Ed Husic (Chifley, Australian Labor Party, Shadow Minister for the Digital Economy) Share this | Hansard source

When we get to the point of talking about tax cuts—and I was thinking about this in the lead-up to my contribution today—it's probably worth thinking about where we've come from, because it's nearly 10 years since we were affected by the global financial crisis. Time does fly and people do tend to forget that stretch of time and how far we've come. When Labor were in government during that period, we had to undertake some fairly big moves to protect and shield our economy from what was affecting countries all over the world, and the economy wasn't quite the same after that time. Growth wasn't the same; it wasn't responding in the same way once things stabilised and it did take a while to get out of it. But, besides what Labor had done, it's also worth remembering what ordinary wage earners did through that period of time as well. Bear in mind that, to help ensure that unemployment didn't go through the roof, you had Labor in government making sure that stimulus was provided to keep the economy going, but, in workplaces around this nation, ordinary Australians were also playing their part. Remember, they cut back on overtime; they cut back on the number of hours that they would work—they made big sacrifices to ensure that their workmates were able to stay in a job. They did that with the view that this was the right thing for the firms that they worked for and the friends that they worked with. They made these sacrifices. The return for that was they would hold onto their jobs and they'd be able to make sure that their families didn't have to live through much worse times. Certainly my family and, I think, many others in the chamber would recall those up-and-down periods when Australians did suffer recessions and when parents lost work for stretches of time, where they had to bite into their own savings to hold themselves up, hope that they went through a boom and see what happened with the recession.

Fortunately, in this country, over a period of time, we've gone through a quarter of a century of uninterrupted economic growth, even in spite of a global financial crisis which in some parts of the world, like the US, was referred to as 'the Great Recession'. People made sacrifices. Things started to stabilise. We weathered some of the worst things. It's worth remembering that in some parts of the world, in Spain for example, youth unemployment in 2007 stood at just over 17 per cent and then grew to a phenomenal 56 per cent by 2013. Fifty-six per cent of Spain's young people were out of work. Now, we did have to deal with youth unemployment here, but nowhere like that. So we sidestepped that type of economic impact. We saw the economy stabilise.

But what happened afterwards? What happened afterwards was a very uneven return to normality, because capital seemed to go well; labour didn't. Capital, in terms of profits, was up. Corporate profits were up. Dividend flows to investors were up massively, by billions. Dividend flows between, for example, 2014 and 2017—off the top of my head—jumped from $40 billion to $70 billion. Again, investors were doing well. In terms of top professional income brackets and what was being scored by CEOs and professionals in companies, those were going up as well. And don't get me wrong. I know that there are people who will point to the bonuses or the salaries and the remuneration of CEOs and the like, and they will always be contestable, but you do understand that some CEOs will attract a pay packet commensurate with the skills and the experience that they bring. But people couldn't understand how things went out of whack so much, because—remember—while capital was doing well, ordinary wage earners were experiencing flat wages for years.

Wages growth was pretty much mirroring inflation. And people were being told, as I recall the Reserve Bank saying that they believed at that point in time, that unemployment, because it was high, was a sort of pressure keeping wages down. That was what was occurring. Then it became obvious, as wages kept getting stuck, that nothing else was moving, and people were getting frustrated by that. Unemployment was still at the same level. Mind you, when those opposite talk about unemployment, they never talk about the percentages; they only talk about numbers. But unemployment has still remained the same over many years. Underemployment is a big issue.

And then the coalition extend more sacrifice. They expect that the people who've sacrificed before have to sacrifice more through some of the budget cuts that they've undertaken in terms of income support, social investment in schools, hospitals et cetera, child care and the like. People are being asked to do more. While people were feeling the pinch, what was the government's big answer? The government's big answer was corporate tax cuts—corporate tax cuts that would puncture an $80 billion hole in the budget, with very little proof that, by making that huge shift in money from federal finances to corporate coffers, there'd be any longer term benefit to the economy in terms of growth, in terms of jobs or in terms of wages. In fact, Treasury revised down the economic impact of their own package. So we had that.

When they knew that it was a hard sell, what happened? This plan happened. This plan by the government to provide income tax cuts has come because they realise that, where people have been feeling the pinch for so long, where they don't feel like they're getting ahead, where their wages aren't moving, where capital is doing well and the government announces that it will give a big corporate tax cut, no-one wants to support that other than the business community. So they think, 'The only way we're going to get this through is to deliver a tax cut.' And they can't even do that right.

At the heart of their tax plan, for example, is the thing for which conservatives lather themselves up for years, which is to create essentially a flat tax, right in the heart of it, by changing the tax scales. They go for a flat tax arrangement. A play straight out of the Newt Gingrich playbook of the mid-nineties comes back and resurrects itself right here. So you can tell why people aren't necessarily cheering in the streets about what's being offered, because they see an $80 billion tax plan where corporates do well, and they see a plan being offered by the coalition that doesn't address all of those things that I mentioned earlier where people are feeling the pinch.

