James Paterson (Victoria, Liberal Party) Share this | Hansard source

Mr Acting Deputy President Whish-Wilson, I was lucky enough to make it into the chamber for the tail end of your contribution to this debate. While I certainly will not respond to everything you said in your speech, it would be remiss of me not to take the opportunity to address your comments about trickle-down economics. This is a personal bugbear of mine, I admit, but trickle-down economics is something that exists only in the minds of those who are opposed to it. There was actually a study done on this in recent years—I do not have it to hand, unfortunately—and there is no evidence throughout economic history that any advocate of supply-side economics, which is a better description of what I think you are referring to, has ever used the phrase 'trickle-down economics' in a persuasive way, in a way that they believe in when arguing for it. It is like neoliberalism: you will hear about neoliberalism a lot in universities and amongst the minds of those who are opposed to neoliberalism, but no-one in the history of economic thought has described themselves as a neoliberal. Anyway, that is not the substantive issue that we are here to debate today.

Let me also respond to Senator Watt's comments about Reaganomics. Unfortunately, he has got his history a little bit wrong, as is often the case in this area. The tax cuts that Ronald Regan presided over as President were primarily to personal income tax cuts, although there also were company tax cuts under his presidency. They were very substantial cuts to the rates of personal income tax in America, but to say that that caused the deficit in America under his presidency is curious on a number of grounds. One of those, and most importantly, is that the revenue collected from individuals after the tax rates were cut in fact increased rather than decreased. This is something that has been seen throughout economic history, but particularly throughout American history. It was the case under President JFK, as it was the case under President Reagan: cuts to individual tax rates in fact resulted in increased levels of revenue for the government, not decreased levels of revenue.

With those two historical side points aside, I now want to address the substance of the debate here today. I am very proud to be here to speak in favour of the government's Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016, because I believe it will make Australia more competitive and more prosperous. It will encourage more investment, and, ultimately, that will lead to higher wages and better jobs for Australians. I am very proud to be here to support this policy today.

You need not take my word for it.