Tuesday, 21 August 2018
Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017; In Committee
Minister, I want to ask you a question about the impact of an uncompetitive corporate tax rate on businesses, particularly those businesses with turnovers above $50 million. But, before I get you to answer a question on that, I just want to preface it by talking a little bit about and reminding you of a visit we did earlier this year to a medium-sized Western Australian company called Legeneering in the Henderson area of Western Australia.
A few years earlier, Legeneering would have been what you would describe as a small business. It was a small engineering contracting firm that, through positive relationships with what could only be described as a very large Western Australian business, grew over time. It grew its number of employees significantly, up to around 200, I believe—I am stretching my memory a little. But, in turn, it was able to grow a network of contractors and support businesses that fed into its services. The large company that was involved in this particular network of relationships was Woodside Energy, and what you saw there was the direct action of what the other side sometimes mockingly calls 'trickle down'. You see a large business contracting to medium-sized businesses, who contract to smaller businesses. The jobs flow out from those large businesses to the medium-sized businesses and to a large number of small businesses. In that way, a significantly increased number of jobs is provided at that small-business level.
Minister, as we see the impact of international corporate tax cuts start to flow through and we see the need to have a globally competitive tax system, I think what I'm trying to get at is: what will the impact be if these amendments and this bill are not supported? Who is ultimately going to bear the burden in the economy of globally uncompetitive corporate tax rates, particularly for those larger businesses with turnovers above $50 million?
I couldn't put it any better than the current shadow Treasurer, Mr Bowen, who very succinctly pointed out that the burden of company tax falls hardest on workers, rather than wealthy shareholders. And that stands to reason, because, if we make it harder for businesses here in Australia which employ millions and millions of Australians to compete with businesses in other parts of the world, then we will lose business to other parts of the world and the beneficiaries of that will be workers in other parts of the world.
The principal beneficiaries of a lower, globally more competitive business tax rate here in Australia, as none other than Dr Ken Henry, the then Secretary of the Treasury to Wayne Swan as Treasurer, clearly pointed out, would be workers here in Australia. That is because, if businesses here in Australia are in a better position to compete with businesses in other parts of the world, they have a better opportunity to grow and expand. As they grow and expand, they will hire more people than they otherwise would, and, as they hire more people than they otherwise would, of course, that means the unemployment rate is lower than it otherwise would be. Demand for workers is higher than it would be. With shrinking supply and increasing demand, wages would have to go up because there's increased competition for a diminishing resource. This is all stuff that the Labor Party used to understand.
Just to put this into context, across Australia, about nine out of 10 working Australians work in a private sector business. So, Australia-wide, there are just under 11 million Australians working in a private sector business out of 12½ million working Australians all up—about 3½ million in New South Wales, about 2.9 million in Victoria, about 2.1 million in Queensland, 725,000 in South Australia, 1.2 million in Western Australia, 210,000 in Tasmania and 107,000 in the Northern Territory who all work in private sector businesses.
Even in the Australian Capital Territory where, of course, we have a larger proportion of public sector workers, the overwhelming majority of working Australians actually work for private sector businesses. Some 63.8 per cent of working Australians in the ACT work for private sector businesses, and 36.2 per cent work for the public sector. In the ACT, self-evidently, the proportion of private sector workers is lower than in other parts of Australia, but, nationally, it's about nine out of 10. What we need to understand is that future job opportunities, future job security, future career prospects and future wage increases for these nine out of 10 Australians—these 10.9 million Australians—working for private sector businesses depend on the future success, profitability and competitiveness of businesses here in Australia and their capacity to compete with businesses in other parts of the world.
