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

It's my great honour to have the opportunity to respond to Senator Wong's motion to take note. If we needed any more evidence at all that the Labor Party, which she represents in this chamber, has no plan whatsoever to stimulate investment, to stimulate growth, to create jobs and to increase wages, then that speech was evidence of it. It contained no ideas, it contained no proposals and it contained no measures from the alternative government of Australia. All it contained was rhetoric and criticism and complaint. There was not one constructive suggestion or proposal anywhere in that speech. It contained a number of what I would characterise as intellectual errors and sloppiness that I wouldn't expect to see from someone of the stature of the Leader of the Opposition in the Senate—herself a former finance minister. I particularly appreciated the emphasis that Senator Wong placed on the supposed letter from the Business Council of Australia and how they have seized upon this as evidence that, if company tax is cut in Australia, there will be no increase in investment, there will be no increase in employment, there will be no increase in wages and there will be no increase in tax revenue.

As Senator Wong would know well from her time as finance minister, businesses don't pay taxes in this country as part of some kind of bargain, as she characterised it, or because they've signed a letter to the Senate crossbench or anyone else for that matter. They pay tax because they are legally required to, and they pay tax when they make a profit. Anything that we can do to ensure that business is making a profit and is therefore paying tax is a very prudent and sensible thing to do, and that's exactly what the government's enterprise tax plan does. It will stimulate investment by increasing the return on that investment and will encourage investors, both domestic and foreign, to invest more of their scarce capital here in Australia—as opposed to other places in the world where they could invest it—by guaranteeing them a better return on that investment. They won't be investing because of goodwill and they won't be investing because they love Australia or our weather or our food or our furry animals; they'll be investing because they'll be able to get a better return than they once did and they'll be able to get a better return here relative to the alternative places they could invest.

The word 'backflip' is often abused in political commentary. Usually the word 'backflip' is applied to a party or a person who changes their position on something. But, of course, when you do a backflip, you're flipping around and falling exactly where you were before. In a funny way, that's what the Labor opposition has done this week. We know, as Senator Cormann quoted throughout question time today, that Senator Wong, the shadow Treasurer and the Leader of the Opposition, Mr Shorten, have all been on the record in the past very eloquently supporting the case for business tax cuts in this country. They were then dragged, perhaps by the Greens or others, to oppose that position, and this week we have seen that they're on the way back to supporting them again.

Mr Shorten revealed this week that they may support the tax cut that has already been legislated for small and medium sized enterprises with up to $50 million in revenue. The backflip completed this week by the opposition is a real backflip indeed. They are back to a position that they used to hold a couple of years ago. It's good progress. I welcome it. There's only a little bit further for them to go. They should keep heading down the path that they're on. They should concede the argument, as they clearly have, that tax cuts for small and medium enterprise businesses are a good thing and the right thing to support, and they should follow that position to its logical conclusion. They should realise that supporting tax cuts for businesses with over $50 million in revenue will have the same beneficial impact as cutting taxes for businesses with under $50 million in revenue. In fact, as some economists argue, there is reason to believe that the beneficial impact of cutting taxes for businesses with over $50 million in revenue may be larger than the benefit from cutting taxes for small- and medium-sized businesses—though, no doubt, the impact will be positive for both.

I hope the sign this week is that the opposition are on a positive trajectory, a sensible trajectory. I hope they're reconsidering their previous populist opposition to company tax cuts. I hope they will do a real backflip in relation to the position they all held not that long ago, much as it might trouble some on their benches, Senator Cameron and Senator Carr included. Their own colleagues have very eloquently supported the case for business tax cuts in the past. I hope we will see them do so again. We've seen a ray of hope this week. There is light at the end of the tunnel. We may soon be able to see a much more sensible policy on business tax cuts from the opposition.