Sarah Hanson-Young (SA, Australian Greens) Share this | Hansard source

I rise to contribute to this debate on the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 today. And, boy, haven't we heard the ideologues from the Liberal government out in force today, trying their hardest to convince people that if you give big corporate tax cuts to the big banks in Australia then somehow Australian workers will get rewarded with higher wages. Well, we all know that is just not true. And I've seen today of course that Pauline Hanson and One Nation are ready to sign on the dotted line to tick these tax cuts through. Well, Senator Hanson and One Nation are either sellouts—frauds—or fools, or possibly both. The truth is that this is a debate about what we prioritise as a parliament, what a government prioritises in terms of spending. It is a debate between everyday Australians and the interests of big business, corporate Australia and rich shareholders. That is what this is all about. It is the battlers, the workers and the future generation versus the banks, the CEOs and the rich shareholders. That is what is going on here.

Tax cuts do not pay for themselves. They never have—not once—anywhere, ever. The theory that tax cuts generate wealth for the wealthy and that this wealth somehow trickles down to the rest of us has never been borne out by the facts. We just heard from the ideologues on the government side the theory underpinning the company tax cut we're voting on today. The concept has been completely discredited. It is delusional and dumb economics motivated less by evidence than by ideology. Governments raise revenue with tax. The lower the tax rate, the lower the government's revenue. With no revenue, there's no money to pay for services. Governments have two ways to pay for essential services like health, education, energy and even national defence: with revenue or with debt—which is, after all, just deferred taxation. Debt will be accrued to pay for this government's handout to corporate Australia, rich shareholders and the big banks.

The government likes to crow about the effects of the Trump tax cuts on the US economy. Let's talk for a short moment about the effects of the Trump tax cuts on debt. The independent and non-partisan US Congress Joint Committee on Taxation released its modelling of the Trump tax plan in November. It found the cut would push the US economy $1½ trillion into debt. That is a lot of money to ask future taxpayers to pay for a handout for billionaires today. Trump himself said his tax plan has made a bunch of billionaires much richer. Prime Minister Malcolm Turnbull wants to make billionaires and millionaires in this country much richer too. That is the priority of this government, not looking after the wages of everyday Australians or ensuring we have enough money to fund our schools and hospitals. We're always being told the tax cut will end up driving investment and stimulating jobs growth. The government is trying to push an agenda where Australia follows the example of Donald Trump. Do you know what the US Congress Joint Committee on Taxation said Donald Trump's company tax cuts would actually create and what the effect on the economy would be once you include all of the jobs and investment they are supposed to generate in theory? The answer was debt. They said Trump's tax cuts cost the budget $3 for every dollar it generates. That doesn't sound like a very wise investment to me. Three dollars lost for every dollar gained is the example Treasurer Scott Morrison thinks we should be following.

When we cut taxes, we cut our ability to pay for things we need. Those services don't stop being necessary because we are unable to afford them. Instead we put it on our collective credit card. That's what this government is asking Australians to cop today. This tax cut for big business and banks is a giveaway we're going to be paying for with generational debt. We have to pay it back with interest. The government says they have a plan to make sure it absorbs the cost of the cash giveaway within the budget and it doesn't jeopardise the return to surplus. I want to make something crystal clear to all those in the chamber today who believe taxation is theft and debt is theft deferred to a later date. I appeal to those who believe deeply that every year we run a deficit hurts future generations of taxpayers. We've heard this many times in this place. Why on earth would you give this government a $65 billion cheque to hand to big business and banks? We would have less debt and fewer deficits if this cut were blocked. The deficit this year is nearly $24 billion. That's how much of the operation of government we're funding with debt. We're set to add billions of dollars to the national debt, all of which has to be paid back with interest, so we can give more post-tax income to companies like the Commonwealth Bank, Westpac and the big supermarkets like Coles and Woolies.

The question for the Senate is: do we want to spend Australian taxpayer money in this way? We in the Greens don't buy the budget emergency the government used to argue about. It seems to have been forgotten now their big business mates want a handout. We in the Greens, like many esteemed economists around the country, believe there is good debt and bad debt. If we're investing in productive infrastructure and a humane and strong social safety net, we're building a nation better equipped to pay back the debt many times over.

What we should be doing is building a nation that teaches its children better than any other nation in the world. We could do that if we wanted to fund it. We should be building a nation that offers its citizens clear air, clean water, clean streets and clean energy. We could do that if we wanted to pay for it. We should be building an economy that works for all of us. We should be doing that. We should be doing that by asking companies to pay into that nation-building mission. When we give them a discount on their contribution, we either wind back our ambitions as a nation or we fund them by paying more tax in other ways.

Asking everyday mum and dads to pay more tax so the mega rich corporate giants can pay less is not a fair way to fund our nation-building projects and to fund our country. We reject that as a choice because it's not fair, because it's not smart and because it's not right. But even more than that, we reject the idea that Australians should need to choose. This tax giveaway makes it harder for us to pay for the things we need. But it also makes us choose between what we're about to lose. The cost of this will be $65 billion. We don't have to give that to media barons who stoke resentment and fear. We don't have to give money to oil and gas companies to make it cheaper for them to pollute our water, our sky, our farmlands and our planet. We don't have to give money to pokie empires that prey on vulnerable members of the community and line their own pockets with other peoples' misery and desperation. We don't have to give money to coal companies to help them sabotage action on climate change. And yet that is what we're being asked to do today.

Companies like Microsoft, Apple, Google and IKEA aren't going to stop avoiding tax just because we lower the rate from 30 to 25 per cent. They don't want to pay tax at all. They try their hardest to get out of paying tax: through a complex series of profit-shifting arrangements, these big companies transfer income from where it's earned to where it's taxed; in every step of the process, they take a little off the top for themselves in transfer costs. They're gaming the system. And when we finally end up counting what's owed in tax, we find that these companies have whittled their tax obligations down to nearly nothing.

