Monday, 2 December 2019
Productivity Commission Amendment (Addressing Inequality) Bill 2017; Second Reading
I want to talk today about the Productivity Commission Amendment (Addressing Inequality) Bill 2017, which purports to stand for inequality, and I want to preface all my comments this morning with our contrasting views of how this can be achieved. We are very much of the view that we, as Australians, should always be striving to grow the pie, to create more opportunities for every Australian, rather than trying to divvy up or slice up an existing pie or potentially a smaller pie. Where we stand today on inequality is fairly clear. The Gini coefficient and also the HILDA data show that over the last couple of decades inequality has been fairly stable in this nation. In fact, on some indications, it has actually reduced over the past few years.
When I talk about no policies for growth, what I really mean is a smaller overall pie, fewer opportunities for Australians to have a good life. Now, the first place I think we should start on this little journey is with Labor's tax policies. In the last election Labor's two centrepiece policies were a new housing tax, which was proposed to create more houses, if you can believe that logic for more than a millisecond, and the now infamous retirees tax. The Master Builders Association commissioned some economic research into the housing tax, which showed it would have resulted in 42,000 fewer homes across Australia, 32,000 fewer jobs, $11 billion less in building activity and overall, frankly, a weaker economy.
The managing director of SQM Research, Louis Christopher, also looked into this absurd housing tax. He said:
In short, if Labor's Negative Gearing policy is legislated in its current form, we expect a rise in rental yields which will occur through a combination of … falling dwelling prices and, eventually, a rise in rents.
Basically, what you would have seen were higher rents. Higher rents will often result in more and more difficulties for lower-income Australians, who have a smaller buffer in which to pay that higher rent. SQM expected that if the housing tax policy had been legislated by a Labor government, there would have been higher rents of between seven and 12 per cent over the 2020 to 2022 period, and in New South Wales it would have been 10 per cent higher rents in Sydney. So there would have been higher rents from that tax, which was proposed to create more houses, which is just hilarious.
Labor's other primary tax was a tax on retirees, basically an unfair and retrospective tax that would have hit 900,000 people with changes to dividend imputation, which could never have been foreseen. Labor, during the election, said that people were 'overinvested in Australian shares', which is basically saying that people shouldn't invest in Australian companies. This tax, the retiree tax, was designed by the industry super funds to create more market share for these funds at the expense of other types of superannuation funds. There's a fund called Australian Super, which during the election campaign said the imputation changes would have 'no material impact on net investment returns'. So the whole of the superannuation sector would have had significant changes but, of course, not the industry super funds—which is just fascinating, isn't it? Former leader Bill Shorten said last week:
We misread the mood about franking credits. In hindsight there were a lot of people who felt vulnerable.
And rightly so. Because the franking credits policy, or the retiree tax, would actually have affected a lot of quite vulnerable people, people who would have scrimped and saved for their retirement only to see this retrospective and unfair tax come into place.
Then we go on to industrial relations, which we spent a lot of last week discussing. Labor can't even support laws which would have upheld the integrity of large parts of the economy. Labor, frankly, have given a green light to the CFMMEU—which has already seen fines of over $16 million have no impact on this union—which has no regard to the law and which basically treats these court fines like speeding tickets. There's another union called the NUW, which has spent $650,000 of members' money on botox, tattoos, cruises, divorce lawyers and weight-loss surgery. So that's all good, apparently. But, of course, unions occupy a privileged position in this nation, where they have a monopoly on representation of workers. What we're saying is, like any other organisation, they should follow the law. The law is, obviously, far too weak.
If you want to talk about banks, that's good: we'll talk about banks. The banks have had a royal commission, they've had a bank levy, and we've put in place the BEAR regime—so, basically, you'll see longer jail sentences and steeper financial penalties for banks, compared to the ensuring integrity bill. If you can't even do the right thing by workers, and if you can't do the thing by the people of Australia, who expect good governance in all institutions, whether it be a bank or a union, then you can't really say that you're seriously concerned about inequality. Why on earth would people want to invest in some of these sectors? If you're a small business in the construction sector, where you're seeing a 30 per cent premium because of the lawlessness of the CFMMEU and other unions, why on earth would you be investing in that sector?
That takes us through industrial relations. Of course, in this area we are interested in an ideology-free discussion, because we're not owned by anyone. That's why the Attorney-General and Minister for Industrial Relations has today put out an issues paper looking at, again, where we can improve things—in this case today, how we can actually work together and how workers and business owners can work together. That is because we're interested in collaboration and in doing the right thing by all Australians. We're not owned by anyone. We're not actually controlled by vested interests.
Then we go on to Labor's trade policies, where Labor failed to do a large trade deal in office. They inherited the China FTA, they inherited the Japan FTA, and they couldn't do these deals because the unions said no. They said: 'No, you can't do those trade deals. We're not interested in more work, we're not interested in more investment; we're just interested in running an isolationist, closed-shop economy.' Labor had six years and they failed to do those two trade deals. Within 14 months of coming to office, we have been able to do trade deals with China, Japan and Korea, because we're not hung up on ideological concerns—like the Labor party is—about investor-state dispute settlement. The Department of Foreign Affairs said that Labor's trade policy at the last election would:
risk undermining a key element of our comprehensive strategic partnership and delaying the benefits of (the trade deal) to Australian farmers and businesses.
Our record is expanding the coverage of trade agreements from 26 per cent to 70 per cent, and we want to get to 90 per cent. In the last two weeks we've signed a new trade deal, known as the RCEP deal, and just last week the Senate passed new trade agreements with Indonesia, Peru and Hong Kong. So, while we're always looking to expand markets and to expand opportunities for Australian businesses to export into these markets, thereby creating new work, the Labor Party's record has been absolutely dismal. Everywhere you look, you see a smaller and smaller market with fewer and fewer opportunities for Australian workers.
Then we go to small business, where we have put in place practical measures to improve the opportunities for small business. In the area of government procurement, the Commonwealth now pays invoices within 30 days. But we want to do still better in this space. At the BCA dinner a few weeks ago, the PM said:
A recent example is our commitment to pay invoices to small businesses that use e-invoicing, not 20 days, within 5 business days, 5 business days. That’s where we are going now … Cash flow is king for any business – particularly small business – so this is an enormous incentive for small businesses to switch to e-invoicing.
We're also looking to award more small businesses with government contracts, and under our government, under the stewardship of Senator Cormann, the total value of Commonwealth contracts awarded to SMEs has gone from $12 billion in 2017-18 to $16 billion in 2018-19, which is a 29 per cent increase.
Overall, we're always trying to grow the pie. The Labor Party wants to talk about inequality, but a smaller pie which is cut up without being grown will always be a more unequal and less prosperous nation. That's why we've always been committed to tax cuts for small businesses and people—giving people back more of their money—and completing trade deals, like we have with a whole slew of nations. This has been a golden era in creating new exports for Australian companies. And we're also committed to better governance. We think that every organisation, be it a bank or a union, should be working for its constituents. We're not owned by anyone. Certainly we're not owned by unions or banks, unlike our opponents. We do think that the only way to grow the pie and to reduce inequality is to show a commitment to less tax, less regulation, ultimately a better market for Australian exporters, more trade and more investment. We're committed to the private economy doing well and creating more and more opportunities for small businesses and workers.