Murray Watt (Queensland, Australian Labor Party) Share this | Hansard source

I do not intend to make a long contribution on this bill, the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016. I know we have a large amount of legislation to get through over the course of this week, but I want to put my position on the record over the course of this debate. Put simply, my position, not surprisingly, is that of the Labor Party's, which is that we support a company tax cut for small businesses with a turnover of up to $2 million per annum. We see absolutely no justification whatsoever for a company tax cut for larger businesses, particularly at this time and particularly with the Australian and world economies as they currently stand.

Really, this bill is just another example of how this government has the wrong priorities for dealing with the challenges that our country faces. Day after day we deal with bills put up by this government that seeks to make cuts to government expenditure and wages and conditions that the poorest in our community and low- and middle-income earners in our community depend upon. Even just in the last couple of weeks we have seen cuts made to family tax benefits, which only go to low- and middle-income families, and, increasingly, are targeted on the very low income earners within our community. We have seen cuts made to payments to single parents. We are still seeing the effects of cuts this government is making to public health funding and to public school funding. It has failed to invest in public transport infrastructure. The government is targeting and making cuts to anything that the average wage earner in Australia depends upon to get ahead in life. We know that the government supports penalty rate cuts as well.

If you are a low- or middle-income earner, if you are an average person in the Australian community, this government constantly comes after you through cuts to government expenditure. The justification that is always provided by the government is that we need to rein in the deficit, which—has it doubled or tripled under their watch?—has certainly increased substantially. But, at the very same time, the same government is willing to provide massive handouts to big business, whether it be in the form of subsidies or through this bill, through reductions in company tax.

The government failed to take any action in relation to the excessive concessions that are available to people through negative gearing, when they are seeking to negatively gear their third, fourth, fifth, 20th, 30th or 40th investment property. It seeks to give big company tax cuts, but, at the same time, it turns around and tell us that it cannot afford to provide government funding to provide decent health care, decent public schooling and decent income support to Australians who need it most.

As well as demonstrating that the government has the wrong priorities, this bill is an example of the government's driving a divide within the Australian community rather than taking action to bring us together. I spoke yesterday about the government's amendments to section 18C of the Racial Discrimination Act, which are going to open the door to more racist speech in our community and thereby facilitate greater division within our community. That is now being done on the economic front by this government as it seeks to provide a big company tax cut of $50 billion over 10 years to big businesses. This will only see the level of inequality in our community increase, where the rich get ahead and the poor are left behind, especially when this government is cutting a range of benefits as well.

Labor is very happy to support a company tax cut for smaller businesses—those with a turnover of up to $2 million a year. We understand that many of them are struggling at the moment, and a company tax cut to those smaller businesses will assist them to stay afloat and, in some instances, may generate some employment. But Labor does not see any justification at all for a company tax cut for the big end of town.

Australia is already one of the lowest taxed countries in the OECD. We are not a highly taxed country, despite the claims that are made to the contrary. We have a large and growing deficit, and yet this government wants to reduce the amount of revenue that it is collecting each year via a company tax cut. We are constantly told by the government that delivering this kind of company tax cut will generate jobs, will generate growth and will generate revenue for the government. It is classic 1980s Reaganomics. Anyone who has looked back on what occurred under President Reagan when he delivered these kinds of company tax cuts will know that the US government deficit ballooned and that there was no obvious economic pay-off to the United States in return for that ballooning deficit, which was largely generated by the excessive tax cuts provided by President Reagan. I fear that what is going to occur in Australia if the government gets this bill through. All it will do is increase the deficit further and increase inequality without any economic pay-off whatsoever.

The other thing worth pointing out about this bill is that it will not benefit regional Australia one little bit. There are not very many businesses in regional Queensland or regional Australia with an annual turnover in the tens of millions of dollars, so there is nothing that will benefit regional Australia by providing tax cuts to large businesses like that. Yet again, it will be another instance where regional Australia is left behind and the already large levels of inequality that we see in regional Australia will only be exacerbated by this bill.

If the argument is that other countries are cutting their company tax rates and therefore we should do the same, to me that is not a satisfactory argument. Just because someone is jumping over a bridge does not mean we have to do the same thing. In fact, what we should be doing is stepping up our efforts towards international harmonisation of tax rates and closing some of the tax evasion that is occurring by companies that are chasing the lowest company tax rate all around the world. Every country in the world has an interest in bringing in sufficient tax revenue, and if we continually chase each other by reducing company tax rates and income tax rates for high income earners then we will be left in a situation where not one country in the world has the revenue that is required to deliver the social services that their populations rightly expect.

In summary, with the Australian economy the way it is at the moment and the budget deficit the way it is at the moment, this is absolutely the wrong time to be cutting big business tax rates. It is the wrong time to do the wrong thing. This bill, if it gets through, will increase the level of inequality in our community. It will drive up the deficit and there will be no economic pay-off whatsoever. That is why I and the rest of the Labor Party will be voting against the company tax cuts for any businesses with a turnover above $2 million a year.