Jason Falinski (Mackellar, Liberal Party) Share this | Hansard source

I'm very glad to speak in favour of this bill, not because I have some sort of ideological propensity for lower taxes or companies getting more money or, indeed, giving up a never-ending stream of good-news stories to key constituencies. I stand here to support this piece of legislation because history has shown us over and over again that lower taxes with less government leads to a better society because it is a freer society, a more equal society and a happier one. Western democratic societies have never had to set up their own institutes to measure global happiness in order to declare themselves the happiest people on the planet. It really is Disneyland politics.

If we are to bring the best of ourselves to this place, then surely we must learn from history. Surely we must enact legislation that we know will help our community be happier and will give people more opportunities and, therefore, more choices. Underlying this bill is the lesson that we have all learnt over many years: when the state taxes its people and companies less, people are better off. The reason for this is pretty obvious: individuals are better at spending their own money than the government. It is what PJ O'Rourke calls the 'other people syndrome'—that we're better at spending other people's money than we are at spending our own. If, let's say, I'm buying myself a car with my own money, you can bet I'm going to get a pretty good car at a pretty good price. But, when I'm buying a car for someone else, with someone else's money—let's just put it this way—different criteria apply and that person gets a very different car to the one I would have bought myself.

Wherever possible, we should leave money in the hands of other people who earned it, because they are going to use it more sensibly and more effectively than the state. And so it is with company tax. You see, companies do not really pay tax; they collect tax. Any tax you charge a company is passed on in lower growth, lower investment, higher prices, lower returns and lower wages. When you vote against this bill, what you are voting for—and let's be very clear—are fewer jobs for those out of work and lower wages for those in work. That's what the Labor Party stands for when it opposes this bill.

Many Australian companies have to compete against foreign companies that emanate from jurisdictions with much lower rates of tax and much friendlier tax environments. How are they meant to compete in the market when that is the situation? Why do some people in this place want Australian owned companies to do worse than foreign owned companies?

What this parliament needs to appreciate is that you can't move land and you are limited to how many people you can move—and it is always the most skilled that do—but there are few limits on how much capital you can move around the world. In an environment where most investors are happy with returns that are less than 10 per cent, what do you think the attitude of international investors is when they are faced with more viable businesses in Australia that have to pay 30 per cent tax versus one in Singapore at 15 per cent or one in Ireland at just 10 per cent? So if you are a small business or a start-up, or just trying to grow your business, forget about getting competitive and reasonable financing from overseas.

You see, the Labor Party and the Greens want to make sure that you only get a loan from the banks, that you have to put your house on the line—and anything else you might have. If you lower tax rates, you increase the supply of risk capital in our economy. If you are the Greens or Labor, you don't want to see the banks having to compete for business—oh no, none of that for their mates in the banking sector! You see, under Labor and the Greens, the only people entitled to preferential treatment are the unions. And if you are an Australian entrepreneur trying to build a business that employs people, that provides jobs and creates competition so consumers can get a better deal, don't expect to get any favours under Labor or the Greens—because those opposite believe they are better at spending other people's money.

Let's just review what the bill does. Further to the Treasury Laws Amendment Act 2017, the bill amends the Income Tax Rates Act 1986 to progressively extend the lower 27.5 per cent corporate tax rate to all corporate tax entities by the 2023 financial year and further reduce the corporate tax rate in stages so that by the 2026 financial year the corporate tax rate for all entities will be 25 per cent. At the moment, the company tax rate has only been reduced to 27.5 per cent and this reduction only applies to businesses with aggregated turnover of less than $10 million from 2016 and businesses with aggregated turnover of less than $25 million from 2017. Reduction of the corporate tax rate then applies to businesses with an aggregated turnover of less than $50 million from the 2018 income year onwards.

This bill contains residual components that did not pass in May 2017. These include provisions to incorporate tax reduction progressively within a specific time frame. This bill allows the tax reduction to apply gradually to higher turnover thresholds until a cut-off to businesses earning less than a billion dollars by 2023. The threshold changes are: $100 million in the income year 2019; $250 million in the income year 2020; $500 million in the income year 2021; and a billion dollars in the income year 2022. Aggregated turnover threshold is then removed in 2023. A uniform company tax rate of 27 per cent would then apply to all businesses in the 2024 income year, which would then be lowered to 26 per cent a year later and, finally, remain at 25 per cent from the 2026 income year onwards. These changes would further encourage growth and innovation and promote investment that would then grow the economy, making Australia more competitive with other countries.

The benefits are broader than tax cuts. Increasing the aggregated turnover threshold will increase access to small business entity concessions, such as the $20,000 write-off for depreciating assets, immediate deductions for certain expenditures and simplified depreciation rules. Economy-wide modelling by Treasury and KPMG suggests change will have net benefit on GDP, GNI, employment and investment. So companies in my electorate such as PharmaCare, which provide supplements to help people lead healthier lives, can invest in bringing more products to market to help people avoid health issues and live healthier lives. And, while they are doing that, they are growing their business here in Australia and employing more Australians. Or what about Dematic, a company that designs and builds the logistical systems for the warehouses that increasingly drive our economy. Dematic, like so many other businesses, has multiple choices as to where it invests its money. It can ramp-up its businesses on the Northern Beaches of Sydney, building up its high-end design and engineering units, or it can do that in one of the other five nations in which it operates. You cannot tell anyone here, except for those members who keep unicorns as pets, that the level of tax they are paying in one country over another does not play a role in their decision-making process about where they invest their money.

Look at Link Healthcare, founded by John Bacon and his wife Lyn. It is a truly innovative company; it has expanded around the world. It has saved many lives and, just as importantly, it has made the lives of so many others better. It supplies drugs to the Australian market, when, to put it bluntly, none of the large multinational pharmaceutical companies would. According to Labor and the Greens, this truly remarkable Australian company should be put at a disadvantage compared to the very companies that could not and would not help Australians.

While there are plenty of other businesses in my community that would also benefit from a fairer, better and more efficient tax system, let me focus on two more only, starting with Kobi Simmat and his team at Best Practice Certification. They are doing the back-end work that helps digitise and grow companies. It is a company that helps others get on with doing business and provides a better place for all Australians.

As my second example, we have Andrew and Pip Goldsmith from The Boathouse. They took a punt—no pun intended—and ploughed money into a run-down wharf that no-one else would touch. It is now virtually impossible to get into, as people from right across Sydney come to have breakfast and coffee over the water at Pittwater. With lower taxes, this parliament will be encouraging more Australians to have a go and invest in buildings that have not been used for years and create spaces that people want to be in or, in their case, on. There are many other examples, like Incat Crowther, which are tendering to have their own designed ships built by the US Navy, or like H.I. Fraser, which does engineering work on things like dams.

So there you have it: companies that make people healthier, that supply warehouses, that build ships and dams and that invest in public buildings. All of them employ Australians, all of them export overseas, all of them make our nation stronger and more content. And Labor and the Greens want to hurt them all.

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