And there's a long list of businesses who will be affected by this bill as amended by our proposal to carve out the four big banks, including Aurizon and JBS Australia, a meat-processing company which is headquartered out of North Queensland. I see Senator Ian Macdonald here, a proud LNP representative, representing, in particular, the great people of North Queensland. The managing director of JBS Australia is on the record as saying that a lower, globally more competitive business tax rate will enable them to invest in the expansion of their business and will enable them to hire more Australians. In fact, I see that in the gallery we have Renee Viellaris from The Courier-Mail, and I think The Courier-Mail might have reported the managing director of JBS Australia, earlier this year, making the point very strongly that the lower, globally more competitive business tax rate is critically important to securing future investment and future job opportunities and to ensuring that businesses here in Australia can compete with equivalent businesses in other parts of the word. Virgin Australia, Qantas, John Deere, Domino's Pizza, you name it—there's a whole bunch—these are not what you would describe as the nasty big end of town. These are big employers. These are businesses that provide job opportunities and job security to millions of Australians.
But if we make it harder for them to be successful, they'll hire fewer people. If we make it harder for them to be successful then more Australians will be unemployed. This is the core point, Senator Brockman, in answer to your question: if we keep the taxes on businesses with a turnover of $50 million a year higher by international standards, when countries around the world have substantially lowered theirs, then we help businesses in other parts of the world, who take business investment and jobs away from us. If we help workers in other parts of the world, they take jobs away from workers here in Australia. That is a fact. People talk about this proposition that somehow this is a benefit to some abstract people that nobody knows. Well, the abstract people that supposedly nobody knows are about 11 million Australians working for private sector businesses across Australia.
So, we've put forward the proposal to ensure that we have a corporate tax rate that is globally competitive for all businesses across Australia. But in order to give ourselves the opportunity to secure a consensus across the chamber we have put forward this amendment to carve out the four big banks. But we do believe that it's very important for all these other businesses to get the benefit of a globally more competitive business tax rate. And yes, people have made the point in this debate that this is just a headline tax and there are other taxes—individual states in the US will charge taxes as well as the federal government. Well, that is true in Australia, too. In Australia we've got federal taxes and we've got state taxes. But whatever the equivalent combination is, the headline US corporate tax went from 35 per cent plus other taxes to 21 per cent plus other taxes. That is a 14 per cent reduction in the United States, where most of our direct foreign investment into Australia to generate our future economic growth comes from.
Businesses in Australia will find it harder to secure investment out of the US into Australia if the after-tax profit in the United States is going to be higher than the after-tax profit for the same level of risk here in Australia. In the end, fund managers around the world will assess opportunities around the world. Capital is globally mobile. They will assess opportunities around the world across a whole range of indicators. But for the same level of risk they will look at where they can secure the highest after-tax return on their investment, and that is where the money will go. If we can't continue to attract it into Australia, because the after-tax level of return is materially lower here than it would be elsewhere, then the money will go elsewhere. And, as I've said, compared with the US and compared with Europe we have a much smaller domestic capital market. The United States and Europe—the European Union has a common market—have a much more substantial domestic capital market. But even in Europe—say, France: the President of France is hardly a right-wing ideologue. President Emmanuel Macron, when I first met him, was the minister for the economy in the socialist administration—the Parti Socialiste. Don't get yourselves upset by my using the word 'socialist'; they were literally the socialist administration of Francois Hollande. France, with Emmanuel Macron as their President, a left-leaning President—and he won't mind me saying it—is lowering their corporate tax rate from 33 per cent to 25 per cent by 2022 because they want to protect jobs in France, because they know that if they don't lower the corporate tax rate to 25 per cent in France they will help businesses in other parts of the world take business and investment and jobs away from France.
And France actually is in a safer position than Australia. Australia is more exposed. France is in the middle of Europe. France is in the middle of a 500-million-people market. Australia is a 25-million-people market with significant capital investment requirements in order to continue to develop our economy. France is an established economy in a large, 500-million-people domestic market. It is actually not as exposed to competitive pressures as we are. So you've got France going to 25 per cent. Scandinavia is meant to be the social democratic—
nirvana. Thank you very much, Senator Smith. Do you know who the Prime Minister of Sweden is? The Prime Minister of Sweden is a former Swedish union leader. He's a former leader of the equivalent of the ACTU in Sweden. Supposedly Scandinavia has this high-taxing, high-spending, high-welfare type of approach. Do you know what its business tax rate is? Twenty-two per cent! So you've got the United Kingdom, which has been going from 30 per cent, now to 19 per cent, on track to go to 17 per cent. You've got the United States under President Trump going from 35 per cent to 21 per cent. You've got France going from 33 per cent to 25 per cent.
