House debates

Tuesday, 22 November 2022

Matters of Public Importance

Cost of Living

3:29 pm

Photo of Stephen JonesStephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

Well. That was the worst minister in the worst government since Federation doing his unimpressive best to try to blame a government that has been in power for six months for the efforts that we are putting in to clean up the mess that they left this country in after nine terrible years of appalling government. They whinge about budget management! They left us with a trillion dollars of debt and tell us the books were in good condition! I'd hate to see what the books would look like if they were in bad condition, when we've got a trillion dollars of debt.

The bloke whose single contribution to public policy, his most memorable contribution to public life over the last 11 years, has been to doctor an annual report of the Lord Mayor of Sydney, is now trying to doctor history by telling us that the budget was balanced. If you can balance a budget by going out and purchasing cheap giveaway coffee mugs saying 'back in black', then they had the job nailed. But, unfortunately, it was never true. They cannot cope with the truth.

They have handed this government a structural budget deficit. They thought they could deal with the structural budget deficit by turning up year in, year out and just pretending to the Australian people, 'We will just sprinkle magic growth dust.' It's magical thinking: sprinkle magic growth dust over the budget numbers and sometime down the track the budget is going to come back into surplus! It won't be in three years or four years over the forward estimates, it won't even be in 10 years over the medium term, but, sometime down the track, if they just hold their breath and hope and sprinkle a little of that magic growth dust, the budget is going to come back into surplus. Well, here's a hard truth: it won't, and you can't keep saying it and make it true.

The grown-ups are now in charge. The grown-ups are now running the country. And, yes, we are going to have an honest conversation with the Australian people. Labor wants to make sure people can continue to have excellent health care, can go to their GP and local hospital and can ensure they have access to the medicines they need. We are making them cheaper, by the way. Labor wants to ensure that we can continue to provide excellent health care. We also want to ensure that we can continue to look after people who are relying on the National Disability Insurance Scheme for some dignity and assistance—whether for them or for their carers. But those opposite have left the system in a mess, and it falls to us to clean it up.

In aged care there is a legacy of neglect. It is going to cost billions of dollars to fix the mess that they have left the system in. We are having the honest conversation with the Australian people. We cannot provide dignity to our oldest Australians, our most precious Australians, unless we inject more money into the system and ensure that the system is well funded, and, yes, that the people who work in the system are well paid. We support it, and we will fund it.

They talk about national defence, but this is more of the magical thinking. We will ensure that our Defence Force and our military have the equipment that they need, and that we are properly funding our defence forces. What we ask in return from our defence establishment is to ensure that every single dollar is well spent. We want to spend more money on national defence, but we want to ensure that every single dollar is well spent.

The difference between the Albanese Labor government and the magical, infant thinking of those who now occupy the opposition benches is that we are honest with the Australian people. We cannot continue to improve Medicare, to pay for medicines, to ensure we can have world-class early childhood education and child care, we cannot ensure we have the best and most well-equipped Defence Force, we cannot ensure we are going to be able to provide the sorts of care to Australians in their hours of needs that we want our elderly Australians to be able to have—we cannot continue to do this with the structural budget deficit that they have left us. So, yes, we need to have a conversation about revenue, and we're having a conversation about revenue.

I was delighted to hear the member for Hume raise the issue of off-market share buybacks; I was delighted to hear the member for Hume talk about that and the not illegal but improper use of franking dividends to fund off-market share buybacks. Labor created the system of dividend imputation; we set it up. It was Labor who ensured ordinary mum-and-dad investors weren't going to be double taxed when they invested on the Australian share market. We set up the system of dividend imputation and the franking credits system which is the accounting mechanism to ensure those tax credits are allocated to shareholders. When we did that, we wanted to encourage people to invest in the share market. It was never the purpose of franking credits to allow large companies—and I'm talking about the biggest companies on the Australian Stock Exchange—to use excess franking credits they cannot distribute, to go to certain institutional investors and say, 'I will give you a cut-price share buyback and hand you over some of these excess franking credits in exchange.' This means the Australian taxpayer is subsidising share buybacks for Australia's largest companies. It is costing the budget on average $200 million a year.

What companies am I talking about? In 2022 Westpac purchased $3.5 billion of its own shares but used $1.6 billion worth of franking credits to subsidise the purchase of those shares. That means the Australian taxpayer subsidised that share buy, to the tune of $1.6 billion. For JB Hi-Fi: $250 million worth of share buybacks, $93.9 million worth of franking credits. For Commonwealth Bank: $6 billion of buybacks paid for in part by $1.98 billion worth of franking credits. This is the Australian taxpayer subsidising the share buybacks.

But it's not only the Australian taxpayer who is suffering; it's all the other mum-and-dad investors. The opposition say they stick up for mum-and-dad investors but, I can tell you, there wasn't a CEO or company secretary going to mum-and-dad investors and saying, 'Would you like to have some of these cut-price shares that I want to buy back off you?' No—they weren't available to mum-and-dad retail investors; they were only available to the big institutional investors. If you want to hear a complaint about mum-and-dad investors, how about the way they are treated in the companies they have shareholdings in? They do not get treated in the same way as the big institutional investors. These guys opposite want to defend the status quo. We're sticking up for mum-and-dad investors, and we will ensure we treat off-market share buybacks in exactly the same way as on-market share buybacks.

We are going to ensure we legislate this, and the Australian budget will be $200 million a year stronger because of it. I dare those opposite to stand there and say, 'If Labor legislates it, we will reverse it.' We know they won't, because they've got a question to answer: 'Is that $200 million a year better off helping to do budget repair, better off investing in some community infrastructure, better off assisting to pay for an aged-care worker who is already struggling under wages that don't enable them to pay the rent? Is that a better use of that $200 million a year, or are we going to provide a $200 million-a-year subsidy to some of the biggest companies and the biggest institutional investors at the expense of mum-and-dad investors and Australian taxpayers?' It's not a hard question for us to answer. We don't believe in magical thinking. We don't believe in magic growth dust. We know we have to have an honest conversation with the Australian people, and, yes, that means sometimes making tough decisions. We will always make the tough decisions that are in the interests of ordinary Australians, backing mums and dads, backing ordinary Australians. If it means taking on the big institutional investors or the big companies, we will do it. We will repair the budget, we will make our nation stronger, we will make our nation fairer and we will resist every step of the way the small-minded, dishonest politics we have just seen demonstrated by the member for Hume.


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