Tuesday, 5 September 2017
Matters of Public Importance
I inform the Senate that, at 8.30 am today, six proposals were received in accordance with standing order 75. The question of which proposal would be submitted to the Senate was determined by lot. As a result, I inform the Senate that the following letter has been received from Senator Gallagher:
Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:
The need for the Turnbull Government to provide economic leadership to make the tax system fairer, fix the budget in a fair way and address housing affordability.
Is the proposal supported?
More than the number of senators required by the standing orders having risen in their places—
I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.
I rise to speak on this matter of public importance, the need for the Turnbull government to provide economic leadership to make the tax system fairer, fix the budget in a fair way and address housing affordability. Australians look to their federal government to provide the economic leadership needed to address our current challenges, yet we see the Turnbull government letting Australians down. Whether it's budget management, energy policy, penalty rates or housing, we see a government with its priorities in all the wrong places.
I will address each of the three elements of the MPI. When it comes to making the tax system fairer, when it comes to the priorities of the government, it can't be clearer that their budget proposal to increase the Medicare levy is misguided. They claim it is to fully fund the NDIS but, let's be clear, when Labor was last in government it fully funded the NDIS. To be even clearer, a future Shorten Labor government will continue to fund the NDIS.
When it comes to the levy increase, it is dumbfounding that at a time of low wages growth, high cost-of-living pressures and the government already presiding over a cut in penalty rates for low- and middle-income workers the Treasurer is prioritising an income tax hike for those same workers. Mr Turnbull's tax increase means that a worker on $55,000 a year would pay $275 extra a year in tax, while someone on $80,000 would face an extra $400 in tax. A worker earning $85,000 a year would lose the full benefit of last year's 'sandwich and milkshake' tax cut and actually end up paying more in income tax. When it comes to multinationals paying tax, we see a government failing to take strong action to make the system fairer.
It's not fair on everyday Australians or on proper taxpaying companies that other companies can use sharp business practices to evade their proper share of tax. I have been looking into this matter in the Economics References Committee's corporate tax avoidance inquiry. Of the $4 billion in liabilities raised by the ATO, which the government loves to talk about, we see that it's actually Labor legislation that is being applied—legislation that the coalition voted against. There's more to do in terms of closing loopholes and increasing transparency, and I call on the Turnbull government to adopt Labor's multinationals tax policies to make the system fairer.
I also want to briefly mention the recent announcement by Labor to make sensible reforms to discretionary trusts. It shouldn't be the case that there is a two-tier tax system—one for ordinary Australians and a business class tax system that lets you minimise your obligations if you have a high income. There should be one system, one that's fair for everyone. A 30 per cent minimum tax rate on discretionary trust income splitting is a sensible move to make the tax system fairer.
When it comes to fixing the budget, let's also be clear: Labor understands that there is a need to fix the budget, not just over the forward estimates but over the medium term as well. In this term of parliament Labor has been very constructive when it comes to fair budget repair. Whether it was the measures in the omnibus bill or measures such as the bank levy, Labor has scrutinised the Turnbull government but worked constructively to repair the budget. You can also see from Labor's tax policies that we are strengthening the budget in the medium term. Negative gearing, capital gains tax and discretionary trust reforms all strengthen the budget in the medium term. And we're looking further ahead than are the government, who seem fixed on trying to make the numbers look good just over the forward estimates—when they're not preoccupied with themselves. When it comes to budget repair, priorities don't get much bigger than the company tax cut. It's now a $65 billion—not $50 billion—ramraid on the budget at a time when there could be more productive investments in areas such as infrastructure and education. When it comes to budget repair, you can't trust this government. Only this side of the chamber has a credible plan to properly repair the budget in a way that's fair and in a way that aligns with our values and priorities.
I will now turn to the very important matter of housing affordability. This issue just seems to be worsening, yet the government seems to be doing little on this matter. Even in recent times the Committee for Economic Development of Australia has raised concerns that affordability issues might persist for as long as 40 years. A survey by law firm Slater and Gordon found that 26 per cent of 16- to 24-year-olds need to rely on an inheritance from their parents before they can buy a home. Home ownership is getting out of reach. The HILDA survey shows that for couples with dependent children home ownership fell from 55.5 per cent in 2002 to 38.6 per cent in 2014. Home ownership rates have also collapsed for under-40s, from 35.7 per cent in 2002 to 25.2 per cent in 2014.
We also see the links between housing affordability and inequality. Again, the HILDA survey found that among men aged 18 to 39 homeowners earn $87,182 whereas non-homeowners earn $41,832. The reason young people aren't renting is not alleged lifestyle choices; they are being locked out of the market. And what do we see from the Turnbull government? We see a threadbare housing affordability policy announcement in the budget. We still haven't seen the legislation, and it's now September. The Treasurer does not seem to see it as a priority, yet Australians are entitled to information so that they can make an informed decision about whether to access it or not. The super scheme will do nothing to address housing affordability but will instead work to undermine Australia's world-class superannuation system, and Labor will not support it.