Now, in Australia, we're not proposing to chase things down to the bottom. We're proposing to ensure that we don't lose touch with the average. We don't want to be left behind. We don't want businesses in Australia to be forced to carry burdens that their competitors in other parts of the world don't have to carry, because we know that, if we force businesses in Australia to carry burdens that their competitors in other parts of the world don't have to carry, the ultimate victims of that will be workers across Australia—11 million workers working in private sector businesses across Australia.
Some people would say, 'Oh, it won't really matter to the person working in the coffee shop or in the shopping centre or in the local grocery stores.' Well, it does because, if the big businesses end up hiring fewer people because they lose business, investment and jobs overseas, fewer people will go to cafes, shopping centres and grocery stores, and not only that; they'll buy fewer products and fewer services from small and medium-sized businesses here in Australia. And they'll end up hiring fewer people, and there'll be even fewer people going into coffee shops, restaurants, shopping malls and grocery stores.
The whole point is: we are one economy. If you deliberately weaken our global champions that are engaged in global competition, if you force our global champions to carry rocks in their backpacks that their competition in other parts of the world doesn't have to carry, you will slow them down. If you slow them down, they'll hire fewer people. If you slow them down, you help businesses overseas sell more of their products and services at our expense. And where are the jobs going in that circumstance? The jobs will be going to those businesses overseas and to the small and medium-sized businesses overseas that will supply products and services to them.
It is one issue. Senator Cameron says tax is one issue. Well, it's a pretty central issue; let me tell you. When fund managers around the world look at where to invest—let me tell you—the after-tax return is a key issue, and it happens to be an issue that we directly control.
I'll tell you: there's another issue. Sure, the profitability of a company like BHP or FMG and so on is also driven by how much they can get for their commodity exports. But, as it happens, we don't control what commodity prices are globally. We don't control what happens to global prices for our key commodity exports. So we are price takers there.
We control what happens with our policy settings. When you've got countries around the world lowering their business tax rates, it is completely untenable for us to have one of the highest tax rates in the world when we are an open trading economy that is globally focused in terms of opportunities but also globally exposed. (Time expired)
Minister, I do have some questions to ask you. The first question I'd like to ask—although it's probably not you who should answer this but perhaps Senator Cameron, if he could—is: why is it that Mr Shorten is clearly on record supporting these sorts of tax cuts? There's no doubt about it. When he was a minister, it was part of his proposal, his approach and his government's direction. I can't work out why it is he has now done a complete about-face. I'm wondering if the minister, or perhaps Senator Cameron, might be able to tell me what it is that changed Mr Shorten's mind. If Mr Shorten has explained that, then I've missed it. And, if I have missed it, perhaps Senator Cameron could—
Senator Cameron, will you be able to tell me why Mr Shorten changed his mind? Just a few short years ago he was very much in favour of this policy, but now he isn't. Did he give some reason? Is there some explanation as to why he's done a complete about-face on this particular policy? He and his Treasurer at the time, I think it was—
So Mr Shorten wasn't educated before, Senator Cameron? I don't quite understand your interjected answers to my questions. Perhaps you could get up and explain how Mr Shorten could just a few short years ago positively advocate for this policy when he's now done a complete about-face. I stand to be corrected, but I don't think he's ever given any explanation as to why he changed his mind, so perhaps you could tell us why that is, or perhaps Senator Cormann has seen some credible explanation from Mr Shorten on why a few short years ago this was his government's policy. He was an economic minister in a government that was advocating this—a government that Senator Cameron was part of for a short period of time. And I'm flabbergasted. Not many people believe Mr Shorten on anything, but we did hear him strongly advocating for his government at the time to introduce these sorts of tax concessions. Why? Because Mr Shorten understood that, to remain competitive, we had to meet the market, so to speak, with the rate of tax. So that's one of my questions, Minister, if you could answer it. If not, perhaps Senator Cameron could answer.
