Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

I inform the Senate that at 8.30 am today seven proposals were received. In accordance with standing order 75, the question of which proposal would be submitted to the Senate was determined by lot. As a result, I inform the Senate that the following letter has been received from Senator McAllister:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

'Building an economy that works for all, including making millionaires and multinationals pay their fair share; closing loopholes used by the top end of town; and giving tax breaks to workers, not big business.'

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each speaker in today's debate. With the concurrence of the Senate, I shall ask the Clerks to set the clock accordingly.

Helen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | Link to this | Hansard source

Deloitte Access Economics, in its latest Budget monitor, outlined the state of the global economy, which was quite positive. It says:

The rivers of gold are running, with the good news for revenues coming thick and fast:

But, even with a rosy economic backdrop, the Liberals have racked up record debt and left the budget in a far worse state than they inherited from Labor, which had a global financial crisis to contend with. Let me be clear: the government has run out of excuses for more than doubling the nation's debt. The Liberals' own figures show that, on their watch, net debt has more than doubled, to hit a record high of $354.5 billion. That's a $354.5 billion debt run up by this government. And gross debt has crashed through half a trillion dollars for the first time ever in the nation's history.

Instead of using the surge in revenue from this global upswing to help pay down their record and growing debt, this government, the Liberals, would rather give tax handouts to those who need them the least. Instead of building an economy that works for everyone, they choose tax handouts for the big end of town. Politics is all about choices, and I'm afraid to tell you that the Liberals are choosing tax concessions for the wealthy over everyday Australians, over better schools, over better hospitals and over renewable energy.

Those opposite are the worst economic managers we've ever seen. Instead of putting forward their own economic plan or policies, they would rather just fret and obsess over what we in Labor are doing in this policy space. But I guess that's what you come to expect when you have an incompetent government bereft of creditable economic or tax policy. They've been found wanting—that has been so stark and so clear about this government. The Treasurer, Mr Frydenberg, would rather run a ridiculous scare campaign about Labor's policies than come up with a policy of his own. This is quite telling from a senior member of a five-year-old coalition government. Remember the Abbott-Turnbull-Morrison government? They have no economic policy, and no plans for wages growth except cutting penalty rates. It has actually been a bit embarrassing watching the new Treasurer trying to walk and lie at the same time; obviously, proving to be a bit much and a bit awkward—

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Order! Senator O'Sullivan?

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

The senator just cast an aspersion on the Prime Minister by saying that he walked and lied at the same time. I mean, that has to be withdrawn. That simply has to be withdrawn.

Helen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | Link to this | Hansard source

On the point of order: I never referred to the Prime Minister, so that point of order is not relevant.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Order! Please resume your seat, Senator Polley. Senator O'Sullivan, I did not hear the remark in question. Senator Polley, if you made a remark that cast reflections on the Prime Minister then I do ask you to withdraw.

Helen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | Link to this | Hansard source

I never made any reflections on the Prime Minister at all. What I said—

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Order! Senator O'Sullivan, are you seeking the call?

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

I am. Let me refine my point of order. My apologies to the chamber.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Senator O'Sullivan, could you please resume your seat. Senator Polley hasn't finished.

Helen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | Link to this | Hansard source

What I was saying to the point of order, Acting Deputy President, was: I didn't refer to the Prime Minister. My comments, clearly, were about the Treasurer and what I said—and I think this is well within the standing orders—was that the new Treasurer trying to walk and lie at the same time was obviously proving a bit much and a bit awkward. I never referred to the Prime Minister at all, and I don't believe that is unparliamentary under the standing orders.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Please resume your seat. Senator Polley, it would be helpful for the chair if you had a think about what you said and withdrew the comment.

Helen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | Link to this | Hansard source

Then I'll withdraw that and I'll use some other terminology.

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

Please continue.

Helen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | Link to this | Hansard source

I withdraw the word 'lie', but what I will say is that those opposite obviously feel very, very uneasy about the truth being spoken in this chamber, because it was so obvious. The scare campaign that has been waged by the Treasurer and the fact that he has been less than truthful with the Australian people are obviously quite embarrassing for those on the other side. I'm sure many who are listening to this have seen on Twitter the video where the Treasurer has displayed his lack of ability in being truthful to the Australian community.

Every time Mr Frydenberg and the Liberal Party attack Labor's reforms to trusts, negative gearing and refundable franking credits, that is them choosing to maintain tax concessions that overwhelmingly benefit the wealthy over funding for better schools and hospitals—and I make no apology for that. I have a hot tip for those opposite, off the back of the Victorian election over the weekend, about trying to use old scare campaigns that didn't work in Victoria: they ought to take a good look at themselves and realise that the Australian public are much smarter than that. They're not going to succumb to the untruthful messages that the Treasurer and those on the other side speak about. Your doom-and-gloom predictions around sledgehammers and recessions are economically irresponsible.

I want to briefly touch on the Liberals' Women's Economic Security Statement, announced last week. Minister O'Dwyer's comments were too little, too late. They are a government that over the last five years have lurched further and further to the right, and now they are in panic mode after being decimated at the Victorian state election. The coalition's Women's Economic Security Statement does nothing about the gender pay gap and nothing about the retirement income gap, which is quite serious. There is no attempt to address that.

Only Labor has a plan for working Australian women, with $400 million to boost women's superannuation balances for a more secure financial future, including paying superannuation on Commonwealth paid parental leave. In our first 100 days we will restore Sunday penalty rates for up to 700,000 workers—great news for hundreds of thousands of women, particularly in my home state of Tasmania. Labor will take action to close the gender pay gap, including greater transparency and accountability for business and government, so that, if men and women are doing the same work, they get the same pay. We will introduce 10 days paid domestic violence leave to the National Employment Standards and $88 million for emergency housing—

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

Where's it coming from?

