Dean Smith (WA, Liberal Party) Share this | Hansard source

I thank Senator Bartlett for his contribution, because it is important that senators and, indeed, the Australian public get a view of economic policy from the bottom of the garden. There's no starker contrast than the irresponsible economic views and attitudes of the Australian Greens on the future success and progress of this country than through this bill and through the lens of this bill.

I'll keep my comments relatively brief because many, many people have spoken on the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017. But there are two points I want to make. The first is the very real economic reality that we face as a nation with regard to the critical need of having an internationally competitive corporate tax rate. That's the first point. The second point is—and this is a bold prediction—heaven forbid, if Bill Shorten and Labor become the government in this country, my bold prediction is that Bill Shorten and Labor will quickly embrace corporate tax cuts for two reasons. First, it's in their DNA—and I'll come to that shortly—and, second, because Bill Shorten cannot escape the economic reality of the internationally competitive corporate tax environment that we face.

So let me just talk briefly about the need for Australia to maintain its internationally competitive tax rates. The reality is that the rest of the world is moving to reduce corporate tax rates, not by a little bit but by a significant amount, including the Canadians and the Singaporeans. In the United Kingdom they've reduced it to 17 per cent. New Zealand, Norway, Israel, Japan and, indeed, France have shifted their corporate tax rates from 33 per cent to 25 per cent. The most critical issue of course is what action has been taken in the United States to keep their corporate tax rates at a competitive level. It's been well talked about—that the shift from 35 per cent to 21 per cent has probably been the single-most important factor that has motivated us to respond here in Australia.

No action by Australia means that we will have one of the highest corporate tax rates in the OECD. What does that mean? That means there will be a flight of investment out of this country and yet another significant barrier to investment coming into our country. And that will have, that must have, an impact on the availability of employment opportunities for Australians now and also into the future. This particular economic initiative can't be seen and should not be seen in isolation. By not proceeding with this particular economic initiative, what we seek to do is undermine that very real and demonstrated success that the Australian economy has been enjoying in recent years.

Let me talk briefly about what that economic success has been. That's not to say that there aren't tensions. That's not to say that there aren't unrealised opportunities in the Australian economy, but we must constantly be moving forward with reform and not moving backwards, and certainly not stalling. What we know is that at the last election the coalition took a very strong and clear plan to deliver jobs and growth, and that's exactly what has been delivered across the Australian economy over the last few years. According to the ABS, our economy has grown by one per cent in the March quarter to be 3.1 per cent higher than it was a year ago. This is the strongest annual growth rate in around two years and is above the long-term average. Australia is again leading the major advanced economies of the world, bettering the average growth of the OECD and all G7 nations. Importantly, the March quarter national accounts validated the budget's forecasts and confirmed the economy was strengthening as a result of those initiatives contained in the budget. The figures show growth was broad based with all components contributing to growth in the quarter, including household consumption, new public final demand, and net exports. So, this plank of economic reform is as critical as the previous initiatives that have been embraced by this particular government—this coalition government.

Taking no action has consequences. It has been predicted both by the IMF and by the Australian Treasury itself that a lack of action on corporate tax cuts will reduce Australia's GDP by one per cent. Opposition to this initiative is putting a handbrake on economic growth, will make the economy smaller and, in doing so, will deprive Australian businesses and Australian families of much-needed employment and economic growth opportunities. Taking no action has consequences. My bold prediction is that even if Bill Shorten is elected—and that doesn't have to be the case—he cannot escape the very real economic reality that is facing this country in terms of the need to have internationally competitive tax rates.

Briefly, I just want to turn to my second point. That is why this initiative is as much in the DNA of Labor senators as it is in the DNA of coalition senators. Before I do that, let me just make this important point: when you look back through Australian history, and particularly through its economic history, it has been the persistent maintenance of convictions around economic policies—whether it was floating the dollar or the independence of the Reserve Bank—with governments standing steadfast in their desire and their ideas for economic reform, that have led to such prosperity in this country. The coalition's decision to stand by this issue is a triumph of values and principles over expediency. The expedient reaction would have been to abandon this initiative because there's a perception in the community that it's not popular. Well, sometimes the community will reward you for being clear about your values and clear about your principles. On this issue, I'm absolutely convinced that Senator Cormann and the Treasurer, Scott Morrison, will be vindicated on this.

Why is it in the DNA of Labor? Because Labor has said so, Bill Shorten has said so and Chris Bowen has said so. You have heard it many, many times. But I do think, at this final stage of the debate— (Quorum formed) I thank Senator Cameron for his generosity in wanting to give me a bigger audience for my contribution this afternoon. Briefly, let me just end with these few quotes. They're important because you can't escape the truth. Labor are as committed as the coalition to this issue, but they don't have the courage of their convictions. That is the point of difference. The coalition has the courage of its convictions in regard to pursuing economic reform for the long-term benefit of the Australian economy; the Labor Party lacks conviction. What did Bill Shorten say to the House of Representatives on 23 August 2011? He said:

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

It is in Labor's DNA. He also said on 30 March 2011, this time to the Australian Council of Social Service:

Reducing the corporate tax rate … sees more capital flowing into our domestic economy, which will then flow on to workers in the form of higher wages—thereby improving standards of living … reducing the company rate is an economic growth instrument, reducing the corporate tax rate … is also an investment in the Australian people—including people who might now be on welfare …

Those are the words of a man who would like to be Prime Minister. Labor can play the politics, but they can't hide from their previous statements. Finally, before I end my brief contribution, what has the alternative Treasurer said? Chris Bowen, the man who would like to be Treasurer, said in 2014:

As the alternative Treasurer, I'm telling you that I think it would be a better thing if Australia's corporate tax rate was more competitive …

He also said:

I'd like to see it lower over time. I think we've had 14 years of having the corporate tax rate stable. That's too long. Over time, I'd like to see it lowered.

I think the time is now. He also said in his publication Hearts & Minds in 2013:

… it's a Labor thing to have the ambition of reducing company tax, because it promotes investment, creates jobs and drives growth.

He also said in his book:

We do, however, need to be concerned if our company tax rate is on the higher side of the world's advanced economies. At 30 per cent, our company tax rate is now above the OECD average … it is how the rate compares to that of our competitors that counts.

In case it has been lost on Bill Shorten, Chris Bowen and Labor senators, the corporate tax rates of our OECD competitors are now lower. That should be cause for action, because they have said that that would be the reason to act. There's only one point of difference in this chamber tonight. The coalition party is prepared to stand on its principles and convictions when it comes to economic reform, and Labor senators are prepared to abandon their previously held convictions, and undermine economic growth and, in the process, wages growth for ordinary Australian workers and families.