Labor has sensible policies to address housing affordability, including negative gearing and capital gains tax reform. That's well known. There are also other policies that the shadow Treasurer has announced, such as prohibiting direct borrowing by self-managed superannuation funds, the introduction of a uniform vacant property tax across all major cities, an increase of foreign investor fees and penalties, the establishment of a bond aggregator to increase investment in affordable housing, boosting homelessness support for vulnerable Australians and, importantly, getting better reform through housing agreements with the states. It's a comprehensive suite of policies that can meet the challenges Australians currently face.
When we're talking about tax, I can't miss the opportunity to once again bust the mythology that those opposite have that theirs is the party of low taxes and responsible spending. I am indebted to the research done by Stephen Koukoulas, who shone a spotlight on this matter. He showed that eight of the 10 years since 1980 with the highest level of tax-to-GDP ratio have been under coalition governments, and all 10 of the 10 years with the lowest tax-to-GDP ratio have been under Labor governments. That busts the mythology about those opposite being the party of low taxes. When it comes to responsible spending, the IMF working group busted that myth as well and showed that profligate spending occurred on two occasions under John Howard. In conclusion, the Turnbull government has let Australians down when it comes to— (Time expired)
I rise today to speak in response to the matter of public importance submitted to the Senate by our parliamentary colleague from the ACT Senator Gallagher. I am very pleased that Senator Gallagher has submitted this motion to the chamber because it gives me the chance to inform you of all the wonderful things that the Turnbull coalition government is delivering in taxation, budget repair and housing affordability. Senator Gallagher would like the chamber to consider:
The need for the Turnbull Government to provide economic leadership to make the tax system fairer, fix the budget in a fair way and address housing affordability.
I would be delighted to do so.
Senator Gallagher's motion has a number of parts, and I'd like to address each one of those in turn. Firstly, the senator brings up the alleged need for a fairer tax system. 'Fairer'—goodness me, that word comes up in this chamber an awful lot. I can hardly be the only one in here who is sick to death of the opportunism and insincerity coming out of Mr Shorten's Labor Party, centred on fairness and inequality. I apologise for my repetition, because repetition it is. It seems that, every time I rise to my feet, we are speaking on the same thing. I feel an enormous sense of deja vu when I once again call out this rhetoric for exactly what it is. It is a shroud for a radical redistributive agenda. As successive statistics repeatedly have proven, inequality is in fact falling in this country, not rising. Any claims to the contrary just don't stack up. Populist catchcries, however, are clearly on the rise.
The Australian Labor Party, under Mr Bill Shorten, is forgoing sensible economic policy for the base politics of envy and class warfare. History has condemned socialism for the economic nonsense that it is, yet Mr Shorten's Labor wishes to pursue it nonetheless. The Australian people, however, are smarter than that. Make no mistake: Labor's tax plan will freeze productivity, freeze economic growth, limit jobs growth and hold back wages growth. Mr Shorten should know better. As the recipient of a very high-quality Victorian education, one would imagine he would be well aware that a nation cannot tax its way to prosperity. Enterprise and hard work both need to be rewarded, not penalised, if we're to realise economic and wage growth for all Australians. It is indeed galling in the extreme that Senator Gallagher would blindly follow her leader into the empty rhetoric of redistribution and socialism. It is perhaps the case that voters in Ecuador might appreciate such political sensibilities but not here. Australians are smarter than that—so much smarter than that. Australians know that high taxes do not increase their wages. Labor's tax winter will penalise Australian families and whack small businesses. Quite simply, the worst thing that could happen for Australia's future economic prosperity is the election of a Shorten-led Labor government.
Senator Gallagher also called on this chamber to consider the need for the Turnbull government to fix the budget. The hypocrisy of those opposite on this issue is appalling. While in government, the Australian Labor Party were more than happy to rob future generations of Australians by running up enormous debt with unsustainable levels of expenditure. Now, in opposition, they block sensible measures to return the budget to surplus. Where the incoming Labor Party government under Rudd inherited a budget surplus from their predecessor, this government inherited baked-in spending and a structural deficit. It is patently ludicrous for any member of the Labor Party to attempt to use a matter of public importance to lecture the coalition on budget repair.
The Turnbull coalition government is acting to curb the insidious growth of federal government expenditure by passing the omnibus savings bills and providing substantial budget savings in the areas of education, social security and many more. While we can agree that more can be done and more must be done to finally return the budget to surplus and pay down the debt we inherited from the previous Labor government, we on the government side are doing everything within our power to do so while those opposite politically obfuscate to block measures that would have saved billions of dollars to the budget bottom line. How rich it is that Senator Gallagher and her colleagues would lecture those of us on this side of the chamber on the need to pay down debt. It is simply extraordinary.
