Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

They think that is the right thing to do. They think that a company with $2 million of revenue is a large company that's not worthy of tax relief. The member for Lindsay was interjecting saying 'not in western Sydney' they don't have those companies, but, actually, we have thousands of them. A company that turns over $2 million in revenue is a very small business, but those opposite literally think that that is a large company and they voted against relief for a company with $2 million in revenue. It is an extraordinary policy, and it really does speak to the anti-investment, anti-success agenda of those opposite.

The Leader of the Opposition recently said that in Australia there is a sense that your success in life is predetermined by your parents' income. That's just wrong. Every person in this place, and the vast majority of people around Australia, would say that their success in life has been overwhelmingly determined by their own efforts. That's what we believe on this side of the House. We believe very strongly in promoting innovation and investment and, basically, in backing people who get out there and make things happen. In the absence of that, the economy doesn't grow and we have a weaker economy and a weaker society. The strength of Australia—one of its many strengths—is the fact that people do take risks, people do invest and people do get out there and make things happen. That is why we are so supportive of corporate tax reform—to encourage people to invest more in this wonderful country.

The enterprise tax plan part 2 that we are discussing today will bring tax relief to those businesses with turnover of more than $50 million. Those opposite have already voted against the enterprise tax bill No. 1. Presumably, they will now vote against enterprise tax bill No. 2. It is important to know that there are 3.85 million Australian employees who are employed in companies that will benefit from these provisions. They will benefit because the company will have greater incentive to invest in Australia. Those opposite say that shouldn't occur. They say that it's a giveaway to companies—which is instructive in itself because it implies that all of the money is the government's for the government to decide what to do with, when, in fact, the money has been generated by these companies and not by the government. The government is the one taking the money, not the other way around. We say: let those companies keep more of the money they have generated so that they can reinvest more in our society and create more jobs. That is self-evidently a good thing to do.

But it is important to reflect on the policies of those opposite when it comes to tax. It is the most anti-investment, anti-innovation agenda we have seen from the Labor Party for many decades. I want to briefly run through the list of all the problems they would present for investment in Australia if they were to become the government. One of the things that those opposite propose is that any form of investment in Australia be subject to a 50 per cent increase in capital gains tax when it is sold. Labor say they want to do that because of issues to do with the housing market in Sydney and Melbourne. But they propose that capital gains tax be increased by 50 per cent for absolutely everything. So if you invest in a factory, a farm, a technology company, a warehouse, if you help a friend by investing in a small business—a cafe, a small restaurant or whatever—you will pay 50 per cent more tax under Labor's so-called housing affordability policy.

This is a very important point. If somebody wants to build a factory in Western Sydney, of which there are many thousands, to create jobs in Western Sydney, why should they pay 50 per cent more tax? That is an extraordinarily bad policy. It has nothing to do with housing affordability. I would absolutely welcome from anyone in the opposition an explanation of the link between housing affordability and increasing by 50 per cent a tax on investment in a factory, a warehouse or any other job-creating area. Nobody in the opposition has ever articulated such a link—because there isn't one. The policy is that, to address housing affordability, capital gains tax will be increased by 50 per cent. But no-one in the opposition has ever explained why they decided to extend that to factories in Western Sydney, warehouses in regional Queensland and farms in Western Australia. On all of those things, when sold, there is a requirement to pay 50 per cent more tax under Labor's housing affordability policy. If someone would like to articulate why they have done that and how it is related to housing affordability, that would be very welcome. But they won't do that, because there is no link. The reason for this policy from those opposite is that it raises more revenue—which would mean the government would have more money. That is why they want to do it. It has absolutely nothing to do with housing affordability.

Another issue is Labor's policy with respect to negative gearing. Labor's policy is that people investing in an investment property should not be able to claim the cost of interest even though that has been possible in Australia for more than 100 years. For more than 100 years, you have been able to claim the cost of interest when investing in investment properties; that actually applies to any investment, although much of it is investment properties. Labor say you should not be able to do that. And then they say this will have no impact on the market, that all the people who invest in properties will continue to do so. They say the fact that property investors will not be able to claim an interest deduction will not have any impact on rent, because they will have exactly the same rental income; they will not increase rents even though the total cost of owning the property will be higher because they no longer have the ability to make use of negative gearing. So Labor say there will be no increase in rents under negative gearing, even though they acknowledge that the person who owns the investment property will have to pay more. The person who owns the investment property will have to pay more, but Labor say the person who owns the investment property will not pass on a dollar of that cost to any renter in Australia. That is an extraordinary and absurd policy, and that is why it is so important to continue to articulate in a very precise way the cost of that policy.

They also want people who earn $180,000 to pay one in two dollars to the government. If that isn't a disincentive to work hard, what is? That is an extraordinary impost.

They also say that the hundreds of thousands of Australian businesses who make use of trust structures and who have done so for many decades should not be allowed to do so. They say that it's only going to be affecting a very modest number of people. They say they have modelling from the Parliamentary Budget Office on this issue of how many Australians will be affected by Labor's policy of effectively abolishing the use of trusts by small business. We say: release the modelling. The Parliamentary Budget Office would be perfectly fine with those opposite releasing the modelling on what their attack on trusts will do to the small business sector. The Parliamentary Budget Office isn't stopping the Leader of the Opposition from releasing that modelling. The only person who is stopping the Leader of the Opposition from releasing the modelling is the Leader of the Opposition. He should do so. He should be very, very frank and say, 'This is the exact number of the hundreds of thousands of small businesses in Australia who will be affected by this attack on trusts.' They have the number and they have the modelling. It has been provided by the PBO. They should put it out there in the public domain if they are so confident in it.

From those opposite we hear an extraordinary litany of attacks on aspiration and attacks on investment, whether it's on negative gearing, capital gains, trusts, not supporting company tax cuts or attacking investment on a range of levels. They have an antisuccess, anti-investment and antigrowth agenda. On this side of parliament, we are unashamedly pro growth and unashamedly supportive of business investment. We will back businesses to invest in this country and to employ millions of Australians. We have already got the runs on the board with the first tranche of these enterprise tax cuts. This is a very important second step, and it should be supported by all members in the House.

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