbar Dam. Unfortunately, it does not have a completely sealed road, and we have invested in making sure that road is completely sealed to encourage more tourism activity in that region. The Harwood Sugar Mill, down the Clarence, is a very important employer in the lower Clarence. We have given them some financial assistance to completely reform their logistics, which is going to make sure they remain competitive. That is also a job-creating investment.

Casino has the biggest private employer in the region for hundreds of kilometres, and that is the local abattoir—a local meatworks. They employ over 1,000 people. The saleyards, located just a little way away, needs to be upgraded to make sure that Casino remains a regional hub for the cattle industry. We are making an investment in that, with the local council. This will be a nearly $7 million investment with both parties investing, to make sure that the saleyards are upgraded and to make sure they remain a regional processing centre.

There are many more. Oakes Oval, in Lismore, is the premier sporting facility in the region. That is getting an upgrade. It is being extended to incorporate AFL. The change rooms and some of the grandstand infrastructure will be upgraded as well to make sure that we keep winning these regional sporting events so that people keep visiting our region and spending money. There is the Maclean Riverside Precinct. Maclean is a beautiful Scottish town on the Clarence River. They are upgrading the riverside precinct, and we are helping them by making an investment and really turning the town around to face the Clarence River again, with boardwalks and promenades. That will increase tourism visitors to Maclean and the economic performance of Maclean.

Kyogle has an inordinate amount of wooden bridges. It has quite a small LGA in population, but it is very productive. They have a blueberry industry, they have beef a cattle industry and they have a timber industry. And they have a lot—and I am talking hundreds—of wooden bridges that are in a state of disrepair. The financial burden on them is too great, so we, as a federal government, have been assisting them for a number of years to slowly upgrade the wooden bridges in a uniform way. We are aware that they are a very productive area of our country. They produce things, they make things and they grown things, and that is providing income not only to their region but also to the country. We are also upgrading some of the amenities in town for them, like the pool.

Woolgoolga is a great blueberry-growing area and a great tourism area just north of Coffs Harbour. There is a great Sikh community there as well. The surf lifesaving club is not in a good way and we are going to help to move it and invest again in crucial infrastructure for social reasons. There is more going on in Casino, with an amphitheatre that we are going to help to develop at the local drill hall complex. They approached me a number of years ago. The complex was surplus to Department of Defence requirements and they asked me if we would not sell it into private hands but keep it in community hands as a community space. With the Minister for Defence we did a deal that was quite advantageous to the local council and sold the drill hall to the Richmond Valley Council. It is now going to become a community space and we are going to help them make some investments into that as well.

Further on the subject of social infrastructure, it was wonderful recently to involve the Minister for Health. Like many communities around our country, Clarence Valley has been touched by mental health issues. I do not think there is a family that has not been touched by mental health issues, but Clarence Valley and Grafton have been especially hard-hit. There have been many tragedies. Every loss of life is a tragedy, but they have certainly had more than their fair share in this very sad way. It was almost having a flow-on effect—when someone did it someone else would follow. We are making some huge investments into this space. The Minister for Health was there with me recently and we announced a new headspace facility for Grafton, but also a whole array of other extra mental health services to help the community.

Lastly, the biggest investment that we are making is important not just to prevent fatalities but also for revenue and commerce revenue—and not only when it is being built by the 3½ thousand people who work directly on it. I am talking about the upgrade of the Pacific Highway. The Woolgoolga to Ballina section is very important. This government is making a multibillion dollar investment to create more jobs.

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