Finally, Senator Gallagher has called on the government to address housing affordability. I'm not entirely sure where those opposite have been, because it gives me great pleasure to inform the chamber that much is being done by this government right now to address housing affordability. This is a government that recognises that housing affordability is a vital issue for many millions of Australians, and we are seeking to address it where we can, how we can and when we can. Very recently, crown land in the great city of Maribyrnong, Mr Bill Shorten's own seat, was released, which will enable the construction of thousands of new homes. Indeed, in the other place, in this very sitting period, we will see the introduction of two measures spoken about in the budget that will combat housing unaffordability. The government will pass the first home buyers super scheme, announced by the Treasurer on budget night, which will allow individuals to make voluntary contributions of up to $15,000 per year and $30,000 in total to their superannuation account to purchase a first home. These concessional contributions are taxed at only 15 per cent and can be withdrawn along with attributed earnings to make a deposit on a home. For most people this will boost the savings they can put towards a deposit by at least 30 per cent compared to savings in a regular savings account. Additionally, the government will pass a measure which will allow people aged 65 and over to make an exempt non-concessional superannuation contribution of up to $300,000 after selling their main residence of the last 10 years. This increased flexibility to contribute proceeds to superannuation will reduce barriers of older Australians to downsize homes that no longer meet their demands and, importantly, help free up housing stock for younger, growing families. This is a government that wants to do all it can to fairly—and I use that word without empty rhetoric—assist younger Australians to get into the houses they need.
It should be painfully apparent to those watching that the Turnbull government is providing the economic leadership in the fields of tax reform, budget repair and housing. (Time expired)
We can walk and chew gum. Here's the oil: we can actually make this society and economy fairer, we can help fix the housing affordability crisis and we can take some of the pressures out of the financial system by doing a few simple things. We could actually do it this week if the government had the guts to bring forward some decent legislation.
We talk about socialism, capitalism and everything in between. At the end of the day, it's ironic that what's causing the housing affordability crisis in this country—and inequality—is the market system itself, and the perversion of that market system by governments, successive Labor and Liberal governments, who have put in place investor subsidies and perverse incentives that allow investors to go into the market and get taxpayer deductions for buying real estate and building their wealth.
We know that investors are the problem in our housing market, especially in Sydney, Melbourne, Perth and Brisbane. They get tax deductions on their capital gains when they sell a property, which of course makes it more profitable for them. They get to claim, through negative gearing, expenses—especially interest expenses—against their rental income. We all know this. Both these policies were put in place a long time ago to help stimulate the real estate market, and of course the real estate industry loved that. Mostly older Australians who have built their nest eggs have been able to invest in property and do well out of it, thank you very much.
The HILDA Survey recently showed how stark the picture is in this country, where younger Australians and lower-income Australians are facing a housing affordability crisis. In some categories, their homeownership levels have fallen by over 30 per cent since the last five-year survey was done. That's how bad it's got in this country. But it's also about financial risks in the system.
I had to recently get in my bathtub at home and have a bubble bath, with a beer, and do a video to promote this particular issue. Yes, after we had a very good—
Honourable senators interjecting—
It's a shameless plug for a very serious issue. And my dog was involved with it as well! Just to get Senator Bernardi's interest in this particular debate, my dog was in the bath with me! This is an issue that the Greens have taken very seriously, every estimates. Let me go back to two years ago, when I took over the Greens Treasury portfolio and we put the issue to the Treasury secretary at the time: 'What are you doing about housing affordability? What's the holistic approach? What's the package?' It was directionless—aimless. This government, if it is doing anything now, has been dragged kicking and screaming to this issue by the Greens, and recently by Labor, who jumped on the bandwagon with negative gearing changes and, hopefully, also, capital gains tax concessions. It's simple: let's get rid of these investor subsidies that are allowing investors to outcompete first home owners in our heated markets, especially in Sydney and Melbourne. We know we can do that over time, we can grandfather it or we can go for a more radical approach of removing them immediately.
You want to talk about other money that's sitting out there, Mr Acting Deputy President Sterle? There's your home state of Western Australia. We have recently heard about the WAxit debate from the secessionists in the Liberal Party there who want to form their own country. Good luck with that! They complain about GST revenue, but what about the $238 billion—I will say it again: $238 billion—in tax deductions that the wealthiest oil and gas companies in the world have been given through the petroleum resource rent tax deductions? Two hundred and thirty-eight billion dollars—that's money that we could use for schools and hospitals, for fairness in this country, and it could underwrite some really good economic policies.
So there are plenty of places we could look to to raise revenue to help make Australia fairer, but we just need the political courage to do that. And it's actually not that hard. We've been campaigning on these issues now for many, many years—and I'm glad that the Labor Party have become more progressive in recent times. Whether you call them socialists or not doesn't bother me. If all of us in here are focused on getting good outcomes for the Australian people, on tackling inequality and on having a fairer country then I think that's a good thing and you're to be congratulated on it. (Time expired)
I've got to say I don't think that was the smartest speech I've ever heard from Senator Whish-Wilson, especially when Senator Bernardi is waiting to come on next. Talking about dogs in the bubble bath, talking about having a beer in the bubble bath, probably wasn't your best move, Senator Whish-Wilson. But, anyway, that's up to you. I want to try to get back to some of the serious issues.
