Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by Senator Wong today relating to proposed company tax cuts.

At the outset, I say that today we confirmed, again, the extent of the persistent and wilful misleading by the government about the so-called benefits of their $65 billion tax cut for big business. I want to emphasise that this debate for Labor has never been about whether or not we recognise the contribution that business makes to the economy, and neither has this debate been about any less recognition of the importance of growing the national economy, which is so crucial to the standard of living we all enjoy. Recall that it was Labor governments which engaged in the economic reforms that have enabled the extraordinary, unbroken period of economic growth to the benefit of the nation. We also understand business needs the right policy settings to grow and prosper, but it's not a one-way street.

The taxes paid by companies, and, indeed, all Australians, are what fund the education and training system for the workers they employ. Those taxes are what build the infrastructure that business needs to do business and to get its products to the world. In this country, unlike many others, it is those taxes, not business, that pay for the health care of their workforce and that have given Australia amongst the best health outcomes in the world.

Remember the famous quote:

Taxes are what we pay for civilized society.

That is why it's been so disappointing to discover that so many in the business community are simply not prepared to be a part of this grand bargain. It is so disappointing to know that, when asked to sign a letter from the Business Council of Australia pledging that in return for the $65 billion in tax cuts they would increase wages, big business said no. When asked if, in return for the $65 billion in tax cuts, they would create more Australian jobs in the cities, suburbs, towns and bush, what did they say? No. When asked if, in return for those $65 billion in tax cuts, they would commit to paying their tax, they said no. In return for the $65 billion in tax cuts this government is proposing, we have big business refusing to commit to higher wages, refusing to commit to new jobs and refusing to even commit to paying their tax—a pretty extraordinary and a pretty disappointing response from business. I've got to say, I find it pretty disappointing on a personal level. I've always been one of the people on this side of the chamber who has sought to engage with the business community. I've worked with them in government and in opposition. But when those in the business community, who are urging this chamber and the Australian people to support this level of tax cut, are not prepared to live up to their side of the bargain in return for these tax cuts, they tell us all something quite important about the extent to which they are prepared to contribute to the national interest.

Even worse than the behaviour of business here has been the behaviour of this Prime Minister and his government. Frankly, their dishonesty and deceit in their case for the tax cut has been exposed. Time after time we have been assured this tax cut will drive up wages, create jobs and lead to business paying more tax. Remember that argument? I think it's the Laffer Curve argument. But we know it's not true, and that has been confirmed again today. There has never been any basis for making these claims. We shouldn't be surprised about this.

Remember the deceit that has surrounded this tax cut from day one? Remember in 2016 when this PM couldn't even tell Australians how much this tax cut would cost? Two days later we had to drag out of Treasury officials, I think in estimates, that it would cost $50 billion, and we now know, a year later, that the cost is $65 billion. I think Australians deserve more. They deserve a lot more than a government that's prepared to wilfully mislead them about the effect over the next decade of the single biggest handout plan by either side of politics. The honesty should begin now. It should begin today with the government abandoning the tax cut, recognising and admitting its argument is flawed and that the tax cut is unaffordable. That is why Labor says no at a time when the government has sent debt soaring above half a trillion dollars, has cut funding to schools and hospitals, and is hiking tax on middle Australia. Remember that: hiking tax on middle Australia. Our priority cannot be a $65 billion handout to Australia's powerful corporations. (Time expired)

James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

It's my great honour to have the opportunity to respond to Senator Wong's motion to take note. If we needed any more evidence at all that the Labor Party, which she represents in this chamber, has no plan whatsoever to stimulate investment, to stimulate growth, to create jobs and to increase wages, then that speech was evidence of it. It contained no ideas, it contained no proposals and it contained no measures from the alternative government of Australia. All it contained was rhetoric and criticism and complaint. There was not one constructive suggestion or proposal anywhere in that speech. It contained a number of what I would characterise as intellectual errors and sloppiness that I wouldn't expect to see from someone of the stature of the Leader of the Opposition in the Senate—herself a former finance minister. I particularly appreciated the emphasis that Senator Wong placed on the supposed letter from the Business Council of Australia and how they have seized upon this as evidence that, if company tax is cut in Australia, there will be no increase in investment, there will be no increase in employment, there will be no increase in wages and there will be no increase in tax revenue.