Earlier in the day in this committee stage debate, I asked about some Queensland companies which are not big companies by relative standards. JBS was one that you mentioned, Minister. It's a meat processor based in Townsville and it employs a lot of Townsville people—a lot of meatworkers. Brent Eastwood has, as you rightly pointed out and as was reported in The Courier Mail, called upon the parliament to support these tax breaks for his company and for other companies similar to his, because he understands the tough world of business. He has to compete with imported meat products, and it's very difficult for him to do that when he is paying a rate of tax greater than that paid by his competitors in other countries.
I also mentioned the case of Teys Brothers, which have meat processing plants at Rockhampton and Biloela. I can't speak for them. I haven't heard them say anything about this particular tax reduction, but I can make a pretty fair assumption that they also would be very much in favour of it, because, in the times I visited their premises at Rockhampton and Biloela, I was told that this meat processing business is a pretty tough business. They're always competing with imports from the Americas—mainly South America, as I recall—and they rightly say that they pay their workers in Australia properly, as they're required to and as they're happy to do, but they have to compete with workers in other countries who are not on the same wage scale and conditions as Australian workers. But they understand that and they still compete.
When it comes to taxation, here is a way that we can allow JBS and Thiess Bros to actually compete. Senator Storer, in his contribution earlier on, said that he couldn't see the advantage of it, couldn't see how this would be passed on to help Australian workers and Australian jobs. Could I suggest to him that he might give the managing director of JBS a call and hear why he thinks—
Well, Senator Cameron, these Australian businesses employ Australian people. Why would they disadvantage themselves by having to pay a tax rate that is far more than that of their competitors? I can never understand it, Senator Cameron. You keep saying you support the workers. The only—
The CHAIR: Senator Macdonald, I remind you to go through the chair.
Yes, I'll speak through you—thank you, Chair. I'm really just responding to Senator Cameron's disorderly interjections. But you're right. I'll resist responding to his interjections and speak to you. Of course, I hear from down in the corner—
The CHAIR: Senator Macdonald, if you would resume your seat please. Senator Whish-Wilson.
I want to thank Senator Cameron for going and giving instructions to Senator Whish-Wilson to call a quorum so that more people would come in and listen to the question I'm putting to the minister. So I thank the Labor Party and the Greens for filling up the chamber to listen to my words of wisdom—well, not really words of wisdom, but the serious questions that I'm asking the minister in relation to this.
I was indicating that Senator Storer couldn't understand how this would help Australian workers. But, as I say, I would ask him, really, to speak to some of the business leaders who do understand this—who have skin in the game, so to speak—and understand the importance of the Australian tax system being competitive with others.
I also raise the issue of some other Queensland companies. I'm sorry for being parochial, but I'm familiar with these Queensland companies. Senator Hanson, who's also from my own state, knows these companies. You know the Kilcoy processing company there. You know Teys Bros. You know JBS. You know the AA Company, another company involved in meat processing with substantial Queensland assets. Senator Hanson, like me, you understand and know these companies. These are not the huge multinationals. These are Australian companies struggling to compete in a very competitive world. As I mentioned before, they all pay their workers proper wages, as they're required to do in Australia.
Well, if they're not doing that, Senator Cameron, I don't know what you and your union mates are doing if they're allowing substandard wages to be paid. I know that's not true, of course, but you always scoff on one hand and, in doing that, you're clearly saying to your union mates they're not doing their job. I know they are doing their job, because all of these Australian companies I mention actually pay proper wages in accordance with the Fair Work Commission and the relevant awards. They're competing against countries with far lower wages. They're happy to do that, but we can help them by at least not requiring them to compete in the taxation area, where their competitors will be paying far less tax, as other countries understand what this is all about.