The issue we saw reported today in The Australian was Senator Ian Macdonald going to the coalition party room and complaining about the government's dire position in the opinion polls. What he said was: if the government are going so well with their economic policies, why are the polls so bad for the government? That is something that I think the government should actually try and think about. I can tell them why they are going so badly—because inequality is increasing. Anyone listening to Senator Hume would wonder what planet she lived on. She was in here saying that there is no inequality, that inequality is not getting worse; it is not a problem. You go to any shopping centre and people will tell you what they're complaining about. They're complaining about power prices. They're complaining about power prices because this mob, this rabble of a government, can't get their act together even to deal with the recommendations they got from the Finkel report. They put the Chief Scientist up and say, 'Tell us what to do?' Then they adopt every recommendation except the key recommendation, and that is to have a clean energy target that would put a price in place to make sure that people would invest in electricity generation in this country. We now hear them talking about rebuilding Liddell power station. I was a fitter at Liddell power station for over seven years. Even when I was there, which is a long time ago, trying to deal with some of the issues that were starting to appear then, after 10 years of operation, kept a lot of maintenance fitters pretty busy, a lot of boilermakers pretty busy. Now they're talking about extending the life of a power station that's nearly 50 years old. I don't know how the government can even contemplate being seen as economically viable by the community; they're just not.
Senator Hume said she was going to talk about all the wonderful things that the coalition were doing. Senator Macdonald has basically given the game away. Whatever they're doing isn't working. Senator Hume, whatever you're doing is not working. Inequality is increasing. Workers are doing it tough out there. People are having big problems trying to make ends meet. Fairness and inequality are something Labor have been talking about and dealing with ever since we were formed as a party. We hear all the rhetoric about envy and class warfare. It's not class warfare to say that everybody should get a fair go. It's not class warfare to say that workers' penalty rates should be protected. It's not class warfare to say that workers should be able to send their kids out to school with shoes on their feet and put food on the table when they come home from school. That's not class warfare.
With the nonsense we've heard from this coalition, it's no wonder Senator Bernardi jumped ship. It's no wonder he got out, no wonder he said, 'I can't put up with these fools anymore.' True, isn't it? Yes, Senator Bernardi. Thanks for nodding. That is exactly what Senator Bernardi did. He knew this mob were going down the tube, he knew that they had absolutely no chance at the next election, so he said: 'I'll cut and run. I'll get out and I'll make sure I can get back in here.' There are a lot over on that other side who won't be back. Anyone listening to Senator Hume telling us that inequality is not a problem and everything is going great under the Turnbull government would know that it's an absolute farce from a rabble of a government that just can't put one foot in front of the other. Every time they make an announcement, they have to change it next time around. Do you remember Prime Minister Turnbull saying that he was going to bring in all of these great changes? His first economic issue was to put in a 15 per cent GST. Remember that? How long did that last? I think it lasted about six weeks and then he retreated as fast as he could. The next economic thing that was going to be put in place was the states being allowed to tax. Taxation powers would be given to the states. I think that lasted about two days. Then the next big economic approach that the government was going to take was put in a big tax cut—a $65 billion tax cut—including for the banks that Senator Williams had been complaining were ripping off workers, ripping off people, day in and day out. Give them $65 billion: $7 billion to the banks and the rest to multinational corporations. This is just a nonsense. No wonder the community can't see any hope in Malcolm Turnbull. No wonder the community won't change, even if he puts on a new leather jacket—not that one from the seventies. He could put on a new leather jacket and that would mean nothing.
This is a government that has lost the plot. This is a government that cannot understand the challenges that ordinary working people in this country are facing. It is only Labor that are going to deal with housing affordability. Their policy was described as one where you would need an electron microscope to see any difference it would make to housing. Senator Bernardi, you did the right thing. You cut and run. You got out. Well done. (Time expired)
We talk about fairness, we talk about jobs and we talk about the cost of housing affordability and the budget. I have said it before and I will say it again: why are houses so expensive, especially in Sydney and Melbourne? It is the simple case of demand exceeding supply; it is as simple as that. What is the cost? The cost is the land. The land is the cost. When they pull down the old house—they pay $2 million for a little wooden house and then pull it down—they put up a $2 million home. Land is so scarce. Yet, what do we have in this country? What do we have more per capita than any other country on the planet? We have land.
We keep saying: move out to country areas. Where I live in the beautiful town of Inverell there is an ample supply of water. We never have water restrictions. It is very good value. I think it is still about a dollar for 1,000 litres. Use as much as you like. Even in a drought, we never have water restrictions. You can walk into Inverell and into many other country towns—there are nice country towns in New South Wales, as I imagine there are in every other state in Australia—and for $275,000 or $300,000 you can buy a three-bedroom brick veneer home on about a 600, 700 or 800 square metre block. That is not expensive. But the first thing people say is: 'Where are the jobs?' Where I live, we are lucky to have Bindaree Beef, a large abattoir, which employs 800 people. We have unemployment—we have too much unemployment; it's too high—but we can't get workers to work at the abattoirs. We have to bring them in from Brazil, the Philippines—you name it. The jobs are there. What I am saying is that, if I was a young fellow—and I only wish that I was 25 years old—who lived in a city and I had a basic job, I wasn't well educated, I didn't have a tertiary education, I wasn't a specialist and I had never had an apprenticeship—I wasn't a fitter and turner, a mechanic, a plumber or a tradie or in some other specialised field—I would move to a country area, because I know that if I go out there I will get a job. If I am prepared to work, I will get a job. I have never seen a situation yet where someone who tries and tries to get a job does not get a job. If you persist, try hard and have a good work ethic, you will always get a job. It mightn't be the best job, but it will be a job.
