Paul Scarr (Queensland, Liberal Party) Share this | Hansard source

Greater deficits does not equal 'fully costed and fully funded'. No, Senator Steele-John, this is what the PBO is saying, not me. This is the PBO. In terms of the headline cash balance, this is what they say about the Australian Greens policies. The net impact of coalition election commitments is a positive $1.1 billion. The net impact of the Australian Labor Party's election commitments—headline cash balance—in that period, through the 2022-23 forward estimates, is negative $40.5 billion. The net impact of Greens election commitments is negative 112.1 billion Australian dollars—$112.1 billion! No wonder you didn't mention it, Senator Waters, in your contribution on this debate. That's out of the PBO's work, not mine.

Let's see what the PBO says about the super profits proposition. I am pleased that those opposite in government are not supporting this resolution. These aren't my words; this is the PBO. I've read their work carefully; I have a lot of respect for the PBO and pay tribute to everyone working in the PBO. This is what they say:

There is a very high degree of uncertainty associated with this costing.

I used to be company secretary and general counsel of an ASX listed company. If I put something out into the market and said it was totally costed and fully funded—when you've got $112 billion of community deficits, you've got the PBO talking about a high degree of uncertainty, and there's no safety warning in terms of the Greens' policy document—ASIC would be all over me like a rash. That's why we need truth in political advertising. The PBO says there is a very high degree of uncertainty associated with this costing.

Here's the other thing they say. This is a point which leads on to other observations:

Because do you know what happens when you increase taxes? The people who are investing in capital in this country, which provides jobs to Australians and provides markets to small businesses all over this country, consider their options. They consider their options. Can I tell you that in my previous role in the mining industry, one of my roles was to look at different jurisdictions and whether or not our company should invest in them. One of the things we looked at was the corporate tax rate. Companies have options. They don't have to invest here. They can invest in other countries.

Those in the Greens should consider—and I'm happy to lend it to them—what I'm going to quote from a book I've got, called Basic Economics. It's economics 101. I'll buy you all a copy. This is what it says:

When tax rates are raised 10 percent, it may be assumed by some—

namely the Greens—

that tax revenues will also rise by 10 percent. But in fact more people may move out of a heavily taxed jurisdiction, or buy less of a heavily taxed commodity, so that the revenues received can be disappointingly far below what was estimated.

Funny, that! People actually respond to higher tax rates. They'll invest in jurisdictions with lower tax rates. This has been the economic experience all over the world, from the United States to India to Iceland. I'll quote again from the text:

In Iceland, as the corporate tax rate was gradually reduced from 45 percent to 18 percent between 1991 and 2001—

I note the 18 per cent is higher than the OECD minimal amount which has been negotiated—

tax revenues tripled.

What happened to tax revenues? Did they fall? Did they fall proportionately when the tax rate went down from 45 per cent to 18 per cent? Is that what happened? No, they tripled. The tax revenues—which are paying for schools, for hospitals, for roads, for the mental health care which you talk about and which I care passionately about, and for dental care—tripled. The tax rates came down and the revenues tripled. That's the experience. That's basic economics—economics 101.

There is a deeper issue here, and it is an issue for a centre-right party such as mine and, indeed, for the Australian Labor Party. The deeper issue is this. When we go to elections and the Greens falsely and fraudulently claim that their policies were fully funded and fully costed—when that isn't the case because, if it were the case, you wouldn't have increasing deficits—they are saying to voters at the polling booths: 'You will get free dental care. You will get free mental health care. You will get free child care.' And, on the face of it, this sounds good. It's very tempting, but there ain't no such thing as a free lunch. The only question is: who pays? The introduction of a corporate super tax would drive investment offshore and drive jobs offshore, and people who were considering whether or not they should invest in Australia would take their money somewhere else, invest it there, and provide jobs and prosperity overseas.

I believe that both my party and the Australian Labor Party need to shine a brighter light on the ridiculous, fanciful Greens policies and the potentially disastrous economic consequences for this country. The Greens policies are summarised as 'totally funded, totally costed'. Yet, when you look at the PBO, when you go to the source documents, there is $112 billion of additional debt—