Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of answers given by the Minister for Finance (Senator Cormann) and the Minister representing the Prime Minister (Senator Brandis) to questions without notice asked today by Senator Urquhart and Senator Gallacher relating to taxation.

What a divided, visionless lot those opposite have shown themselves to be. They have proven they have no plans for the economic future of this country—no clue on tax reform and no idea that does not involve hitting the most vulnerable people in our communities.

Last week at the Treasurer's Press Club address, we found out that the government's highly-anticipated plan for tax reform consists of nothing but a big, blank page. We got 46 minutes of waffle and not one single policy proposal. This week we have seen Mr Turnbull channel his inner Tony Abbott with a hysterical and completely baseless scare campaign about Labor's proposal to save billions of dollars, to create jobs and to put home ownership back in reach for young Australians through moderate housing concession reforms. Honestly, I expected—as I know the Australian people did—better from the man who promised to lead a rational national debate that respected the intelligence of the Australian people.

The current system is not working. Negative gearing and capital gains concessions cost the federal budget more than $10 billion a year, and this is more than we spend on either higher education or child care. It is shameful. They are not increasing the supply of new housing, they are not creating jobs and they are not boosting construction. They are certainly not helping young people to buy their first homes. Not only that, but half of all negative gearing benefits go to those in the top 20 per cent of income earners and 70 per cent of the capital gains tax discount is used by the top 10 per cent of income earners. Despite the hysterical rantings of those opposite, these facts are indisputable. Clearly, something needs to change.

The Liberals do not want to see it become easier for young Australians to compete on a level playing field with investors to buy their first home. Instead, as we found out yesterday, the Liberals are planning on going after the nest eggs of Australian retirees by reducing capital gain concessions on superannuation. We did not find this out from the Treasurer, we did not find out from the Minister for Finance and we certainly did not find it out from the Prime Minister. In fact, the Prime Minister himself ruled out any changes to capital gains tax in question time yesterday. On this matter, the Prime Minister was very clear when he said:

I can say to the honourable member opposite that increasing capital gains tax is no part of our thinking whatsoever.

Despite this clear and unequivocal statement from Mr Turnbull, a few hours later we learnt that it was not true.

In fact, senior Liberals soon briefed media outlets that halving the capital gains tax discount on superannuation was very much part of the government's plan. It is no small issue to mislead the parliament and it is especially concerning for the person who holds the highest office in the land. It is either a matter of competence—did the Prime Minister truly not know what was going on as his own inner circle hatched plans to plunder the retirement incomes of older Australians?—or, alternatively, it is a matter of character and integrity—did the Prime Minister knowingly mislead the parliament? Either way, it points to a very serious issue of trust.

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

On a point of order, Mr Deputy President. That is plainly a reflection on the Prime Minister by innuendo.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Senator Urquhart, any adverse reflection on a member of the other place is in fact disorderly. I would ask you to keep that in mind for the rest of your contribution, to which I will be listening carefully.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy President. So the Australian people have every right to ask themselves just what does our Prime Minister stand for. When he arrived, people thought he would back in marriage equality, fight for meaningful action on climate change and support increased investment in science and innovation. Since then we have seen no change. Marriage equality is further away than it was under Mr Abbott, our climate targets put us at the back of the pack and the CSIRO are laying off scientists, and now, it seems, the Liberals have absolutely no plan for tax reform in this country that does not involve a great big tax that would hit those on low incomes the hardest and a plan to plunder the nest eggs of Australian retirees.

So what options do remain on the table? Will the government continue to go after retirees' nest eggs? It is time for Mr Turnbull to come clean with the Australian people about what the Liberals' real plans for tax are. (Time expired)

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Senator Urquhart talks about affordable housing. How soon we forget! I have not forgotten the days of the so-called world's greatest Treasurer, the days of Mr Keating, when I was paying a 25.25 per cent interest rate. Many Australians had 17 per cent home loans. Lucky they were regulated—they could have been 25 per cent as well. We talk about investment, and we discussed it recently especially in relation to buying farms. On 1 January 2013, the Labor Party brought in a regulation about investment. If you earned more than $250,000 a year, gross—your wage, in our case our travel allowance, and superannuation—and you bought a business it was not tax-deductible but if you bought a house it was. If any one of the 226 politicians in this building went and bought a house, they could get a tax deduction for. But if anybody wanted to buy a farm, no, they did not want that—let the foreigners buy them. I discovered this the hard way—

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I rise on a point of order on relevance to the questions asked.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I am getting to it.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

He is getting to it. I draw the chair's attention to his comments.