I am simply saying that we need to move more people out to country areas, and we are getting condemned for it. Barnaby Joyce moving the APVMA from Canberra to Armidale is making room in the city here. Housing is expensive in Canberra. I'm sure those of you who've bought houses here would be well aware of it. I haven't bought a house here. We're trying to make more room, yet we're getting condemned for doing exactly that.
Senator McAllister interjecting—
Exactly. The point I make is: we have plenty of land in this country; why don't we use some? I'm sure where Senator Dodson comes from there's stacks of land, heaps of room. Why we insist on stacking people into the cities, especially Sydney and Melbourne, is beyond me.
I want to talk about fairness, equality and the cost of living. Electricity prices are too high. State and federal governments of all persuasions have made mistakes in this field for a long time. Coal is the cheapest way to generate electricity—there is no question about that. In a motion before the Senate earlier today, the Greens and the Labor Party voted against coal once again. I don't know how the CFMEU support this mob. You don't support their industries, yet they back you financially all the time. Those opposite say, 'We can't build coal-fired generation in Australia, because we're going to change the CO2 levels around the world; we're going to save the planet.' As I speak to you now, 621 units of coal-fired power generation are being constructed. A unit is one generator. If you go out to Liddell or Bayswater in the Hunter Valley, you'll see the four big cement cooling towers with the water vapour coming out of the top. They are four-unit power stations, and 621 units of coal-fired generation are being constructed around the world, as I speak—299 in China, to add to the 2,100 units they already have. Those extra 299 units will produce more CO2—670 million tonnes, in fact—than the whole of Australia produces. These are the additional coal-fired generators being produced in China. There are some 120 in India and even 34 in Vietnam. Australia has just 73 units of coal-fired generation. Are we building any more? Not as yet, but we're going to have to, because it's getting too expensive, and coal is the cheapest way to generate electricity. We know that labour costs are expensive in Australia compared to many other countries. If we want to remain competitive, electricity is one cost we need to keep down.
Speaking of equality, John Laws is a person I've listened to on radio for probably 40 years. In the shearing shed, on the tractor, in the sheep yards, my late father, Reg, my brother, Peter, and I would be drenching or jetting a mob of sheep, and we'd listen to John Laws. He said for years, 'You don't make the poor wealthy by making the wealthy poor.' How true that is! Someone has to have money to create jobs, to invest, to kick off the factories, to employ the people. That's what the wealthy people do. They don't just sit it in a bank and live on it forever; the people with money, a good business initiative and the interest to have a go are rewarded for their great work, smart thinking and investment. That's what the country is about. Making them poor will not create more jobs; it will create fewer jobs. That's why we've reduced tax for small business, to give small business a go to actually grow.
This whole debate is about jobs. Let's look at the facts. Today's figures show that total employment rose by 27,900 in July to a record high of 12.2 million. We now have 12.2 million Australians working. In the past 12 months, 239,300 new jobs have been created, three times as many as in Labor's last year in government. Of those, 197,700 were full-time. Of the nearly 240,000 jobs created in the last 12 months, almost 200,000 were full-time. In the last seven months, full-time employment has increased by 153,200, the largest increase in full-time employment over the first seven months of a calendar year since 2008. Female employment has increased by 124,600 over the past 12 months, to a record of high of 5.677 million women now in the workforce. Isn't that great? Youth unemployment has fallen by 0.4 percentage points over the past 12 months. So the jobs are being created. The unemployment rate was 5.6 per cent, down from last month's revised figure of 5.7 per cent. The annual rate of employment growth of two per cent is well above the decade's average rate of 1.6 per cent. The jobs are being created—as I said, 240,000 in the past 12 months, three times as many as in Labor's last year in government. This debate put forward by Labor is about jobs. We have the record for the increase in jobs. The record's there and the facts are there to prove it.
In winding up can I say that one good thing I am proud and pleased about is the free trade agreements we've made and how rural Australia is looking so positive. Even the grain prices are good, along with the cattle prices, the wool prices, the mutton prices and the lamb prices, and the cotton jobs are going well, and many others. Jobs are available in regional areas. If you can't afford to buy a house in the city, move out to a country town. Put your head down—you'll get a job, you'll do well for yourself and you'll be most welcome and will fit into those country communities.
