Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased about that, Mr Speaker. My question is to the Prime Minister. Prime Minister, how is cutting company tax and spreading the benefits of the mining boom essential for building the future Australian economy?

Julia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for Page for her question, and I am glad she has received from the Speaker the reassurance that she has. That is very good news. As a Labor government we are focused on running the economy in the interests of working people and making sure we build the economy this nation will need in the future so that working people can have prosperity, that they can have jobs and that, if as they choose their highest aspiration is to open a small business, they can do that too. In pursuit of that objective, at this time in our nation's history, when we are seeing the mineral wealth in our ground sold at very high prices, when we are seeing a resources boom with hundreds of billions of dollars of investment in the pipeline, it is the right time to take a share of that resources boom and ensure that businesses around the nation benefit—large and small.

This cut in company tax is not only good news for businesses but it is good news for the Australian economy. As OECD research shows, company tax has the biggest adverse effect on economic growth. It follows that if you cut company tax you are helping economic growth. If you are helping economic growth you are then helping the wages of working people. Modelling done at the time of the Henry tax review showed that a one per cent cut in company tax means around $330 a year extra for a worker on an average income. Good for businesses, good for growth, good for jobs and good for wages: that is what a cut in company tax is.

The nation faces a very stark choice on policies on company tax in this parliament. We on this side of the parliament stand for a rate of 29 cents and for delivering the benefit of that cut rate to small businesses first. The opposition stands for a rate of 31½ cents, as a result of their paid parental leave levy. That is a difference of 2½ cents. That matters in the international comparison. Under Labor we will move up two spots in the OECD ranking on company tax—a lower rate than the US, Japan, France, Belgium, Mexico and Spain. Under the opposition we would have the fifth-highest rate in the OECD.

We cannot afford to hold Australia back. We cannot afford to have Australia stand still. We need to build the economy of the future. We owe that to working families, who are seeking to make a living and make their way. We owe that to people in business, who are creating the jobs for their fellow Australians. As a government we are determined to deliver it.