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

Mr Deputy President, on the point of order: the motion is not that we take note of questions; we take note of answers. The answers canvassed the issues raised in Senator Williams's speech.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

And also, as senators contribute to the debate, generally information is added, and that brings it within order.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Those opposite have a plan to take to the people of Australia at the next election—they have a plan to raise taxes, to bring in a carbon tax or an emissions trading scheme. I wonder what that will do for costs in the cement industry, the brick industry, the timber industry and the building industry as a whole?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Even Senator Brandis is struggling to see the relevance of this.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I think even Senator Conroy would realise that. I know he is a climate change sceptic—I think he is, anyway. So housing affordability means let's go to the next election with a plan to put a tax on everything in our building industry. How is that go to make houses cheaper? How are people in the cities ever going to afford a house? That is why I keep telling them to come out to the country towns—$250,000 will buy a lovely three-bedroom, brick veneer home in a nice area where I am fortunate enough to live, in Inverell in northern New South Wales. It is a real problem. When it comes to affordability and tax, those opposite have one plan—raise taxes and spend more. What have they announced so far? About $8 billion worth of increases in taxes and some $26 billion or $30 billion of extra spending. So tax more but spend even more to bring the budget further into the red and mortgage our children's futures away.

I do not know when the election will be—it might be sooner than we expect, though it is due in August-September-October, as the Prime Minister has pointed out. It may be sooner depending on some bills that come to this place. Those opposite, in the Labor Party and the Greens, will oppose the ABCC legislation because they want to look after the CFMEU and see that they are protected while they disrupt the building industry. When the election comes we will get back to this whole issue of taxation and our plans for the future of Australia. Our plans will be spelt out and costed—there is no doubt about that. We will keep continuing to try and clean up the financial mess we inherited.

If you go back to 2008-09, we had a huge terms of trade surplus. Iron ore was worth a fortune, coal was worth a fortune and we were exporting huge surpluses each month. The government was raking in a fortune in taxes from those big companies. But of course they spent more than they brought in and the debt continued to grow and grow. And that was during good times. If we do not think the good times have gone, the loss announced by BHP today is enough to scare everyone—a $5.7 billion loss. That indicates exactly how the resources sector is going and how tough the budget will be. Of course those in the Labor Party and the Greens will oppose us getting the budget in order. They have even opposed their own savings plan in this place. Labor opposed some $6 billion worth of budget cuts that they had planned to make themselves. When we won government, they opposed them. We will see it all come out before the election, and hopefully that will be sooner rather than later.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make a contribution in this debate on the motion that the Senate take note of the answers given by Senator Cormann and Senator Brandis. At the outset, it is important that the facts here are on the table. Revenue for 2015-16 is expected to be $405.4 billion—an increase of 5.5 per cent of the estimated revenue of 2014-15. Total expenses for 2015-16 are expected to be $434.5 billion, an increase of 3.4 per cent on estimated expenses in 2014-15. It is important that those figures be on the table.

It is also important to understand where those amounts of money come from. Forty-seven-odd per cent, or $194.3 billion, comes from PAYE taxpayers Company and resource rent taxes account for about 17.6 per cent of that revenue. Sales taxes, GST and the like represent 15.2 per cent, fuel excise is 4.4 per cent and there are a lot of other much smaller items. The picture is very clear. Through the finance minister, we are asking the Treasurer the specific question: what is in his thinking? The answer that is coming back is prevarication, with no clear vision and no clear, authoritative response to the questions we are legitimately asking. In the interview that the Treasurer did on 3AW on 19 February 2016, Mr Mitchell, the interviewer, said:

… I am looking for this vision that I heard about five months ago. Is this a five year vision or a six months vision?

The Treasurer's response was:

Our vision is of an economy that is innovative, modern for the 21st century, one where people are paying less tax over time, not more tax over time, where the economy is not run by the tax and spend higher tax club who seem to think the answer to every prayer is to raise a tax. When you hear Labor saying they have announced policies all they have done is announce higher taxes fuelling higher spending.