Governments of all persuasions in the last 10 years have not done a service to our country. By whatever metric you want to balance it, you will find that the Australian people are being disadvantaged. When they talk about tax reform in this place, make no mistake, I say to the good people of Australia, that they are talking about putting your taxes up. It has zero to do with making your taxes lower or reducing your cost of living. What they are looking to do is to get more of your money to pay for more programs to try and fix the problems they've created from their previous programs and ideology that goes with it. It's an extraordinary assessment and indictment of where we are in politics today.
If you want to have a fairer tax system, you will lower taxes. Lowering taxes will mean there is less incentive for people to try and avoid them through complicated schemes or through negative gearing. You will encourage a greater proportion of the population to actually pay some tax. About half the Australian people get more in benefits than they pay in taxation. It is not because there are no jobs out there. It is because we are incentivising people to do the wrong thing. This is what leadership is all about: determining that government is too big, too cumbersome, too expensive. It is not the cure to the problems that we face. It is the problem that we face.
If you want any further indication of that, you have to examine the electricity market in this country. It is a debacle. Every single issue related to it is caused by government regulation, government intervention and government involvement. They will not acknowledge that. They still cook up schemes to try and fix the problems they've created, and it is making it worse. If you want fairer, simpler taxes, if you want fairer, simpler government, you need to vote for the Australian Conservatives.
I'd like to make a contribution to this debate. I think we have to start from the very beginning. When this Prime Minister went to the last election, he promised that he would be delivering leadership. He promised at the election that there would be an agile, innovative and adult government. We're still waiting for that to emerge. The Prime Minister wants credit for just saying that things are going to happen when, in fact, this is just rhetoric. It's fine to say that, but what the Australian people are looking for is leadership. They are looking for the leadership that was promised to them by this Prime Minister, but he has failed. He has failed miserably in being able to bring any solutions when it comes to the inequality in this country, when it comes to stimulating the economy, when it comes to creating full-time jobs. It's alright to come in here, as Senator Williams has, and quote the figures, but what we are seeing out in regional and rural Australia is very different to what is really being delivered by this government.
What we do know from this Prime Minister, though, is that he looks after his mates. He looks after the top end of town. But if you want to look for a future government that is actually going to deliver in terms of changes and real reforms around taxation, about making housing affordable for young Australians and young families trying to get their foothold into the housing market, that will be a Shorten Labor government. We have already been out there talking about negative gearing and the changes that need to happen in relation to capital gains tax. We have put this out for the community so they will know well in advance what our economic policies are going to deliver for their futures, and for those families trying to get into the housing market. This government is paralysed by the dysfunction that we see day by day in this place, and that the Australian people see. And it's not just me saying that. I won't do what Senator Abetz normally does and say 'Guess who says this?'—I will quote from a newspaper report of the Liberal-National Party caucus meeting this morning:
Malcolm Turnbull has fended off a backbench complaint about the government’s dire position in the opinion polls in the wake of this week’s Newspoll showing the Coalition is trailing Labor …
The important thing here is that this was a Queensland Liberal Party backbencher, and a very experienced former minister, I might add. He rose in the coalition joint party room on Tuesday morning to ask the Prime Minister why the government was doing so poorly with voters if the economic policies were supposedly working. It is not just an issue being raised by people on this side. People out in the community talk to me on a regular basis about how difficult it is, about not getting a fair go and about their concerns over housing affordability, whether it's in Tasmania or around the rest of the country. I was in WA last week and the same issues were raised. This is a former minister. Okay, he was sacked twice from the ministry but, nevertheless, he was a minister. If he is asking those sorts of questions in their caucus room, then surely this government—surely the Prime Minister, and surely the Treasurer—can come up with some sort of visionary outlook for the future direction that they need to take to make our taxation system fairer.
When we are talking about taxation, every time Mr Morrison complains about tax increases millions of low- and middle-income earners need to remember he wants to increase your income tax. That's the reality. Every time Mr Morrison complains about wage growth, Australians need to remember he backs a cut to your penalty rates. Every time Mr Morrison talks about Labor's economic or tax policy, he just invents new numbers. We know that. They made these outlandish claims about the Parliamentary Budget Office doing the calculations on our policies, and they were complete and utter lies. They are so desperate; they are so dysfunctional. They are a chaotic government without any leadership. The Prime Minister tells us he's a strong leader—well, in this place he won't show the leadership that he needs to in ensuring Senator Nash steps out of cabinet and goes to the backbench until her citizenship is established by the High Court. He is a weak leader. (Time expired)
Judging by that contribution, Senator Polley's knowledge of how the coalition party room works is about as detailed as my knowledge of how the Labor Party caucus works, but at least I know that, when they meet, it is called a caucus and when we meet it is called a party room—but I'm sure Senator Polley's next contribution on this matter will use the correct terminology. I'm very pleased for a couple of reasons to contribute to this discussion tonight. First of all, I'm really heartened by the Labor Party's new-found concern for and focus on fixing the budget. It's not a concern that they showed very much when they were in government, obviously, given that they turned what was the best set of books in the Western world into the worst set of books in the Western world in just a few years, but obviously it is a concern that they have now discovered. I have to say, it is not really a concern they've even had in their first few years in opposition after losing office, because they have fought tooth and nail every single step of the way to deny our choices to fix the budget and to stifle our attempts to bring the budget back into shape. I am pleased to see they now have a concern about fixing the budget. Perhaps we will see in this new-found attitude from the Labor Party a willingness to support some of the savings measures that the government has proposed but have not been successful with in this chamber, in part due to their opposition.