I also mentioned that in Townsville there's a bit of a difficulty in the labour market, if I can put it that way, with the closure of Queensland Nickel and the downturn of the mining industry generally. But there are two bright sparks in Townsville. One is the copper refinery owned by Glencore, which is one of the companies that are important here. That's why I'm concerned about Senator Hinch's amendment, in that these companies would pay a higher rate of tax than other competitors in Australia and certainly much more than competitors overseas. But I digress slightly. In Townsville we have Glencore, who run the copper refinery. We also have Sun Metals, a subsidiary of KoreaZinc, who a couple of decades ago, at the invitation and encouragement of, I think, the Fraser government, set up in Australia because we had cheap electricity in Australia in those days and they're big power users. They created the zinc refinery in Townsville, which employs a lot of people in the Townsville area, and they continue to try to expand their operations. But they have been struggling as well, mainly because of power prices, thanks to years of Labor governments, particularly state governments, who've been ripping off the energy market.
Senator Cameron interjecting—
Senator Cameron laughs at that. I know why he laughs: because he's in cahoots with the Queensland Labor government, who run the only generating supplier in North Queensland. It's a state-government-owned business entity. They gouge the prices and rip-off the businesses in North Queensland. They do that and pay the proceeds of their ill-gotten gains into the Queensland Treasury to try to help Senator Cameron's mates in the Queensland government to balance their books, which they never do, of course.
But Korea Zinc is one of those companies that would not benefit if Senator Hinch's amendment were passed, yet they are struggling to compete with zinc refiners elsewhere in the world. And the list goes on. I urge senators to have a look at the home-grown Australian companies—and there are certainly a lot of multinational companies on the list, who invest in Australia and we want to keep them investing in Australia, because they create jobs—that are trying to continue operating and creating jobs for our fellow Australians. If we can't compete in the taxation area, they are going to struggle to continue to exist. I ask particularly the crossbenches—I know the Labor Party is ideologically opposed to this now, but they weren't a few years ago when Mr Shorten was advocating this!—to have a look at the list of Australian companies that are trying to compete in a very difficult world in many areas where we can't have any influence. But we can at least compete on the tax front. So, I again ask the minister to elaborate on those companies, those home-grown Australian companies—Queensland companies, in my case—that will struggle to compete if we don't have a competitive tax rate. I wanted to speak further, but I know my colleagues have questions that they want to raise with the minister, too, so I will leave my contribution there, but perhaps later on the minister might be able to respond to some of the questions I have raised.
Firstly, I would like to explain to the chamber that my absence for the second reading division was simply unfortunate and not designed to give any further time to this debate, given my very clear stance on not supporting any further corporate tax cuts. We find ourselves with an amendment that Treasurer Scott Morrison claims was given to me last week. Let me make it clear to this chamber that I had not seen this amendment until it was emailed to my office at 12.09 pm today.
This week has been a complete shambles—an embarrassment to every Australian. You've got the Liberals knifing each other and Senator Cameron was caught dancing down the corridors with his air tambourine, singing Oh Happy Day. The people are over it. They're tired of every single one of you urinating their money up against a brick wall. If they could bang your heads against the same wall they would—both of you: Labor and the coalition. You have left the people in this country with a filthy hangover today. When I go shopping, people ask, 'Why can't the government help the farmers instead of these big companies?' They're right. The bulk of multinationals don't pay their fair share of tax in this country. People ask me, 'Why do we send billions overseas in the form of foreign aid?' It's a good question, isn't it, especially when every single one of you drives past at least six homeless people sleeping near Outback Jacks on Northbourne Avenue here in Canberra. And let's not forget the other 105,000 homeless people we have in this country. I've got cane farmers across Queensland, who want a code of conduct. Nothing else—no money, just surety for their industry, which employs tens of thousands of Australian workers and pumps $2 billion in cash through this economy. Why aren't we looking after those people? Aren't these tax cuts about saving jobs?