I am still waiting for the clarity that a Treasurer, a few months out from a budget, should have in his mind. He should know what he is going to address. Is he going to address bracket creep, if that is an economic deterrent? If 48 per cent of the revenue raised is from individuals' PAYE tax earnings and bracket creep is going to be drag on GDP, how is he going to address that? If company taxes are a drain on employment—if they are causing employers not to employ enough people—how is he going to address that? Is he looking at capital gains tax? Is he looking at negative gearing?

He has ruled out changes to the GST, but I might say this: one other very famous Liberal Prime Minister ruled out the GST, saying it was dead, gone and never to be reinstated. Four years later, he actually prosecuted the case and got it in place. The GST is the area that the Liberal government will come back to. They have ruled it out for now because the focus groups tell them it is not popular, but they have to go back to it. You cannot get any more out of the workers. You will not get any more out of the companies. The next biggest item is a 15 per cent GST. They walked away from it because they are gutless. They walk away from anything. This Prime Minister walks away from anything that threatens his position in the Lodge and anything that requires real conviction, real prosecution and real arguing of the case. Negative gearing, capital gains tax and the GST—they walked away from all those debates.

So what are they going to do in the budget? Will they even have a budget? Will they just say, 'Look, let's go the polls before the budget because we can't actually construct a rational, logical view to take to the electorate. We'll just blame the ABCC or the CFMEU for all the woes in Australia—bag it all up and say it's the Labor Party's problem and the crossbenchers' problem. They are why we can't be the government we want to be.' And they will not even address the fact that they do not have the intestinal fortitude to articulate their case in a clear and unequivocal manner in all of the forums that are available to them while they are in government. They are prevaricating. It is embarrassing that Senator Cormann—he of the 'cigar and glass of wine' fame—on the best day of his life, the 2014 budget(Time expired)

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

'There will be no carbon tax under any government I lead.' I remind Senator Gallacher, through you Mr Deputy President, that to start quoting Liberal prime ministers of the past will come home to bite him, and come home it did. I also congratulate Senate Gallacher on very accurately and astutely quoting the Treasurer of this country's vision. What is a vision? A vision is where you see the country being in the long term. Then, from that vision, you work backwards. You work through strategies, you work through tactics, you work through consultation, you work through the whole process and you deliver your vision over time. I have to say that Senator Brandis and, indeed, Senator Cormann exercised a high degree of grace and courtesy in their responses to the question by Senators Urquhart and Gallacher, because the answers could have been given very shortly and, needless to say, they were that the government is not changing the 50 per cent CGT discount for individuals. They could have just said that and then sat down.

It is amazing. I heard in this place from Labor senators today reference to changes to negative gearing. And what do you think came across my mind? It was the live export trade, where that crowd, in government, with reference to nobody and against the advice of a Liberal senator who actually knew something about the trade, came in overnight and cut the guts out of the live export trade—and they now plan to do it, if they have their way, which they will not, with negative gearing. What would we see if Labor policies were introduced for negative gearing? We would see one-third, 33 per cent, of the housing market immediately dissipate. It would not be the eight or 10 per cent that happened to the cattle industry in the live export trade; it would be more than one-third. We hear about the white-shoe brigade from Senator Cameron. Was he talking about Senator O'Neill, an investor in negative gearing? Was he talking about me? I am not a member of the white-shoe brigade, but I certainly am a participant in negative gearing, let me assure you. I challenge the Labor Party to go out there—

Honourable Senators:

Honourable senators interjecting—

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Senator Back, I was actually going to ask you to resume your seat so that I could bring the Senate to order, but Senator Conroy is looking to raise a point of order.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

On a point of order, I think, when there is a clear conflict of interest being declared like that, it is only incumbent on the good senator to declare how many homes he has negatively geared.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

There is no point of order.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

There is no point of order, and there is no conflict either. This is a convergence of interests, because I am like many other Australians, like many on the Labor side, who have the common sense to avail themselves of the opportunities that are available to them through the taxation system in this country—as many on your side do.