As Senator Wong would know well from her time as finance minister, businesses don't pay taxes in this country as part of some kind of bargain, as she characterised it, or because they've signed a letter to the Senate crossbench or anyone else for that matter. They pay tax because they are legally required to, and they pay tax when they make a profit. Anything that we can do to ensure that business is making a profit and is therefore paying tax is a very prudent and sensible thing to do, and that's exactly what the government's enterprise tax plan does. It will stimulate investment by increasing the return on that investment and will encourage investors, both domestic and foreign, to invest more of their scarce capital here in Australia—as opposed to other places in the world where they could invest it—by guaranteeing them a better return on that investment. They won't be investing because of goodwill and they won't be investing because they love Australia or our weather or our food or our furry animals; they'll be investing because they'll be able to get a better return than they once did and they'll be able to get a better return here relative to the alternative places they could invest.

The word 'backflip' is often abused in political commentary. Usually the word 'backflip' is applied to a party or a person who changes their position on something. But, of course, when you do a backflip, you're flipping around and falling exactly where you were before. In a funny way, that's what the Labor opposition has done this week. We know, as Senator Cormann quoted throughout question time today, that Senator Wong, the shadow Treasurer and the Leader of the Opposition, Mr Shorten, have all been on the record in the past very eloquently supporting the case for business tax cuts in this country. They were then dragged, perhaps by the Greens or others, to oppose that position, and this week we have seen that they're on the way back to supporting them again.

Mr Shorten revealed this week that they may support the tax cut that has already been legislated for small and medium sized enterprises with up to $50 million in revenue. The backflip completed this week by the opposition is a real backflip indeed. They are back to a position that they used to hold a couple of years ago. It's good progress. I welcome it. There's only a little bit further for them to go. They should keep heading down the path that they're on. They should concede the argument, as they clearly have, that tax cuts for small and medium enterprise businesses are a good thing and the right thing to support, and they should follow that position to its logical conclusion. They should realise that supporting tax cuts for businesses with over $50 million in revenue will have the same beneficial impact as cutting taxes for businesses with under $50 million in revenue. In fact, as some economists argue, there is reason to believe that the beneficial impact of cutting taxes for businesses with over $50 million in revenue may be larger than the benefit from cutting taxes for small- and medium-sized businesses—though, no doubt, the impact will be positive for both.

I hope the sign this week is that the opposition are on a positive trajectory, a sensible trajectory. I hope they're reconsidering their previous populist opposition to company tax cuts. I hope they will do a real backflip in relation to the position they all held not that long ago, much as it might trouble some on their benches, Senator Cameron and Senator Carr included. Their own colleagues have very eloquently supported the case for business tax cuts in the past. I hope we will see them do so again. We've seen a ray of hope this week. There is light at the end of the tunnel. We may soon be able to see a much more sensible policy on business tax cuts from the opposition.

Carol Brown (Tasmania, Australian Labor Party, Shadow Minister for Disability and Carers) Share this | Link to this | Hansard source

As I rise to take note of answers, I remind the good senator, Senator Paterson, that this debate is about taking note of an answer provided by a minister, in this case the Minister for Finance. A lot of Senator Paterson's contribution today was about attacking the Labor Party. I can see why he may have wanted to use up his time in the debate to do that, because I'm sure he would have been embarrassed by the answer that was given by the finance minister today to the question that was asked of him. It was an interesting answer that he gave today. He continued to persist with this belief that the government's $65 billion gift to big business will create jobs and lead to higher wages, despite all the evidence to the contrary. I simply can't understand how the members of the government continue with such complete certainty, when so much research and commentary and now even the Business Council's very own words—or, should I say, lack of words—contradict them.