Perhaps the government should bring back to the Senate some savings initiatives that were previously rejected by the Senate, given the Labor Party's new-found concern for this issue.
And they should be concerned about this issue, as we all should be concerned about this issue, because there is nothing fair at all about giving the next generation the obligations that this generation weren't able to meet. There's nothing moral or fair about expecting our children and grandchildren to pick up the tab for the lifestyle that we are leading today and for the expenses that we have failed to meet. Every time the government runs a budget deficit we are spending money on ourselves today that we have failed to fund adequately. I believe that is a very unfair thing. And I'm sure, with the Labor Party's concern about budget fairness, that they will soon reverse their opposition to our savings initiatives and support them to ensure that we can return the budget to surplus more quickly.
I'm also pleased to know that they want to make the tax system fairer, although I am concerned that their policy proposals to do so are somewhat inconsistent with that goal. There is nothing fair about increasing taxes by $150 billion, as the Labor Party propose to do. They propose to do so by increasing taxes on small business. Do we really think it's fair to increase taxes on small business, as well as medium and large businesses, to the tune of $65 billion by not supporting the rest of our Enterprise Tax Plan and reversing the existing tax cuts that we have already delivered to small business as part of our Enterprise Tax Plan? They're planning to increase taxes on housing by $32 billion by scrapping negative gearing, about which I will have more to say in a moment. They're planning to increase taxes by $13 billion by increasing the capital gains tax, which, again, I will have more to say about in a moment. They're planning to increase taxes on family trusts—or, more accurately, small businesses and eventually, no doubt, farmers as well—by $15 billion. They're proposing to increase income taxes on some of the hardest working and most productive Australians by $22 billion. And of course they propose to raise $20 billion more in superannuation than the government currently is, although they haven't specified exactly how they're going to do that.
So, with more than $150 billion of tax increases, I think we are entitled to ask how that is delivering a fairer tax system. How is slugging the Australian people with more tax than they already pay—which, frankly, I think is very high by world standards and higher than I would like it to be—a fair thing to do? If we are to ensure that the tax system is more fair, there is one way we can do that, and that is by cutting taxes. I'm proud to be part of a government that has started to do that, and I look forward to the government being able to do so even more in the future when the budget returns to a state that allows that. Of course, that process will be expedited by hopefully the opposition's newfound position of supporting savings measures in the Senate.
But of course if we want to cut taxes in a fair way then we have to look at who currently pays taxes and who pays the most taxes. It's only logical that those who are currently shouldering the biggest burden of tax should be those who receive the first and most significant tax cuts if such cuts are to come. I'd like all Australians to have a tax cut, but I'd especially like those Australians who are shouldering a particularly heavy burden of tax at the moment to receive a tax cut, and that is particularly those taxpayers who are in the pay-as-you-go tax system who have high incomes and an especially highly taxed form of income.
This motion also relates to housing affordability, and they wouldn't be the Labor Party if they didn't think you could roll up a radical change to the tax system to address an unrelated social problem, which is the very serious problem of housing affordability. All the best international evidence shows, as I have said in debates like this before and as Senator Williams alluded to in his contribution earlier, that the most significant factor in the affordability of housing is not the price of the house itself but the price of the land on which the house sits. The best thing any government can do to ensure that housing becomes more affordable is to make that land more affordable. And how do you make land more affordable? You make more land available. That will increase the supply of land and decrease the price of land. Unfortunately, that's not something that's within the remit of the federal government to control. That's something that state governments control. And I note for the record that the majority of those governments are of the Labor Party persuasion. So perhaps this motion today is intended to shame those state Labor governments into releasing more land so that they the supply of housing can be increased and prices can be reduced so that young people who want to enter the housing market—my generation, many of my friends among them—can do so in a more affordable way.
Finally, we've seen in this debate, as we often do at these times, references to inequality, the catchcry of the Labor Party, which they seem to have picked up from the Greens. There was a very timely research note put out last week—a parliamentary research brief—by the good people at the Institute of Public Affairs, who, some senators will know, I have an association with as my former employer. Daniel Wild published an excellent piece on four facts about inequality in Australia. In the interests of full disclosure, I did not work with Mr Wild directly; he joined the IPA after I left. He published a number of really pertinent facts about the inequality debate, the most important of which is the fact that inequality, as measured by the most academically accepted and reliable measure of inequality, the Gini coefficient, has not increased in Australia; in fact, it's decreased. When you rely on both ABS measures and the superior—in Mr Wild's view—HILDA measures, which I agree are a more a reliable source, income inequality is shown to have decreased—slightly, I admit—from 2001, where it was 0.31, to 0.30 in 2015. That is a positive development.