I'm tired of the people of this country sitting at their dining-room tables saying: 'Did you hear what those clowns in Canberra did today? They don't care about us.' They are talking about us. Tonight I'm voting with the lion's share of people in Rockhampton. I'm voting with the bulk of mums and dads in Tamworth. I'm voting with the majority of people in Coal Point, Townsville, Ipswich, Toowoomba, Beerwah, Bowen, Kilcoy, thousands of towns across my home state of Queensland and thousands more across the country. The majority of people don't want these tax cuts for businesses with turnover greater than $50 million. You know why they don't want me to support these tax cuts? You refused to fix the PRRT. Let me explain the PRRT. It is a tax imposed on the gas offshore in North West Australia. This is 15 per cent plus. Over the period of time that we've had the PRRT, companies like Chevron, ExxonMobil and Shell have now cumulated $290 billion in tax credits, so that they say they will not be paying tax in this country for a long time to come.
Countries like Japan are making more money in excise tax out of ships with our gas on them, around $3 billion, than we do. We made about $800 million off our sales of approximately $55 billion this year. You refuse to collect billions in royalties from Commonwealth waters. Qatar made $26.6 billion in gas and oil sales, and we made $800 million—and you're worried about investment in this country, that the multinationals won't come here unless we reduce corporate taxes? I don't think you have it right. The whole fact is they will come here, because they are not paying the right taxes in the first place. Why wouldn't they come here?
You refuse to acknowledge that our tax system is different to that of every other country. You made a reference to America, who dropped their rate to 21 per cent. Yes, but their state taxes are between two and 12 per cent on top of that. You don't refer to their different tax systems. You can't compare apples with oranges. Every country has a different taxation system. Just because they drop their taxes doesn't mean that we do. You say they are dropping it every year, and that other countries are going to drop it to 17 per cent. Is this a race to the bottom? Who can give the lowest tax rates, so that we don't lose the investment? If they are not going to pay taxes in this country, what are we losing? They are only more competitive for the Australian businesses here who are struggling and trying to do the right thing. America has lower wages. That's another thing. I'm definitely not advocating that we have lower wages in Australia.
What have your free trade agreements done? You have signed away the workers. You talk about more jobs, but your free trade agreements have allowed these multinational companies to bring in their own workers. You are destroying our own workforce. America has half-price energy. There's your problem. Reduce the cost of energy in Australia, so industries and manufacturing can compete, instead of escalating prices. America has 325 million people in their domestic market and, more importantly, trading partners on their doorstep. There are a combined 450 million people in Canada and South America that they can sell their products to. They have also applied tariffs to imports—fancy that! I recall a younger version of myself calling for tariffs 20 years ago. These countries protect their homegrown industries—in Australia, we tie our companies up in red tape—and flood our market with cheap junk.
As for suggestions on how to spend the money if you don't do this, because you're going to end up with about $4 billion in the coffers, what about long-term-vision projects, infrastructure projects like roads and rail? What about dams and the Bradfield water scheme, which would drought-proof our nation and help the poor farmers out there that are on their knees? What about the watering Australia program to bring the water down from the Territory, the Ord scheme, so we actually water Australia? These are projects that would make our country prosper and help those that are in dire need. This country is not going to grow or move forward if we don't provide the water that it needs. We have countries like Israel that have put in a watering project that can water their country. But we can't do it?
There is no vision in this country whatsoever for future generations. What about railway projects like the Carmichael mine and duplication of the Sunshine Coast Railway through to Nambour? Why aren't we duplicating the Bruce Highway from Brisbane to Cairns for tourism and freight? Coal-fired power stations to produce the dispatchable energy that we need to reduce the power prices in this country; hydro power like the Tully-Millstream project—why aren't we doing these projects? Where's the debate on nuclear energy? Why don't we do that?