The government tried to say that they are sure that their cash handout to big business will create jobs and result in higher wages, but do you know who isn't so sure? Big business. Surely, if you're going to go ahead and give away $65 billion of taxpayers' money, you'd want to make sure you get something in return. But, no, the government are pushing ahead anyway. They're determined to see this handout happen, no matter what the result. They're certain that $65 billion to big business will be good for the economy. But, if so, why wasn't the Business Council willing to make that commitment to the government? Why is it that the leaked letter that Senator Wong tabled here today—about which they shut down debate in the House of Representatives only hours ago—clearly shows us a before and an after? It shows a 'before letter', with a proposed commitment to create jobs, invest in Australia and pay tax, and an 'after letter', with none of those commitments included. It simply beggars belief that the government refuse to understand this.

After the leaking of a letter as plain as this, the finance minister should have been in front of the media, hat in hand, apologising to the Australian people and asking them to forget the whole thing and act like he'd never even tried to give away the public's money. Yet, somehow, the government continue to remain determined to legislate this corporate tax cut. Somehow, they're determined to push on. The government have been unable to get the numbers in the Senate today because this is bad policy. The leaked BCA letter today shows that.

As Fairfax media reported today, BCA members have apparently been negotiating on the terms of this letter for months, and good on them; they've got a right to be involved in public affairs. But, surely, during that time, a little bit of this government's certainty would have rubbed off on them.

Surely, if it's as plain as day that a tax cut is going to deliver more jobs, wages and taxes, this is exactly the kind of thing the BCA would've been able to get its members to sign on to. The government may be sure that a $65 billion gift to big business is going to lead to jobs, but apparently the BCA aren't. You'd think that, at a time when the OECD and the IMF are warning about the dangers of inequality to the economy, the government would be doing everything that it could do to see a pay rise for everyday Australians. But, only today, we've seen representatives of underpaid, early childhood educators here at Parliament House demanding better conditions. These educators are paid just $21 an hour, despite looking after Australia's future. How is it that this government could possibly be focused on gifting away cash to big business and they couldn't even meet with these workers today? I wish Senator Martin were here today to see this debate that is happening. (Time expired)

Amanda Stoker (Queensland, Liberal Party) Share this | Link to this | Hansard source

I rise to take note of the contribution of Senator Brown and of course the contributions made by Senator Cormann and particularly Senator Fierravanti-Wells in the course of today's debate.

Senator Wong interjecting—

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Thank you, Senator Wong. Senator Stoker, in taking note, you're taking note of answers to questions. Senator Wong took note of answers provided by Senator Cormann, so that really needs to be the premise of your five-minute contribution.

Amanda Stoker (Queensland, Liberal Party) Share this | Link to this | Hansard source

Certainly. In the course of question time, Senator Cormann exposed Labor's complaint about the enterprise tax cuts that are before this parliament; he exposed that complaint for the misconception that it is. The policy to cut business tax rates doesn't work because the Business Council of Australia says it will or won't. It doesn't work because anybody else might write a letter expressing their opinion. It works, as Senator Cormann has explained, because it is basic economics. When we cut business tax rates, we attract capital and investment to this country. When we cut business tax rates, we empower businesses to reinvest in this country. We empower them to put more and more into growing their business. And what does that mean for Australians? It means the confidence to take on more staff, to create more jobs. It means that, as those jobs are created, unemployment reduces and competition for workers increases. It means that competition drives growing wages throughout the economy, and good employment opportunities and wages growth empower the confidence of Australian workers. It empowers them to spend. It empowers them to buy a home, to save for their retirement and to do all of the things that are so important to ordinary Australians reaching their potential.

This is good for the Australian economy, and, as Senator Cormann noted today, Labor knows it too. That's why Mr Shorten has expressed his firm support in the past for business tax cuts. He knows deep down that's what the Australian economy needs. He might be from the opposition, but I'll give him credit where it's due—he is right when he says so. But, when it became politically expedient, he abandoned that commitment. He abandoned common sense and he flip-flopped to now oppose what is a sensible measure to create growth in this economy. Mr Shorten, as Senator Cormann noted, flip-flopped like a pancake on the need to use business tax cuts to grow the Australian economy and create opportunities for Australians.

He did so just like he flipped on the need to invest in regional Queensland. He flipped just like he did on the importance of the Adani Carmichael mine in North Queensland, which will create desperately needed jobs for North Queenslanders.

