David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Cormann. Can the minister outline the importance of tax reform for the Australian economy and living standards?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Earlier today the Senate passed a core part of the coalition government's plan for a stronger economy, more jobs and higher wages—a plan that is working as we have seen again today with the release of data in relation to the unemployment rate showing that the unemployment rate is down to five per cent. And that is important because, when we came into government five years ago facing a weakening economy, rising unemployment and a rapidly deteriorating budget position, do you know, colleagues, what the shadow Treasurer, Mr Bowen, said would be the test of whether we had succeeded or failed in terms of economic management? He said that we needed to ensure that the unemployment rate stayed below 6¼ per cent. So I'm looking forward to the speech later today by the shadow Treasurer in the other place in which he will recognise that the coalition government has indeed been the superior economic manager over the last five years, because not only have our policies delivered stronger growth—3.4 per cent growth in the 12 months of 2017-18—but also more than 1.1 million jobs were created under our government.

As a result of the legislation which passed the Senate today, there will be more investment, more growth and more jobs. And, as more jobs are created and the unemployment rate continues to go down and the excess supply in the labour market continues to reduce, wages will grow more strongly. Indeed, all of the respected economic commentators are already observing that there has been a pick-up in wages growth in recent times—something that we expect to continue on the back of stronger growth under the coalition.

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

Senator Bushby, a supplementary question.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

How has the government's prudent economic management allowed it to introduce these important reforms whilst still guaranteeing the services that Australians want and expect?

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

This is a government with a very strong track record of economic reform. Our economic reforms and our plan for stronger growth and more jobs have not only delivered better opportunities for Australians to get ahead but have also had a very beneficial impact on our budget bottom line. And do you know what happens when you have stronger growth and more jobs? You end up getting more revenue on the back of more people in jobs—not on the back of jacking up taxes, as the Labor Party wants to do, but on the back of more people in paid work. More people in paid work, paying more in personal income tax, means more revenue for the government—which we can then invest in the essential services Australians expect—and less expenditure on welfare payments as more people move from welfare into work. That is surely a good thing, and that is why in 2017-18 we delivered a budget bottom line $19.3 billion better than was forecast when the budget was delivered a year and a half ago.

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

Senator Bushby, a final supplementary question.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

What are the risks of not following the government's plan for tax reform and not growing the economy?

Murray Watt (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Barnaby Joyce! Look out, Barnaby is back!

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

Order, Senator Watt! Before I call Senator Cormann, Senator Watt, I have repeatedly asked for silence during questions. That was particularly voluble.

Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Earlier today the Labor Party decided, on this occasion, to back in the Liberal-National government's plan for lower taxes for businesses with a turnover of up to $50 million. If only they had done that in March 2017, in the absence of Centre Alliance senators here today, it would have been much better for the good health of former Senator Nick Xenophon. Labor fought us every step of the way back in March 2017 when we were trying to get the first three years of our Ten Year Enterprise Tax Plan legislated through this parliament. Labor didn't vote for it today because they believe in it. They voted for it because they made a political judgement that standing in the way of lower taxes for small and medium sized businesses would be a bad thing to do. Of course, Labor still wants to go to the next election with more than $200 billion in higher taxes, which would hurt the economy, cost jobs and be very bad for families around Australia wanting to get ahead.