Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Cormann. This morning, the finance minister twice refused to endorse the Prime Minister's claim that a $65 million big business tax cut will increase wages. So I would ask: how is it fair that the Prime Minister is giving a $65 billion handout to big business just so they can keep it for themselves?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The Labor Party get their numbers all muddled up. First it's a $65 million giveaway to big business; then it's a $65 billion giveaway to big business; and, in the Labor Party talking points, it is a $65 giveaway to big business. The first point I would make is that, clearly for the Labor Party, every business is a big business. If you have got one employee, you're big business. If you've got two employees, you're big business. If you have $2 million in turnover, you're big business under the Labor Party. When they talk about the $65 billion cost to the budget bottom line of business tax cuts, the Labor Party know that $30 billion of that represents tax cuts for businesses with a turnover of up to $50 million. You know what: you could have knocked me over with a feather. Having fought it in the trenches, having fought it on the beaches, having fought it in the air—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Cormann, please resume your seat. Senator Cameron, on a point of order.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

It's on relevance. The question was about fairness. The minister has not gone near fairness and probably never will.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Cameron, on the point of order, the minister is allowed to address parts of the question. I remind the minister of the terms of the question, but he is allowed to address parts of it and I cannot instruct him how, or what part of it, to answer.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Here's my prediction: the Labor Party will end up backing in our business tax cuts in full. You know why I know that? Because last year they were fighting them on the beaches, in the air, by the sea—the $30 billion worth of tax cuts for businesses with a turnover of up to $50 million. Do you know what their position is today? It's their policy. They're backing it in. Last year they were arguing in this chamber that it was the worst thing ever. And what is your policy now? You're backing it in.

Clearly, people across Australia understand that, if we want Australians to have the best possible opportunity to get ahead, we need the businesses that employ them to have the best possible opportunity to be successful and profitable into the future. We want Australians today and our children and grandchildren to have the best possible opportunity to have a job and a career here in Australia. We need to ensure that our businesses are not disadvantaged compared to businesses in other parts of the world. We'll continue to fight for what is right and we continue to fight for the working families of Australia. You have sold them out. (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Carr, a supplementary question.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

I refer to an article entitled 'Secret survey shows tax cuts won't go to jobs', published in this morning's Australian Financial Review. Can the minister confirm that the Business Council of Australia's secret survey found that fewer than one in five chief executives will use the Turnbull government's $65 billion handout to big business to increase wages or employ more staff?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Firstly, it is not a $65 billion handout to big business. It is leaving more of the businesses' money with them so they can reinvest it in their future growth and expansion so they can hire more Australians. I don't expect Senator Carr to understand basic economics, but if you go and look at what the shadow Treasurer used to say you'll see the shadow Treasurer knows that the burden of a higher company tax rate falls most heavily on workers. Why does a company tax cut lead to stronger wages growth? As there is more investment, stronger growth and more competition for workers in the marketplace, wages will go up. The key ingredient for stronger wages growth—and this is economic orthodoxy 101—is always more competition for workers and a depleting excess supply of labour.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Carr, a final supplementary question.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

Given that the finance minister has refused to endorse the Prime Minister's claim—and has again done that just today—and business leaders have themselves refused to agree that they will use the Turnbull government's handout to big business to benefit workers, will the Turnbull government now abandon its $65 billion big business tax cut and instead use taxpayers' money to achieve fairer economic growth?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

We will continue to fight for the working families of Australia and to ensure that families of Australia have the best possible opportunity to get ahead. On our economic agenda, including our plan to ensure Australian businesses are not disadvantaged compared to businesses in other parts of the world, we'll help ensure that there is more investment, that there are more jobs and, as we have more jobs and there's more competition for workers, that there'll be higher wages. I can assure the Senate that this government will continue to fight for the working families of Australia. Nine out of 10 working Australians work in a private sector business.