Senator Conroy—through you, Mr Deputy President—do you know what happens when you invest wisely over time in negatively geared property? It actually becomes positively geared. We have positively geared investments, and they contribute to the Australian tax system. Isn't that an amazing notion for the shadow minister—that negatively geared property could in fact become positively geared and become a positive contributor!

There is a very clear distinction between this government and the other mob when they were in government. We have heard Senator Cormann say that all our policies are associated with cutting tax for small business, free trade agreements which are now stimulating so much export income in the services and in the commodity sectors, and the $50 billion infrastructure fund. There is an allegation and accusation that we are not rushing into things. What did Labor do in government? You rushed into the 'Gillard memorial halls', many of which are now falling down. You rushed into pink batts, and we all know the outcome there. You rushed into the $900 and the $1,200 cheques that largely ended up in poker machines, alcohol and drugs. Go and ask the people who work in accident and emergency departments of hospitals where those moneys went.

This government will not be rushing into its final decisions associated with policy development. There is a budget coming up in May. It will be presented on the basis of careful thought, careful consideration, of the implications—not the pink batts analogy but on the basis of clear and careful persuasion—which will be of the greatest benefit and, as Senator Cormann said, to develop strength in our economy and more jobs in a fair fashion.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to take note of answers given by Senator Cormann and Senator Brandis to questions asked by Labor regarding taxation. It is really hard to keep up with the daily flip-flopping of the Turnbull government. Its approach to tax has been nothing short of shambolic. Look at the rhetoric and rubbish we have heard from those opposite today. They must think that, if they yell really loudly, suddenly that makes it all right or that it is so loud we cannot hear anything. We heard ancient history from the Nationals in relation to tax, and do you know why that is? Because they have absolutely nothing to say—nothing to say.

The government are busily contradicting themselves all over the place—left, right, centre. They have no idea what is going on in terms of tax, and we have caught them napping. When Labor came out with its very sensible negative gearing policy, they were caught napping, because they have nothing left in their tax portfolio because one minister or another has ruled it out, although some have ruled things back in. But those opposite, the members of the Turnbull government, seriously think the Australian dream is to negatively gear your seventh house! Labor knows that actually the dream is being able to afford your first house. Sure, Senator Back might go on and on about those who negatively gear, and I put it on the record here today that I am one of them. But that does not mean that I do not think the system needs change. Of course it needs change. I am certainly more than willing to pay my fair share of tax and I do not resile from that. I want to see housing at an affordable level in this country. But those opposite do not see that. As usual, they are looking after the big end of town.

The best we have heard from the Treasurer was talk about unicorns! That is really what we heard from the Treasurer. Yesterday we saw Mr Abbott—sorry, Mr Turnbull, the Prime Minister. Actually, they are interchangeable these days, so who would know? Mr Turnbull was channelling his inner Mr Abbott, as within just 48 hours we saw the government consider making the superannuation guarantee an opt-out for low-income Australians, and then, last night, reports revealed the government has a secret plan to halve the current 33 per cent capital gains tax discount for super funds.

This latest leak comes after the Prime Minister yesterday in question time channelled his inner Mr Abbott and attacked our policy—Labor's sensible policy—of halving the capital gains tax discount for individuals and trusts. What Mr Turnbull said in question time yesterday was:

… I can say to the honourable member opposite that increasing capital gains tax is no part of our thinking whatsoever.

That is what is in the Hansard. He cannot get away from that statement. It is clear as anything: it is no part of their thinking whatsoever. But what happened then? Senator Cormann quickly came to the Prime Minister's defence, when he said:

… the Prime Minister never just makes comments on the fly, there are very carefully considered judgments …

Well, they caught everyone out, because later on yesterday afternoon we had the bizarre occurrence of the Prime Minister's office—his own office—briefing newspapers that, despite Mr Turnbull's declaration on capital gains tax, the government was in fact looking at options to change the capital gains tax. Australians are not fooled by this, and voters have quite rightly started to see Mr Turnbull in his true light, as he channels Mr Abbott.

What happened yesterday was, again, an attack on workers by the Turnbull government. They have done a lot of things to hurt workers. They want to scrap penalty rates, they froze the super benefits for workers with the help of the crossbenches and they took away the superannuation low-income guarantee. So you have to wonder, when the Prime Minister is contradicted not just by his own ministers but by his own office: is he going to be replaced? Seriously, is he going to be the Prime Minister that leads us to the next election? Who would know. (Time expired)

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

On the same matter, Senator Ludlam?