Everyday Australians can't do those sorts of tax tricks that these big multinational companies get away with. They're left to pick up the tab for the tax cut that simply means it takes fewer steps for a company to hide money from the tax collector. We're raising less revenue by giving money to companies who aren't paying their fair share of tax in the first place. We're paying their bills in the form of debts and cuts and sacrifices and hardship. If this company tax cut goes ahead, all that will happen is companies will have more post-tax income to hide in their tax shelters. Are we really going to support a plan that gives more money to multinationals who aren't paying the appropriate rate of tax on their income already?

Let's not be naive and imagine these tax-shifting corporates are going to invest any more in Australia as a result of this tax cut. Their investment decisions are not contingent on how high the headline rate of taxation is; their investment decisions are determined by how much tax they end up paying in the end. The tax rate is just where you start at. Where you end up is determined by how much we're giving these companies in deductions, offsets, subsidies and incentives. Once you factor all of those things in, the government's argument unravels.

This Liberal government focus on the headline because they don't want Australians to focus on the detail. The headline rate doesn't matter if nobody is paying it anyway. The average corporate tax rate in Australia, according to the CBO, is 17 per cent. Seventeen per cent is the fourth-lowest average corporate tax rate in the G20. The government think Australia is a high-taxing country. Well, they're wrong—the data proves it. We're a low-tax country at a time when we're being asked if we should become an even lower one. That means less revenue to fund the services Australians need. We are being told that if we don't we are going to lose money to every other country in the world with a higher headline company tax rate. The race to the bottom. The arms race on tax cuts.

But in looking at the headline statutory rates around the world, you see that if we're really trying to chase company tax rates why isn't the government concerned about competing for global capital against countries like Uzbekistan or Oman, with a 12 per cent tax rate—Uzbekistan has 7.5 per cent. The reason this government talks about the United States only is that it doesn't really care about being competitive; it just cares about cutting.

Companies invest for all sorts of reasons. We're not missing out on investments that are floating over to Uzbekistan. We're attracting investment from all over the world because we've got a smart, healthy, stable democracy. It is safe, secure, strong and sustainable. We've got that way and we've got that economy here in Australia because we've been investing in smart people, through investments in early childhood education, in schools and in tertiary education. Companies want the best and brightest to work for them. They come to Australia because that's where you're going to find the best and brightest. We made that happen by funding these services. We funded these services with tax, with revenue—taxes collected by the government. We're healthy because we invest in universal health care and support strong public hospitals and clinics. We don't bankrupt people for getting sick. We help them get better. Companies want to hire healthy and productive workforces. That's what Australia has. We have a healthy population, because we've built it. We built it with government revenue, government revenue that has come from tax.

The private sector might build and produce great cars, but it doesn't matter how good your car is if you have no roads to drive it on. We built the roads with government revenue generated by tax. When we lose tax in a handout to mega-rich corporations, we lose the ability to keep the Australia we want, the prosperous, egalitarian nation that we are.

Let me be clear, this is not a tax cut for battlers. This is a tax cut for bank executives and rich shareholders. This tax cut hurts pensioners, single parents, teachers, nurses and students. It hurts mums and dads who are struggling to put food on the kitchen table. It says that rather than spending money on you—Australians who are working every day, struggling with low wage growth and struggling to afford the next round of school uniforms or the next school excursion—the government wants to spend money on ExxonMobil.

It's worth noting the cynicism and hypocrisy that surrounds this tax cut. The government says it opposes Labor's franking credit policy because it means less money for those who pay the bills with those credits. Franking credits are refunds on money that companies pay in tax. If companies pay less tax, self-funded retirees get paid less in tax refunds. You can't seriously say you care about the income of age pensioners and retirees and then turn around and vote for this crappy, crappy bill. There are millions of Australians in every corner of the country who need the help of the people in this place to vote this bill down. In passing this legislation, what we're being asked to do at the moment is to hurt them rather than help them. That's the real choice this bill represents.

We've heard that Pauline Hanson and One Nation want to vote with the government to send this tax cut through. When One Nation votes with the government, they will vote to back billion dollar empires over battlers. When One Nation votes for this bill, they're boosting multinational profits over boosting pensions. When One Nation votes for this bill, they will be making Google's tax bill cheaper. They will be doing nothing to help lower the energy costs and power bills of everyday Australians.

What we're not hearing about is what we're going to lose if this bill passes. What is at stake is more than just a budget figure: it's the ability to fund every school in every state fully and fairly; and it's the ability to turn around a VET sector that is on life support. We will lose the ability to guarantee clean water and air for every generation of Australians yet to come. It's about choices, and the government is asking the Senate today to choose big banks, corporate CEOs and rich shareholders over everyday Australians. With this bill the Senate is being asked to choose fat cats in the big banks over nurses and teachers right across the country. As a nation, we can spend our money on anything we want. We don't have to chase Donald Trump into an economic black hole. We don't have to pump more money into tax shelters so that billionaires can get bigger bonuses. We don't have to water down what makes Australia great. We can actually invest this money into the services that will invest in everyday Australians.

I put it to One Nation and the other crossbenchers in this place: who are you going to back? Are you going to back everyday Australians, working mums and dads, and future generations or the greasy pockets of big corporate CEOs and rich shareholders? Are you going to back the big banks, Woolies and Coles, and Google over everyday Australians? It's a choice that the crossbenchers need to make. The Greens are firm, as we've always been. We will back Australians and the community over big banks and fat cats any day of the week.