I have respectfully listened to the government's arguments, and I do thank Senator Cormann for his good-natured negotiations. But I cannot support a shift in the threshold to increase further corporate tax cuts, carving out the big four banks. My question is: what about the other banks? They have to answer for the wrong they've done to many people across this country, and the damage and the heartache that they've caused. It's more than just the four banks.
My obligation is to the everyday people of this country and to ensure we start paying down the mounting debt. One Nation supported tax cuts up to a $50 million turnover. That's a cost to the budget of $35 million. We supported the personal tax cuts; that's another $144 billion. You want to pass these further corporate tax cuts; that's a further $45 billion. And you're talking about in eight years time. How do we know the state of this economy in eight years time? How do we know if this country will be able to afford it? How do we know who's going to be holding the chequebook—because I don't trust any one of you. I've seen it. Under Labor, when it changed over to the coalition, the country was in debt by about $270 billion. Now we're reaching nearly $600 billion. There has to be a debt ceiling put on, because someone has to curtail your spending. No-one's talking about future generations and how we're paying down this debt.
You talk about how it's going to create jobs. I'll tell you the only way you will create jobs in this country and get a better, higher wage increase: please work with your state counterparts and investigate reducing payroll tax, which is a bigger impost on business across the nation. That will—it will—stimulate jobs in this country. That's why I say to you that you can't guarantee corporate tax cuts are going to create employment and bring higher wages. For a lot of these businesses, what I hear all the time is that the biggest problem in this whole country is payroll tax. I know it's not a federal issue; it is a state issue. You have to work with the states to compensate them for slowly reducing the payroll tax, which will increase employment. Why would these businesses put more money into their companies and businesses through a corporate tax cut when they know that, if you create more employment and higher wages, that's going to put them over the threshold and they're going to be paying more in payroll tax? It needs to stop. Address your free trade agreements and stop these companies bringing in their workers from overseas—and that is actually happening. Ensure that we as a nation can afford this. You haven't proven that to me.
I'm worried about the future generations and the debt we are going to leave them. You can sit there and promise me all these things, but with all the deals that you may have done in this chamber with the other senators, there is no guarantee of who's going to be the Prime Minister of this country next week—whether or not it's going to be Malcolm Turnbull. If we go to an early election, are these deals going to be secure? They possibly won't be. So, I want to know that the future of this nation is in good hands. I don't feel that it is.
There are a few things that I need to address before we rise tonight. Firstly, in relation to the amendment we are discussing, to carve out the big four banks, I can confirm that the official minute was circulated today. But of course I did raise it in one of the many very good and constructive discussions Senator Hanson and I have had over the months. I did raise that with Senator Hanson last week. In relation to the oil and gas industry in Australia, it is a relatively less mature industry compared with Qatar's. Qatar has had massive investment, generating massive production of oil and gas, for decades and decades. We had the most significant investment. The oil and gas investment out of Gorgon, Wheatstone and Pluto is very recent. These are highly capital-intensive projects. Not only did the significant capital investment of well in excess of $100 billion lead to massive increases in construction jobs and massive increases in economic prosperity for Australia but they will do so into the future. As Senator Hanson knows—and we had consensus in relation to this earlier in the year—we were absolutely prepared to pursue sensible reforms to the petroleum resource rent tax arrangements, and we will still pursue those sensible reforms to the petroleum resource rent tax arrangements. But we of course explored in good faith with the Senate crossbench the opportunity to land a consensus around a lower, globally more competitive business tax rate that is manifestly in the national interest.
