David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

A sign in Bill Clinton's campaign office used to say 'It's the economy, stupid'. It was a good sign. We politicians should focus on the economy and not grandstanding about Australia's achievements on the sporting field as if we had something to do with it, not expressing sympathy about the latest natural disaster hitting our continent as if those affected care about our virtue signalling, not maximising taxpayer funding for our pet government program and not highlighting the private foibles of our political opponents. I'm not suggesting the government manages the economy—it doesn't; it doesn't make jobs, it doesn't drive innovation, it doesn't create anything productive—but the government can make things worse. We politicians should focus on undoing the damage that we are doing to the lives and living standards of ordinary Australians.

I have seven suggestions for reducing the damage we are doing, one for every day of the week. First things first, we should cut the company tax rate for all businesses. Currently, for every $100 of profit that a medium to large Australian company makes by producing and selling things of value, the government takes $30. This leaves the company with up to $70 to reinvest so that the company can make and sell even more things of value. This is a matter of great concern to the company's owners, its shareholders, who have invested their money in the company. They would prefer a lower company tax rate because when a company keeps more money, that money earns a return and the value of their investment increases. It's the same for foreigners who invest their money in Australia, but in their case they have other countries where they can invest. If our government takes $30 of their investment while the government in another country takes only $15 or $20, those foreigners aren't silly enough to keep investing here. Quite simply, Australia's company tax rate discourages investment and hurts job creation and wage growth. To undo this damage, the government must reduce the company tax rate.

The second thing we politicians must do to reduce the damage we're doing to the lives and living standards of Australians is to reduce other taxes. The top marginal tax rate discourages Australians to work and save, encourages skilled Australians to work and live overseas, and discourages skilled foreigners from making Australia their home. Arbitrary fuel, alcohol and tobacco taxes damage the living standards of Australians by increasing their cost of living and discouraging them from spending their money on the things that they want. And import tariffs, including punitive taxes imposed in the name of antidumping, have the added detriment of discouraging Australian businesses from producing what they are best at, instead encouraging them to produce what other countries can more cheaply provide.

The third thing we must do to reduce the damage we are doing to the lives and living standards of Australians is to stop impeding development. We must make it easier to undertake investments and we must lower the cost of meeting our environmental standards. We must remove duplication in federal and state environmental approval processes. We must remove the ban on the development of nuclear energy and waste projects, and we must prevent busybodies who are unaffected by new developments from challenging those developments' environmental approvals. This would signal to entrepreneurs and investors that they are more likely to receive development approval, it will cost them less and the wait for approval will be shorter. There is no better way to protect the long-term employment of thousands of forestry, mining and tourism workers than to signal that Australia is truly open for business.

The fourth thing we politicians must do to reduce the damage we're doing to the lives and living standards of Australians is to cut off the poison of lifelong welfare. Welfare is charity; it's not a right, and it's not something that should last a lifetime or extend over generations. We let school leavers go straight onto the dole, making welfare dependency the norm rather than a path to be avoided. We allow far too many disability support pensioners to remain on the pension without reviewing their disability. We impose no obligation on the unemployed to move to where jobs are. And we reserve the worst treatment for Aboriginal welfare recipients in remote areas. Unlike other welfare recipients, these welfare recipients face no obligation to look for a real job, and they can abuse drugs and alcohol without any risk to their welfare payments. This is the prejudice of low expectations. Welfare dependency wastes the nation's human capital and consigns hundreds of thousands of Australians to intergenerational squalor.

The fifth thing we politicians must do to reduce the damage we're doing to Australia's economy is to cut government spending. No more billions for intergovernmental grants; no more billions for middle-class welfare, like family tax benefits for families with six-figure incomes; no more billions for the salaries of thousands of Canberra public servants in a health department that runs no hospitals, an education department that runs no schools and an environment department that duplicates the obstacles imposed by state environment departments. A big-spending government gives rise to a big tax burden. It prompts debt and deficit that threatens to degrade the country's credit rating, leading to higher interest rates for everyone, and that threatens to distort our exchange rate to the detriment of our export industries. And when big-spending governments deliver or subsidise services, this thwarts service delivery by competitive private markets instead. This wastes resources and makes us all poorer.

The sixth thing we must do to stop damaging the lives and living standards of ordinary Australians is to get off the backs of employers. Currently, they can't hire permanently without losing the option of firing, and they can't employ someone on a salary that corresponds to their contribution to the business because of one-size-fits-all wage regulations, including penalty rates and the minimum wage. Less damaging industrial relations would also mean allowing more foreign ships to compete for freight jobs along Australia's coast and allowing Australian ships to pay lower wages when bidding for work in international waters. These changes would reduce the costs to Australian consumers and businesses of traded goods and promote the employment of more Australians.

Finally, the seventh thing we politicians must do to stop damaging the lives and living standards of ordinary Australians is to stop intervening in the energy market. We must abolish the renewable energy target and stop energy subsidies. We must withdraw from the Paris accord, make no commitment to reduce greenhouse gas emissions unless the rest of the world does the same and abolish government agencies and banks that devote taxpayers' funds to propping up renewable energy. Bringing down prohibitively high electricity prices will save Australian businesses, particularly our remaining manufacturers, and give relief to every household in the country.

The government doesn't manage the economy; it screws it up. It's time politicians stopped obsessing about the inconsequential and starting undoing the damage that has been done by a generation of politicians with little understanding of business and prosperity. Time is running out.