Eric Abetz (Tasmania, Liberal Party) Share this | Hansard source

In the absence of the Greens senator who was supposed to speak, I'm absolutely delighted to support this legislation. I would encourage colleagues to consider that the practical consequences and benefits of the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 are not necessarily reflected in the bill's title. Rather than calling it 'enterprise tax plan No. 2', personally I would be calling it the 'jobs and wages growth plan' because this bill will increase jobs and wages growth. It will increase job opportunities for our young Australians. This bill will increase the take-home pay of Australia's wage earners.

This bill is not an exercise in economic theory; this bill is an exercise to assist the men and women of Australia with their household budgets. It's an exercise in ensuring that those that don't have a job have a greater opportunity of obtaining a job, and that those that are currently in a job are able to look forward to higher wages. Experience overseas shows unequivocally that lower tax rates for companies translate into more jobs. My colleague who spoke just before me, Senator Jim Molan, pointed that out exceptionally well with the numerous examples that he provided. I don't intend to repeat those examples.

The nature of enterprise is to build and expand, and if you want that building and expansion, which is based on risk taking and reward for effort, then you need to provide incentives to encourage that positive behaviour. In a world where Australians—and, indeed, all the world's investors—have plenty of scope and options for investment, we in Australia need to be competitive and to remain so. Currently, we are slipping behind the rest of the world. The more we tax, the less attractive we are to investment. So the higher the tax, the less the investment; the lower the investment, the fewer jobs there are. Of course, with fewer jobs comes all the social dislocation that I trust nobody in this place would want to see. The fewer jobs there are, the greater the pressure to dampen wages growth. So the more tax companies pay, the less capacity they have to pay higher wages, the less capacity they have to create more employment opportunities.

In the face of this logical, perfectly sensible approach, we hear the ugly words of envy and jealousy from the ACTU and, therefore, the ALP and the Greens in circumstances where at least the Australian Labor Party actually know so much better. The simple fact is:

If you are against cutting company tax, you are against economic growth. If you are against economic growth, then you are against jobs.

These are not the words of somebody like Robert Menzies or John Howard or the Institute of Public Affairs; these are the words spoken by a former Labor Prime Minister, Julia Gillard. She got it. She understood it.

It's all pretty easy and all pretty logical when you know that investment creates jobs and wages growth. How do you encourage that investment? By reducing the tax burden, especially in circumstances where investment is now a worldwide opportunity and, therefore, people will take their capital and investment to those countries where the tax regime is somewhat more favourable. Ms Gillard, in the House of Representatives, said: 'If you are against cutting company tax, you are against economic growth. If you are against economic growth, then you are against jobs.' She simply made a very honest statement of fact. As I said, it was uttered by none other than a Labor leader. So she got it. One wonders why the current Labor Party don't get it.

The unavoidable fact is that capital and investment flow to tax competitive nations and capital and investment create jobs. Therefore, if you want jobs, you need investment. If you want investment, you need to have a competitive tax regime. It really isn't that hard to work out. Economics 101 should have taught everybody in this chamber that fundamental principle. Even the Labor leader in this place acknowledged these facts when she said:

We understand that the cut in the corporate tax rate is important to increase productivity, to promote broad based economic growth and to encourage more investment and jobs across Australia. Lowering of the company tax rate is good economic policy.

So here we have not only Ms Gillard but also Senator Penny Wong endorsing this approach to jobs growth and wages growth—and I welcome her contribution. It's just a pity that the Australian Labor Party don't seem to be able to be consistent in relation to these matters. It seems that, when they're in government, they understand good economic policy but, when they're in opposition, they seek to play the ugly game of envy, of jealousy and of trying to divide the nation in some sort of faux class warfare.

Just in case there are any on the opposition benches who are concerned to learn what the view of their current leader, Mr Shorten, is, let me quote him and remind those hapless Labor senators who are struggling with this legislation. There are many, many quotes from Mr Shorten, but allow me to offer just a few to the Senate. He has said:

Cutting the company tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

So what is it that has changed in the economic construct since 2011 to 2018? That fundamental economic principle has held true throughout human endeavour. As we see countries all around the world reducing their corporate tax rates, it is important that Australia remain in play and remain competitive. Mr Shorten got it in 2011. He's got to explain to the Australian people why, in 2018, that fundamental economic principle no longer applies—can be put through the shredder and can be discarded like a soiled tissue no longer of any consequence. Of course it is of consequence to the Australian men and women who need and deserve higher wages, and those unemployed Australians who need and deserve a job, if we can get the policy setting right.

The Labor Party knew only a matter of five, six or seven years ago what they had to do to enhance job opportunities and wages growth. We on this side know what needs to be done. As I reach out across the aisle to those in the Labor Party, I don't have to rely on any statement from Prime Minister Turnbull or Treasurer Scott Morrison. No, I rely on the statements of the former Labor leader Julia Gillard, the Labor leader in this place, Senator Wong, and the alternative Prime Minister, Mr Shorten, who all support this approach to the tax regime. Indeed, you can just imagine Mr Shorten delivering this to the Australian Council of Social Service's national conference:

Friends, corporate tax reform helps Australia's private sector grow and it creates jobs right up and down the income ladder.