The coalition, in contrast, is absolutely committed to building opportunity and jobs in this country. All of the evidence that is before this parliament, including the Australian Treasury's modelling when it examined international trends in company tax rates and the implications for Australian company tax, shows that as these rates are reduced there is an enormous benefit to the Australian economy. All of it shows that, as company tax rates reduce, there is growth in the corporate sector, increased profitability and increased opportunity for Australians.

I want to turn to the answers given by Senator Fierravanti-Wells in the course of question time. She explained how important the Australian coalition's commitment is to providing support to our partners throughout the Asia-Pacific region. It's worth noting that aid has increased in this country. In 2017-18 it rose to $3.9 billion, which is a 2.2 per cent increase on the previous year. That program is committed to providing lifesaving assistance to those in need. We are giving $399.7 million in this financial year to humanitarian emergency and disaster relief. The government doesn't commit to prescriptive time-bound targets, but it will always remain focused on delivering results for the people in our region and security for this nation. (Time expired)

Anthony Chisholm (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

It's a pleasure to follow on from Senator Stoker, but unfortunately, being a fellow Queensland senator, I'm going to have to disagree with the senator in this debate. I want to pick up on one word that the senator used, and that is 'exposed'. There is only one thing that has been exposed today and that's the hoax that Senator Cormann and their big business mates, in conjunction with their work with the Business Council of Australia, were purporting to have on the Australian people, Australian workers and Australian families. That's what was exposed in the question from Senator Wong. It has also been unravelling this week.

What we see in this debate around company tax is that it really is about priorities. Australian families know and understand that those on that side are on the side of big business and the banks, whereas we on this side are on the side of Australian families and Australian workers, and we are absolutely proud to be so. What we have seen exposed this week has been as a result of the desperation of Senator Cormann and his government to get a deal done with the crossbench. They will say and do anything to convince the crossbenchers to sign up with them and also to convince the Australian public. I'm very thankful that there are a number of crossbenchers who were prepared to hold out and ensure that the hoax those opposite were trying to purport was exposed. That's happened throughout this week because of what happened within the Business Council of Australia.

First, there was a survey that contradicted their public stance. This was exposed earlier in the week. It basically went to CEOs not actually investing the money into wages or further growth in Australia. It actually started with the survey. What we have seen exposed by Senator Wong through her question to Senator Cormann today is the letter they were touting to the crossbench. They were using this letter to convince the crossbenchers to sign up to support the big business tax breaks that the government has been supporting. It exposed that as a hoax as well.

Let me go through in detail what elements of that have been a hoax. First, they deleted a commitment to increase wages. That is one of the key selling points that those opposite have been using. It was in the draft letter that the BCA put together, but it was deleted from that. They also deleted the commitment in there that they would create more Australian jobs in the cities, suburbs, towns and bush.

That's very Churchillian, almost like it was from Senator Cormann yesterday. That came out. For those people out there who are looking for work or for those in areas where there is a depressed employment market, they deleted the comment that would have given those people some hope. And this, for me, is just gobsmacking: they deleted a commitment 'to pay our tax'. Rightly, Australians are sceptical about the hoax that has been put forward. What really is exposed here is that there's a public view that they put out to try and convince the crossbench senators and the public of what their position is, and then they've got a private view. That private view should be very concerning if you are an Australian worker or an Australian family out there, because they make no commitment, in private, to doing what they are saying in public, and that is what has been exposed through this process.

So, when we look at the consequences of what this big business tax cut would mean, what we on the Labor side know, and what Australian families know, is this will result in a cut to services—cuts to health, cuts to education. Where does this impact the most? In regional areas. So there are no commitments to jobs and no commitments to investment. That's all a public hoax. But, when we look up what they're privately committed to, it will mean cuts to health and cuts to education that will have a devastating impact on communities, particularly those in regional areas that most rely on this. These communities see no benefit; all they see is the downside. And they will absolutely hold this government to account.

We know, as I said at the start, that this is all about priorities. What the Australian public know is that those opposite are on the side of big business and the banks. Those on this side are on the side of Australian families and Australian workers, and I absolutely know where we will stay as we fight this until the next election.

Question agreed to.