Chris Hayes (Fowler, Australian Labor Party) Share this | Hansard source

Yes—and what they did, at a corporation level, was start to pay people below the award rates of pay. Not that we want to digress into a political history of this, but when Labor came to power in 2007 it wasn't just the traditional Labor voters that rallied behind Labor. Let me tell you, when I did railway stations, as everyone does, and street meetings, it wasn't only the mums and dads but the grandparents coming along and saying, 'We never thought this would happen.' It was their fear at what was being delivered, or what was going to be imposed upon their children and their grandchildren, which certainly corralled people to think that the only people who were going to stand up for them and for their future was a future Labor government. I'm not trying to give a lesson on this, but maybe it's food for thought for those on the other side. Perhaps you should think about what a $65 billion tax cut for big business really does mean when you want to put it in terms of who is going to pay for it. What about the families? What's going to be the respective position? What services are you going to cut? This is all based on the assumption that there's trickle-down economics—if we give big business a tax cut, that will flow off to their workers. I don't know about you, Madam Deputy Speaker, but I don't really subscribe to the 'pigs might fly' concept.

I know many of my colleagues were at a seminar early this morning by Catholic Social Services Australia. There was a launch of a new publication entitled, An economy that works for all. The introduction was delivered by someone whom I think we all know very well—Father Frank Brennan, who is the CEO of Catholic Social Services. This publication is part of the Catholic Social Justice Series. Regrettably, I haven't read it all yet. But there were a few things I was able to pick out, only because it dealt with trickle-down economics, of all things. It cites from the 2007 social justice statement entitled, Everyone's business: Developing an inclusive and sustainable economy. That was a paper by the Australian Catholic bishops. It focuses on not only the distribution of wealth but its creation and how it is used. It's all about issues of social inclusion and ensuring that people's positions aren't being exacerbated by the way we distribute wealth in our economy. In that, the Australian bishops agreed with the remarks of Pope Francis when he said this: 'Trickle-down theories, which assume the economic growth encouraged by a free market will invariably succeed in bringing about greater justice and inclusion in the world, have not been proved.' I think that's the argument we've been trying to make for some time. This theory that big business, by a tax reduction, are going to turn that into higher wages for their people and are going to distribute the wealth throughout their workforce is, as I say, up there with the theory that pigs might fly.

Hopefully, most people will see that this is certainly a misplaced priority by this government. Simply hoping in the belief that, for instance, the big four banks are going to see the error of their ways and just pass this onto their account holders—it's not something that shows us as being of sound mind when we're considering the general application for economics in this country.

The whole basis of the government's position is: multinational companies—big business—pay too much tax, people earning under $87,000 don't pay enough tax and, besides that, people who work on Sundays and public holidays get paid too much. You can't have it all ways. You can't then decide that the remedy for our economy is: put it in the hands of big business and give them the tax cuts in the blind belief that they're going to actually distribute wealth to shareholders, workers and bank account customers. It's certainly taking a lot of it on trust. I would have thought that many on the other side of the House probably winced when they actually heard the real figures that have now been confirmed by the Treasurer—as being a $65 billion cut. That is what the cut is really going to cost the economy.

Let me put this in some perspective. We've had a big argument, as you'll no doubt recall, Madam Deputy Speaker, about the amount of cuts occurring to schools—$17 billion. There are cuts to universities of $3.8 billion. There are cuts to TAFE and vocational education of $657 million. These cuts have all been made to help sustain this tax cut for big business. But, when you add to that the cuts that have occurred in respect of family payments and age pensioners and the government making it more difficult for people to get the disability support pension, you can see that those at the lower end of the spectrum, the most vulnerable in our community, have been singled out to do the heavy lifting for this tax cut.

This is all in the guise of budget repair. That is how the government is backing it in. This is not the right course that we should be adopting. It's certainly not what you would think the priority should be for this government. We know we've got issues that we need to address, but taking money off schools—$17 billion—and taking money out of universities? The best thing we can possibly do is invest in our future. The future is our children. They are going to go on to run this place and look after us and everything else in the process. The future starts with a good education. We have moved aside from that and said, 'We need to make cuts there.' That's not terribly businesslike. These are direct cuts that are going to impact on our future—our economic future, our competitiveness in the world, as a producer, and what we need to do as part of the emerging smart economy. We have moved to cut in that direction. It just shows that this government's priorities are all wrong.

What do we really aim to get out of this staggering thing? I'm sure this got raised in the party room somewhere along the line. There is minimal growth opportunity for us through these tax cuts to big business. In fact, it is one per cent over 20 years. Would you believe that that equates to about a $2 a day increase in wages in 20 years time? Therefore this is not something that's going to net a huge change in corporate behaviour. It's not going to net a change in the way corporations do business. And yet this government has bet the farm on this notion of trickle-down economics. We expect more from those who occupy the government benches. They need to ensure that a sustainable approach is taken when we address the long-term aspects of budgets. I take you back to what Pope Francis said—that trickle-down theories in economics have not been proven. We have taken on something which just does not seem to make sense. It certainly doesn't apply in any other economic area. This government has bet the farm on this, and it is certainly not in a position where any credible economist will come out and say it has done the right thing. (Time expired)

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