Senate debates

Tuesday, 5 September 2017

Matters of Public Importance

Economy

6:13 pm

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

Judging by that contribution, Senator Polley's knowledge of how the coalition party room works is about as detailed as my knowledge of how the Labor Party caucus works, but at least I know that, when they meet, it is called a caucus and when we meet it is called a party room—but I'm sure Senator Polley's next contribution on this matter will use the correct terminology. I'm very pleased for a couple of reasons to contribute to this discussion tonight. First of all, I'm really heartened by the Labor Party's new-found concern for and focus on fixing the budget. It's not a concern that they showed very much when they were in government, obviously, given that they turned what was the best set of books in the Western world into the worst set of books in the Western world in just a few years, but obviously it is a concern that they have now discovered. I have to say, it is not really a concern they've even had in their first few years in opposition after losing office, because they have fought tooth and nail every single step of the way to deny our choices to fix the budget and to stifle our attempts to bring the budget back into shape. I am pleased to see they now have a concern about fixing the budget. Perhaps we will see in this new-found attitude from the Labor Party a willingness to support some of the savings measures that the government has proposed but have not been successful with in this chamber, in part due to their opposition.

Perhaps the government should bring back to the Senate some savings initiatives that were previously rejected by the Senate, given the Labor Party's new-found concern for this issue.

And they should be concerned about this issue, as we all should be concerned about this issue, because there is nothing fair at all about giving the next generation the obligations that this generation weren't able to meet. There's nothing moral or fair about expecting our children and grandchildren to pick up the tab for the lifestyle that we are leading today and for the expenses that we have failed to meet. Every time the government runs a budget deficit we are spending money on ourselves today that we have failed to fund adequately. I believe that is a very unfair thing. And I'm sure, with the Labor Party's concern about budget fairness, that they will soon reverse their opposition to our savings initiatives and support them to ensure that we can return the budget to surplus more quickly.

I'm also pleased to know that they want to make the tax system fairer, although I am concerned that their policy proposals to do so are somewhat inconsistent with that goal. There is nothing fair about increasing taxes by $150 billion, as the Labor Party propose to do. They propose to do so by increasing taxes on small business. Do we really think it's fair to increase taxes on small business, as well as medium and large businesses, to the tune of $65 billion by not supporting the rest of our Enterprise Tax Plan and reversing the existing tax cuts that we have already delivered to small business as part of our Enterprise Tax Plan? They're planning to increase taxes on housing by $32 billion by scrapping negative gearing, about which I will have more to say in a moment. They're planning to increase taxes by $13 billion by increasing the capital gains tax, which, again, I will have more to say about in a moment. They're planning to increase taxes on family trusts—or, more accurately, small businesses and eventually, no doubt, farmers as well—by $15 billion. They're proposing to increase income taxes on some of the hardest working and most productive Australians by $22 billion. And of course they propose to raise $20 billion more in superannuation than the government currently is, although they haven't specified exactly how they're going to do that.

So, with more than $150 billion of tax increases, I think we are entitled to ask how that is delivering a fairer tax system. How is slugging the Australian people with more tax than they already pay—which, frankly, I think is very high by world standards and higher than I would like it to be—a fair thing to do? If we are to ensure that the tax system is more fair, there is one way we can do that, and that is by cutting taxes. I'm proud to be part of a government that has started to do that, and I look forward to the government being able to do so even more in the future when the budget returns to a state that allows that. Of course, that process will be expedited by hopefully the opposition's newfound position of supporting savings measures in the Senate.

But of course if we want to cut taxes in a fair way then we have to look at who currently pays taxes and who pays the most taxes. It's only logical that those who are currently shouldering the biggest burden of tax should be those who receive the first and most significant tax cuts if such cuts are to come. I'd like all Australians to have a tax cut, but I'd especially like those Australians who are shouldering a particularly heavy burden of tax at the moment to receive a tax cut, and that is particularly those taxpayers who are in the pay-as-you-go tax system who have high incomes and an especially highly taxed form of income.

This motion also relates to housing affordability, and they wouldn't be the Labor Party if they didn't think you could roll up a radical change to the tax system to address an unrelated social problem, which is the very serious problem of housing affordability. All the best international evidence shows, as I have said in debates like this before and as Senator Williams alluded to in his contribution earlier, that the most significant factor in the affordability of housing is not the price of the house itself but the price of the land on which the house sits. The best thing any government can do to ensure that housing becomes more affordable is to make that land more affordable. And how do you make land more affordable? You make more land available. That will increase the supply of land and decrease the price of land. Unfortunately, that's not something that's within the remit of the federal government to control. That's something that state governments control. And I note for the record that the majority of those governments are of the Labor Party persuasion. So perhaps this motion today is intended to shame those state Labor governments into releasing more land so that they the supply of housing can be increased and prices can be reduced so that young people who want to enter the housing market—my generation, many of my friends among them—can do so in a more affordable way.

Finally, we've seen in this debate, as we often do at these times, references to inequality, the catchcry of the Labor Party, which they seem to have picked up from the Greens. There was a very timely research note put out last week—a parliamentary research brief—by the good people at the Institute of Public Affairs, who, some senators will know, I have an association with as my former employer. Daniel Wild published an excellent piece on four facts about inequality in Australia. In the interests of full disclosure, I did not work with Mr Wild directly; he joined the IPA after I left. He published a number of really pertinent facts about the inequality debate, the most important of which is the fact that inequality, as measured by the most academically accepted and reliable measure of inequality, the Gini coefficient, has not increased in Australia; in fact, it's decreased. When you rely on both ABS measures and the superior—in Mr Wild's view—HILDA measures, which I agree are a more a reliable source, income inequality is shown to have decreased—slightly, I admit—from 2001, where it was 0.31, to 0.30 in 2015. That is a positive development.

It is also worth pointing out that although Australia has wealth which is distributed in an unequal way—like all countries that have a free enterprise system do to some extent—by world standards we are a country with very equally distributed wealth. In fact, in the distribution of wealth we are the third most equal country in the developed world, behind only Japan and Belgium. That's according to a recent Credit Suisse report. We are more equal than New Zealand, France, Switzerland, United Kingdom, Netherlands, Germany, United States and Denmark. That is an impressive achievement for Australia.

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