The Labor Party wants to keep disadvantaging Australian businesses. The Labor Party wants to keep Australian businesses at a disadvantage when it comes to competition with businesses in other parts of the world. The Labor Party is quite happy to put investment and jobs at risk and it will stand condemned for it.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

My question is also to the Minister representing the Treasurer, Senator Cormann. In seeking to justify the proposed cuts to the company tax rate and in trying to support the crossbench, the government has been saying that the benefits of a tax cut will trickle down and that workers will see their wages rise. Senator Cormann, you're aware that Morgan Stanley recently did a survey across the Dow and the Nasdaq of US companies that have recently had a tax cut, and 44 per cent of them said they will use that money to buy back shares or they will return it to shareholders. This is no surprise. Did your department, the Treasury, conduct its own assessment, surveys or consultations with the 130 Business Council of Australia members or other businesses to find out what they were going to do with these funds? Were they going to keep it or give it to Australian workers?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

On our side of politics, we understand that policies that support the free market help deliver the best outcomes for individuals, their families and the communities they live in. On this side of parliament, we understand the historical failure of socialism. We understand that socialism makes everybody poorer. And you know who it makes poorer first? Low-income earners have the most to lose from a socialist agenda. We understand that the modern Labor Party and the Greens are all in favour of going back to the old class-warfare, socialist agenda of the past, but, let me tell you, history around the world has proven—

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I have a point of order on relevance, Mr President. I know Senator Cormann's on a roll today, but he hasn't come anywhere near my question about: did they do a survey or consultation with Business Council members before they adopted their policy?

Scott Ryan (President) Share this | Link to this | Hansard source

As I constantly remind those who ask questions, ministers are allowed to answer parts of questions and preambles to questions and to address the complete terms of the question asked. I cannot instruct the minister which part of a question to answer.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

On this side of politics, we don't believe it's the job of the government to run private-sector businesses. It's not up to us to tell private-sector businesses what to do. Senator Carr thinks it's the job of government to run private-sector businesses and sort of nationalise them. We know that that leads to inferior outcomes for people around Australia. We happen to believe that encouraging individuals to work hard, stretch themselves and be the best they can be, and that supporting the free market, free enterprise, reward for effort and risk taking are actually the key to making sure that we can maximise our living standards in a sustainable fashion. And don't take my word for it. There is evidence around the world that that is, in fact, the truth.

Senator Cameron interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Cameron! Senator Cormann, please continue. I was calling Senator Cameron to order.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Well, if you want to see the disastrous effects of socialism on the quality of life of individuals and their families, look no further than Eastern Europe. I know that the Labor Party doesn't like to hear it, but the truth is: even if you put yourself ever so incrementally on a bad, negative trajectory, you will end up in a very bad destination. We want people to end up in a good destination. We believe in freedom. We believe in— (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Whish-Wilson, a supplementary question.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Does the minister accept that, if a company makes a rational decision to buy back its shares or return money to shareholders, it's a decision that they have nothing better to do with the funds? So why do you persist with this myth that they are going to reinvest that money back into the economy and into workers, which will lead to wage rises?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Sadly, you don't understand basic economics. The truth is that every individual business will make a decision on how they can best position themselves for a successful future. The implication of your question is: if we make it harder for businesses to be successful and to compete, do you think they'll employ more people? Do you think that a less profitable business will employ more people? Let me tell you: less successful, less profitable businesses, businesses with their arms tied behind their backs because they've got to compete with businesses that have the benefit of lower taxes, will hire fewer people. And that means higher unemployment. Higher unemployment means that there is less competition for workers, which means that there will actually be lower wages than otherwise would be the case. Your recipe of opposing business tax cuts is a recipe for less investment, fewer jobs and lower wages. Our agenda is about more investment, more jobs and higher wages.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Whish-Wilson, a final supplementary question.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

It seems that the minister's agenda is higher share prices and higher CEO bonuses for their big business mates. Now that the BCA has been caught with the yellow sticky tape down its trousers and your biggest cheerleader is in disgrace, are you happy that the Labor Party has fallen in behind your tax cuts today?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Here is where the bipartisanship between the Greens and the coalition comes back together. The Labor Party has lost all credibility. In government, there was no-one more eloquent in making the case for business tax cuts than Bill Shorten. When they were in government there was nobody more eloquent in criticising the Greens' position to limit business tax cuts to small business. But of course then they opposed it because—you know what?—it became our policy in the 2016-17 budget. They actually know, in their heart of hearts, that making sure that Australia can be globally competitive and our businesses can be competitive is the right thing to do by Australia. But Bill Shorten isn't interested in what is in the public interest. Bill Shorten is only interested in the politics of the situation. But of course he has backed in our business tax cuts for businesses to $50 million in turnover, which he fought tooth and nail last year. Nobody can take Bill Shorten seriously. (Time expired)