Senator Hanson asked us to convince her that we can afford those. Well, the figures are there in the budget for all to see. I mean, our performance against the budget for the last two years now has been better than what had been estimated when the budget was delivered. If you look at the trajectory over the medium term in terms of our budget forecasts and projections, we had forecast to return to balance in 2019-20 and to remain in surplus over the medium term to exceed a surplus of one per cent as a share of GDP by 2026-27, which is when the Ten Year Enterprise Tax Plan to reduce corporate tax to 25 per cent is designed to come into full effect. In fact, the reason we are not reducing corporate taxes for all businesses immediately is that we wanted to do it in a way that was fiscally affordable. We wanted to get the budget back into surplus as soon as possible while also making sure that businesses in Australia have the advantage and the benefit of a globally competitive business tax rate. Providing the signal to the bigger businesses with bigger turnovers that over the next few years the corporate tax rate for them would progressively come down to 25 per cent would provide them with the incentive to make investment decisions now in the knowledge that they will have an improved after-tax return on their investment.
It has always been thus. If you want to attract more investment, one of the key considerations is your tax policy settings. Countries around the world are not lowering their corporate tax rate out of fun; they're doing it because they're making a judgement that it is in the best interests of their economy, of families, of jobs created by businesses in their respective economies.
There is no question that the day will come when Australia will have to do this. Sadly, it looks as if we might not be able to get there on this occasion. If the Senate decides to vote this down today, it will become obvious in the years to come that it was a decision that exposed Australia to economic harm, that put us in a weaker position, that cost jobs and that put wage increases at risk. The day will come when, given what happens in the rest of the world in terms of business tax policy settings, this parliament will have to revisit this question—no question.
Senator Hanson talks about free trade agreements. That is something that used to have bipartisan consensus, I have to say. It was under the Hawke and Keating governments that Australia decided to open up the Australian economy to global competition, to position the Australian economy to be globally focused, because there was an appreciation and an understanding that there was so much opportunity for Australian businesses to sell Australian products and services around the world. You don't become rich by selling to yourself; you become rich and wealthy by selling your products and services to the massive global market.
Of course, on the flipside, for consumers, opening up our economy has delivered massive benefits to consumers, because it means that we can get the best products and services from other parts of the world at competitive prices. Prices in Australia would be higher, the quality of products and services would be lower, and there would be fewer jobs in Australia today if we had not opened up the Australian economy to the world, if we hadn't decided to become a genuinely globally focused open-trading economy. Becoming a genuinely globally focused open-trading economy has unquestionably lifted living standards across Australia. A commitment to open markets and free trade has lifted living standards around the world.
We have to accept that the world around us is as it is. We don't have a choice about the fact that businesses in other countries want to take business away from us. They want to sell more of their products and services to markets around the world at our expense. And, if they're more successful in selling more products and services that they have produced around the world, we will sell less. If the capital investment that could have come to Australia goes to Brazil, the US, Canada, New Zealand or France and doesn't come here then it will create jobs in those economies, in those countries. Over time, if we stay on that trajectory and don't adjust the trajectory to get ourselves into a more competitive position again, it will be working families across Australia who will pay the price. And the first people to pay the price will be low-income earners. People trying to get into the job market will be the first to pay the price, because they'll find it harder to get a job. People who are part of the casual workforce, who work part-time and want to have additional hours, will find it harder because those are the jobs that disappear first. As businesses have to shrink because the government's policy settings are making it harder for them to be successful, as bigger businesses have to cut costs because they are selling fewer of their products and services and attracting less investment, the first people who lose their jobs are those—
I know that for Senator Cameron this is all just one big joke. You know what? I actually care about this. I don't think anyone in this chamber—we might have disagreements; we might have a different perspective—can say that I'm prosecuting an argument that I don't believe in. I passionately believe that this is something we need to do to protect jobs, to create opportunity, for people to get ahead.
You can say that's rubbish, but let me tell you, I have seen what socialist agendas lead to. I've seen what equality-of-outcome type income distribution and wealth distribution policies lead to, and let me tell you: they lead to poverty. They make everyone poorer. That is not a path that any of us should want for the Australian people. We should want a path where the Australian people can have opportunities to be the best they can be, and part of that is making sure that the businesses that employ them have the best possible opportunities to be successful into the future. In the end, this is going to be voted on tomorrow, and I'd like each senator to think about this overnight and make a decision that is in our national interest.