It is also worth pointing out that although Australia has wealth which is distributed in an unequal way—like all countries that have a free enterprise system do to some extent—by world standards we are a country with very equally distributed wealth. In fact, in the distribution of wealth we are the third most equal country in the developed world, behind only Japan and Belgium. That's according to a recent Credit Suisse report. We are more equal than New Zealand, France, Switzerland, United Kingdom, Netherlands, Germany, United States and Denmark. That is an impressive achievement for Australia.
I would like to thank the Ecuadorian senator for bringing attention to these problems her party has worked so hard to create. Let's not forget that it was the Labor Party that wrecked our budget in the first place with cash handouts for dead people and pink batts that burnt down houses and killed people. The Rudd government shovelled money out of the door, literally throwing away money for the sake of it. They blew a $22 billion surplus left by the Howard government. This was mad, reckless spending with no economic justification. The Keynesian arguments imported from America never applied to Australia, as we were never in a liquidity trap.
Now the Labor Party finally wake up to the fact that the budget they broke needs fixing—now that it is someone else's problem. They still will never support even a dollar being trimmed from our bloated welfare budget. They are no longer the party for working Australians. They now represent higher taxes and handouts. In Labor's world, all the work of budget repair will be done with new taxes, paid for by the working Australians they used to represent. They want to bring back the carbon tax—literally a tax on the air that we breathe—to stop the ocean rising a few millimetres in the next hundred years. This will raise electricity prices beyond the reach of many Australians. They want to levy new taxes on family trusts, which are used by virtually every family business in Australia. That's what you get from Labor when you try to earn a buck and help out your family, but if you sit on your bum, shoot up ice and demand a disability pension, don't worry: they'll be right in your corner.
Labor says they want to make housing affordable, but look what they do: they strangle the housing supply with regulations and green tape. At the same time, whenever they are in government they flood this country with immigrants and sell Australia piece by piece to foreign interests. You are never going to make housing affordable by supporting massive immigration and making more and more people fight over less and less.
Once again, thank you to Senator Gallagher for using some of her little remaining time in parliament to draw attention to these issues. The best way we can get started on fixing them is by never sending another vote in Labor's direction ever again.
Last week the Reserve Bank issued its 2017-18 corporate plan. No doubt everybody here had this marked in their calendar. It makes for interesting reading because it sets out what the RBA thinks are the key risks for its monetary policy functions in the year ahead. It draws attention to two particularly interesting sets of risks. The first is slow wages growth. The RBA identified, with classic economist understatement, that wage growth has declined to low levels in recent years. In fact, over the last year, overall annual wage price index growth has been at almost exactly 1.9 per cent. This is the lowest figure recorded by the ABS since it began the data series in the nineties. Private sector real wages have been negative. In other words, private sector wage earners are now worse off than they were 12 months ago.
The second set of interesting risks identified by the RBA relate to household debt. The RBA notes that there has been a substantial build-up in household debt, and it recognises that the high debt levels mean that monetary policies' ability to stimulate growth may be more limited than in the past. Let's be clear about what that refers to. Housing debt is now so high that the Reserve Bank is worried that it can't use interest rates to stave off a recession. The RBA is right to be concerned about debt. We are taking on more. Average home debt has doubled in real terms since the early 2000s. We're also taking longer to pay it off. Since 1990, the number of people with a mortgage debt has doubled in the 45-to-55 age group and has tripled in the 55-to-65 age group. People are entering retirement with mortgage debt. People who can't afford that level of debt are being locked out altogether from the housing market, and the rate of home ownership for under 40s is 50 per cent less than what it was in the early 2000s. Those are the two key risks highlighted by the RBA—wage growth and housing affordability.
There's a lot in the economy that you can't control when you're in government. It's the worst-kept secret in Canberra. There are commodity price spikes, global recessions and cyclones that wipe out entire banana crops. But what about wages? You can do something about wages and housing affordability, but this government has not only refused to act but also refuses to even admit that these things are a problem. We will never forget that the former Treasurer's solution for housing affordability was to 'get a better job' or that the Minister for Finance, until recently, just denied that there was any kind of demand problem in housing. We shouldn't forget that, at the same time as the RBA is talking about the problems posed by slow wages growth, this government has been reducing incomes for the most vulnerable. It's been cutting penalty rates, cutting benefits and cutting payments. Its only solution for jobs and growth seems to be corporate tax cuts that deliver nothing more than dividends and share buybacks.
The Treasurer is still filling out the practise exercises from the back of a 1987 economics textbook. Today's economic problems are different, but the problem is that this government is so fixated on fighting the class war from decades ago that it cannot act on the issues that are facing people today. It cannot act on housing affordability, it cannot act on slow wages growth and it will not act on the root cause of soaring electricity prices. We know what the solutions to these problems are—reform to negative gearing to tackle the distortion of investment into that sector, a fairer tax system and empowering workers to bargain for higher wages. But what we also know is that this government will never have the vision to put those things in place.