In other words, Mr Shorten knew, and was willing to go to ACOSS whilst he was a minister and tell them, the importance of company tax rates being reduced—not on the basis of some theoretical economic exercise, but his absolute belief and understanding that to do so would create jobs right up and down the income ladder. I say amen to that. It's absolutely true. It is correct. It is undisputed.

So you have to ask the question: why is the alternative Prime Minister today going back, crab-like, and walking away from those statements that he made whilst he was a minister of the Crown and knew what he had to do? What he's doing is acting as a spoiler in a very important debate in this country, a debate that wants to see even more jobs growth. I recall saying back in 2013, as the shadow minister for employment at the time, with the then Leader of the Opposition, that, if we were to gain government, we would seek to create one million jobs in the first five years of government. That was ridiculed; it was pilloried. Today, with about six months still to go, we are nearly at that one-million threshold that we set ourselves. But, having set ourselves that goal and going to achieve it, we are not going to rest on our laurels and say that that is where it finishes and ends. We say, 'No, we want to create even more jobs, even more opportunities, even higher wages.' That is why we are seeking to introduce this legislation.

Indeed, Mr Shorten, in a TV interview, said—listen to this:

Any student of Australian business and economic history since the mid-80s knows that part of Australia's success was derived through the reduction in the company tax rate … We need to be able to make life easier for Australian business, which employs two in every three Australians.

Mr Shorten himself recognises what needs to be done to look after two-thirds of the Australian workforce. Indeed, so sure was he of the need for this policy, he was able to say 'any student of Australian business and economic history' knows that this is essential. So, if he knew in 2012 that this was essential, why is it that today he cannot bring himself to say: 'Yes, it remains essential. Yes, we have to drive up wages growth. Yes, we do need even more employment opportunities for our fellow Australians'? I will tell you why: he is playing a very cheap and nasty game, seeking to play the politics of division at the expense of our fellow Australians who do need wages growth and who do need employment opportunities.

Sadly, what we have laid out before our fellow Australians yet again is the duplicity of the Labor Party. Labor are hoping that the electorate might believe their false, misleading and ugly rhetoric, dripping with jealousy and envy about profits, when Labor actually know the truth: that company profits translate into jobs and wages growth. We know that because Labor know it. We know that Labor know. Why do we know this? Because Labor have told us so. That is the great difficulty and the credibility gap that the Leader of the Opposition and all his colleagues suffer from today. They know the truth and they know what good policy is, but cheap politics denies them the opportunity to say that which is needed.

Let's also understand that the higher the tax regime the more Australian consumers and workers pay. Why do I say that? Well, there was a certain doctor of economics who opined, and let me quote: 'Company taxes end up being paid by consumers and workers.' Who might that doctor of economics be? None other than another Labor spokesman, Dr Andrew Leigh, who has a position in the other house on Labor's frontbench. So, no matter how you approach this issue in relation to consumers being worse off, workers being worse off, the unemployed being worse off and household budgets being worse off, we have all the statements from Labor spokesmen, time and time and time again, indicating why this policy should be implemented and implemented to its full. So I yet again ask the Australian Labor Party: why is that which was common sense, that which was known by 'any student', to quote Mr Shorten, now, all of a sudden, no longer true? Why is it no longer correct? Are they saying that the policy that they pursued when they had the privilege of being in government a wrong policy, a false policy, that did not deliver the dividends to the Australian people that they had promised?

I simply say that the Australian people, courtesy of Labor's stance on this particular policy, have been put on notice as to how Labor would now govern. No longer can we rely on good, sensible economic policy. The Australian people—and I am one—are willing to admit that there was relatively good and sensible economic policy under the Hawke-Keating era. Yes, there were the aberrations, but, in general terms, things were relatively good. But all that common sense and the bipartisan approach to economic reform have been jettisoned in favour of the cheapest and nastiest of politics. There are all the quotes from Labor spokesmen that I've put before the Senate today, from the current leadership team of Mr Shorten and Senator Wong to the former leader, Ms Gillard, and other spokesmen within the Labor Party. They know the truth about the need for this so-called enterprise tax plan. As I said earlier, I wouldn't call it an enterprise tax plan, because the real purpose of this legislation is a jobs and wages growth plan. How do you achieve it? By having an enterprise tax plan.

The real reason, the real rationale, the real thing that drives the coalition on this is our desire to ensure that more of our Australians, especially young Australians, are given the opportunity of employment and that those who do have employment have the capacity to manage their household budgets in circumstances where wages growth has been limited in recent times. The Labor Party have been on record, time and time and time again, saying that cutting company tax does translate into wages growth, but it now seems that the Labor Party, not content with seeking to deny our fellow Australians more job opportunities and wages growth, are also hell-bent on denying our fellow Australians who have scrimped and saved for their retirement by raiding their superannuation and their shareholdings with a dividend imputation credit system. For the Labor Party to have adopted that policy in recent times is another highlight and another indication of how they would govern. There is no tax that the Labor Party is not attracted to; there is no expenditure that the Labor Party doesn't like. In all those circumstances, the Australian people, and especially the next generation, will be so much the worse off. I support this bill and I encourage those in the Labor Party to read the commentary of Senator Wong, Mr Shorten, Ms Gillard and Dr Andrew Leigh, and I especially say that to those on the cross bench.