I pick up on the point from the member for Boothby, who was saying that she was happy that there was a divide and a difference between us and them. She's right, but the difference isn't favourable to them, because, when you look at the tax plan that has been put forward by this side of politics, the Labor opposition, people with up to $125,000 in earnings get up to $928 as a tax cut, compared to roughly $500 from the coalition. It's not just about a tax cut; it's also what Labor in government would be prepared to do in terms of social investment to help people with the things that they really want to see in their community—for example, restoring school funding, on which there is a $17 billion commitment by us; improving the way that we support TAFE, something people have been wanting to see after $3 billion has been cut by the coalition in government and another $300 million put on top of that; and a commitment to restore funding to hospitals and health, where the budget has a $2.1 billion cut by the coalition that we counter with a $2.8 billion investment in health. So from Labor you have bigger, better, fairer tax cuts, and you have a better option in terms of social investments across schools, TAFE and health.

If you want to talk about contrasts, as has been invited by some coalition MPs, one of the sharpest contrasts was delivered in the Leader of the Opposition's budget-in-reply speech where he quite simply, in the most devastating of lines, said, 'Well, if you want, we'll put $17 billion into schools and you can give $17 billion to the banks.' That's a pretty tough choice, because people know they want to see not just a tax cut but also what you can do in terms of the broader economy and, importantly, the broader community and that you have a longer term plan—because, given the changes that will happen down the track, how can you conceivably argue that cutting school funding, TAFE funding and university funding will help position us for the longer term? As I said, it's simply inconceivable. So, by way of contrast, we have a very thorough contrast that's been put right before the Australian people.

But having said that, and bearing in mind that they're the government and we're the opposition, we've been up-front since budget night. We've said we'll support the proposed changes that are to take effect from this year—no problem—but the government would need to split the bills. So it could vote for the cuts this year and it would get our support, and that could certainly pass instantly, but we do need details for the other tranches that are coming. What's it going to cost for tranches 2 and 3? The government has not been forthcoming in telling us how much it's going to cost. For a plan that costs $13 billion over the forward estimates and, according to the government, $140 billion over the medium term, I reckon you'd probably need some detail to be able to back that up. We have repeatedly pursued senior figures within the coalition government, from the Prime Minister to the Treasurer, asking them to be able to come up with that detail, and they've refused to do so. So how are you supposed to back a plan that is so big without the details for various components of that plan? It makes no sense. We're quite happy to say, as we have indicated earlier, that we'll back the first part—no problem—but you're going to have to come up with the detail. To be honest, I don't think most people in the general public would have a contrary view to that in any way whatsoever, and what I think is becoming apparent to the coalition as well is that there'll be people in the other place that will be asking the same question and will exert a great degree of influence to see that type of detail coming.

Again, taking the point from the member for Boothby, we relish the opportunity for difference. People often complain that they think that the two parties look too much the same. I don't think that's been the case for quite some time. I think there have been quite clear differences between our respective parties, and there could be no clearer difference in terms of our approaches than the way in which we tackle the nation's finances. We are in the position where we haven't put forward an $80 billion corporate tax cut. This has limited the options of those opposite. They can't walk away from it, they know the public's not buying it, and now they have very little flexibility in terms of trying to come up with a different or better proposition in terms of tax cuts for ordinary Australians. The best they're going to do is what they've got right now.

We'll cop the heat that has been extended to us so far by the coalition in terms of some of the positions we've put forward, but bear in mind that for some of the things that people thought would be too difficult to advance in the public space, be it negative gearing reform, changes to superannuation and the like, the reality is that Labor has been able to secure greater support for its reforms in terms of those things. The things that were screamed at by the coalition when we first announced them are generally finding favour in the public. You'll also find there will undoubtedly be some people who do not like the idea of making reforms to dividend imputation, but a lot of other people understand you can't get a tax refund if you're not paying any tax.

This is the type of thing that is going to find favour in the public, but it also strengthens our ability to do a number of things: (1) make sure we're in a position to bring the budget into surplus at the same time as the coalition; (2) make sure we're able to deliver stronger surpluses in the years ahead; and (3) be able to combine tax cuts that are better than the coalition's and also fund the social investments that people expect. That's what we've been able to do. It's done with a long-term view. The coalition is always having to basically scramble together one thing after the other to find favour for some other plan that didn't find favour—corporate tax one day, these tax cuts the next, with no detail provided on the personal income tax side. So the contrast couldn't be clearer.

We certainly do support to amendments moved by the shadow Treasurer. We welcome the difference. Again, as the Leader of the Opposition says, if it's a difference that comes down to this, we're happy to do it—we'll put $17 billion into schools, and those opposite can put $17 billion into banks, and we'll see what plan the public supports. I think they know and we know exactly which plan the public will support.

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