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

Who can tell, Mr Deputy President? I rise to take note of answers given by Senator Cormann on the question of housing affordability.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Asked by the opposition?

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

If you consider us as such, then yes. I asked a question to Senator Cormann on housing affordability.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

That is not the question that is before the chair, so it is not the same matter.

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I seek leave to take note on another matter.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

You do not need leave. I will put the other resolution first. The question is that the motion moved by Senator Urquhart be agreed to.

Question agreed to.

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I rise to take note of answers provided by Senator Cormann to questions I asked him in his capacity as finance minister. It is impossible to tell, amidst this headless monster that the government has become on matters of tax policy, exactly who is driving the bus and who is in charge. But one thing is very clear: this government has no interest whatsoever in housing affordability. It is not even a kind of benign neglect; it is hostility. They are approaching government with a scorched-earth approach, where they have burnt to the ground everything that the previous government had put in place. Peak body funding for groups like Homelessness Australia, the National Rental Affordability Scheme, capital budgets for homeless and crisis support shelters—$44 million has been torched. It has disappeared and is not back in the budget.

This is the problem: there are more than 100,000 homeless people in this country right now. Forty-four thousand or so of them are young people and children. The greatest single cause of homelessness in this country right now is domestic violence. It is women—many of them with kids—fleeing homes that are too unsafe to remain in. That is the situation that faces 100,000 people. Roughly 10 per cent of those are sleeping rough in a doorway, in parks, or in completely transient accommodation—in cars.

Against that systematic, malign neglect of these 100,000 Australians who have nowhere to go, we have, over the forward estimates, Parliamentary Budget Office estimates of $22 billion worth of incentives for property speculators—people buying their first, second and third investment properties. These are people like Senator Mathias Cormann, who has two residences and two investment properties; people like the foreign minister, Ms Bishop, who has two residences and three investment properties—good on her; Senator Brandis, quite frugal—one residence, one investment property; Senator Fifield, one residence, two investment properties; Mr Turnbull, the Prime Minister of Australia, three residences and five investment properties. Good for you! How has that come about? What makes it so tax effective for property speculators to bid into the property market to start stacking up these properties? I should say that those figures I just quoted are from the register of interests that are a year or so old, so apologies if more purchases and acquisitions have been made, or if there are other changes in the record since we last looked.

I put this question to Senator Cormann not that long ago, and it is as though you get something back from a random-answer generator—you do not get anything even remotely comprehensible—to the question that you put to him. So here is what I would put to Senator Cormann. Consider these words: 'The build-up of investors out-competing homeowners leaves young Australians disenfranchised and locked out of the housing market.' Senator Cormann said that those were matters of opinion, not of fact. But that is a quote from the Reserve Bank of Australia's head of financial stability. So it is not just Moody's; it is not just Professor Eslake; it is not others across the housing sector and the housing affordability sector, people working on homelessness and people at the crisis end of the spectrum, saying that the $22 billion in incentives for property speculation are bidding up prices and locking people out of the market.

It makes me sick when I hear people in this place and the other place talking about how it is just supporting honest mums and dads. Well, mums and dads are renters as well. Mums and dads are homeless as well. When the front bench of the government come in here and pretend to simply be speaking for those mums and dads as honest property investors and quote blatantly misleading statistics from the Property Council and others, who say that some 840,000 Australians with taxable incomes below $80,000 are using negative gearing, they are very careful to always say 'taxable incomes'. Those taxable incomes are after deductions like negative gearing have been applied. It is a remarkable deception to then come in here and say they are just ordinary mums and dads, when, in fact, only 10 per cent of people earning a total income between $50,000 and $100,000 are claiming a net property loss. The fact is: the biggest winners from negative gearing and capital gains tax exemptions are the top end of town. They are the top 10 per cent of income earners—and you know it! Don't pretend you don't know it. The idea that you would push these massive incentives into the property market and then step back and say, 'It's not the role of the state to intervene in housing affordability,' is absolutely disgraceful. Thank goodness this debate in this country has finally arrived.

Question agreed to.