Kimberley Kitching (Victoria, Australian Labor Party) Share this | Hansard source

Despite the government's rhetoric and their self-aggrandising talk of being good economic managers, they are not. They are poor economic managers. Let's look at the federal debt level as an example. They have more than doubled federal debt since they came into government in 2013. Federal debt is now about $600 billion. It's a toxic debt crater that will smoulder for generations to come. It's all rhetoric all of the time from those across the chamber, but their substance is rip-offs and the distortion of our tax system and—even worse than that—being too weak to desire, let alone make, any changes or make any reforms. They say they don't like deficits yet spend like drunken fiscal sailors. They are a government suffering from the ill-effects of having two weak treasurers, firstly Joe Hockey, the former member for North Sydney, and now the member for Cook.

It was the Labor Party that reformed the tax system. The Labor Party got rid of the double-taxation that occurred on the ownership of shares. In 1987, the then Labor government of Prime Minister Hawke and Treasurer Keating introduced imputation credits. When the federal budget was in surplus under former Prime Minister John Howard and former Treasurer Peter Costello—oh, those heady days; how the current members of the ERC must dream about having a surplus—it was they who introduced the scheme allowing people who were not paying any income tax to get cash back under the imputation credits scheme. The cash refunds actually avoid paying single-taxation on dividends. So, it went from double-taxation to single-taxation and, with the method that is in place now, if you are not paying income tax you receive the cash-back and you don't pay any tax at all.

My favourite definition of this scheme is from the member for Fenner, who calls it 'the cane toad of the taxation system'. That is because it cost around $500 million when it was first introduced, but soon it will cost around $8 billion. We heard Senator Cormann say that Treasury advice has been given on this. There have been discussion papers aplenty. Why? I bet Treasury is telling the government, telling the members of the ERC, that these cash-back payments are no longer affordable for our economy. We are the only country with a full refundable imputation system—and that is from the tax centre at KPMG.

What is the government doing? Well, they are weak. They are never going to make any big changes, because they know they are essentially an unstable government. They know they are tick-tocking closer to 30 Newspolls and they know there are murmurings and mumblings from all quarters of the government, so the question that is most pressing for some of those opposite is: should the Prime Minister be taken out in a one-stage or a two-stage process, and should that be done before the mid-year break?

Labor knows the resources accumulated by the state are and should be limited. They know this because it has been the Labor Party that has been the economic reformer in this country. This is because we are willing and we are able to make hard decisions. In a word, we are able and we are willing to govern. It was the ALP that made the hard decision to means test the age pension. No-one wanted to do that. The coalition opposed it, but imagine the state of the federal budget if that hard and difficult decision had not been made.

Senator Abetz says that this policy is motivated by envy. It is not motivated by that at all. It is motivated by knowing that the budget cannot be all things to all people and that hard choices must be made. It is not a divisive policy. It was announced before the Batman by-election. Imagine the hue and cry from those opposite if it had been announced this week: 'Oh, how cynical! You're doing it after the by-election!' Well, it was announced before the by-election. It was given full transparency and the people in Batman voted in Labor. The ability and capacity to make society fair and equitable is perhaps something only the ALP is able to do. (Time expired)