Helen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | Link to this | Hansard source

including funding for safe housing options for women and children fleeing family violence—and I'll take that interjection. We have costed all our policies because we actually put women ahead of tax cuts for the wealthy. And there will be proper funding for health and education services that all women and all Australians rely on.

Federal Labor are the only major party with a plan to reform the tax system and concessions, make them fairer and provide structural repair to the budget and to demonstrate how we will pay for better schools and hospitals as well as pay down the debts—something that the people on that side have failed miserably to do. Labor have made the tough policy calls, and we have been up-front about the need for structural budget repair and how we'll go about achieving it fairly and responsibly. Because of our responsible approach, we've been able to commit to delivering bigger surpluses over the forward estimates and substantially bigger surpluses over the median term. As I said, those opposite have blown out the budget and got us further and further in debt—the highest debt this nation has ever seen. That's under those people, who laugh and scoff at plans that are going to provide the Australian people with something better for their future.

As I said, politics is all about choice. Labor would prefer to invest in better hospitals, schools and TAFE than spend taxpayer money helping property speculators with their sixth or seventh investment property. Labor has the boldest reform agenda of any opposition in 25 years. What we are doing is putting our policies out to the Australian people. We're an opposition that are not afraid to share our ideas, our values and our plan for the future, unlike those opposite, who have lied to the Australian people countless times. They've let down pensioners. We know, when it comes to aged care, how they've neglected to look after the most vulnerable older people in this nation. We are happy to argue these reforms based on facts, but we would never let flirtation or poor analysis drift by without calling it out.

It's time the Liberal Party learnt the lessons of the Victorian state election and the recent by-election results and dropped the politics of fear and lies and their scare campaigns, like the one on Labor's reform to refundable franking credits. The Australian people are smart. They know when someone is trying to pull the wool over their eyes. Australians don't want the best tax loopholes in the world; they want the best schools and the best hospitals in the world. They want to know that their grandparents, parents and older relatives are looked after and respected with the best possible aged care. That's what they want from this government, but it has failed miserably. I don't believe Australians are going to be able to trust this government to turn the economy around and do something about stagnant wages. They are relying on the next election and electing a Labor government. (Time expired)

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

It's always enlightening to get a lecture from the Australian Labor Party around economic management.

Senator Polley interjecting—

No, it is. Often I have to prepare for a speech, but when I read the terms of this matter of public interest I was relaxed. I was totally relaxed because I can do this one straight off the cuff, Senator. Senator, what you should do—through you, Mr Acting Deputy President—is stay. You're going to get some real little lead ideas here about how to manage a good economy. Let's go back and reflect on the economy left for the Australian Labor Party at the end of Prime Minister Howard's reign. The debt was zero, for the first time in many decades. There was $60 billion dedicated to the Future Fund, and we had a healthy economy that was producing surplus after surplus.

The good senator raised the issue of surpluses. She said, 'We'll get more surpluses, bigger surpluses, quicker than this government.' Well, the last time we heard that—we didn't hear it once, we didn't hear it twice, we didn't hear it 10 or 20 times; we heard it 26 times! Twenty-six times the Labor Party declared, when they were in government, that they would produce surpluses. Of course, we know they didn't produce any. This is the party that decided the best investment this country could make, costing hundreds and hundreds of millions of dollars, was to put pink batts in the ceiling. This is a party that consistently demonstrates ignorance of the basics of economic management.

Let's talk about the attack made on the government with respect to reducing the amount of money—their money—that people have to pay the government in the form of taxation. It's not our money; it's their money. And what do they do with that money? I'll drop off to sleep here halfway through this, because I've had to say it here so many times. Corporations invest that money; that's what they do. That's what makes the economy go round. They invest it. They buy goods, they purchase services and employ people. They stimulate the economies in their regions, and then more people come off unemployment, which of course is a benefit to the nation and a benefit to the individual. Then they have a better standard of living; they can go and spend, and that promotes the economy further.

We know that employment is one of the cornerstones of a good economy. If you look at the figures under this government, you'll see that we've got the lowest unemployment rate in almost decades. Pound for pound, it's the lowest unemployment. They think I'm joking when I say that we are a party for the workers, but the coalition is now truly a party for the workers.

Deborah O'Neill (NSW, Australian Labor Party, Shadow Assistant Minister for Innovation) Share this | Link to this | Hansard source

That'll be the day!

Barry O'Sullivan (Queensland, National Party) Share this | Link to this | Hansard source

I know that this is a bit sensitive for you, Senator, but these are the facts. We had a motion in this place not 20 minutes ago supporting jobs in the coal industry—supporting the coal industry, supporting new investment in the coal industry. That's going to produce more jobs for these workers, blue-collar workers, workers of the union who support the Australian Labor Party. I hope they were watching when we saw the Australian Labor Party vote against a positive motion about jobs in the coal industry. That's what it was. We said: let's celebrate the jobs in the coal industry.

They supported the motion here earlier today to stop beef production in this country, not to minimise it or mitigate it; they want to stop beef production in this country, which, of course, is the policy of the Greens. Truly, we're seeing an emergence here: this coalition is getting tighter. It's getting tighter by the hour. We must have an election in the wind. We must be starting to have a little fiddle around talking about preferences, do you think? It's getting tighter. They are becoming one again. That's what the Australian people get. They don't just get the Labor Party. They won't just get the Australian Labor Party if there's a change of government; they will get a Labor-Greens government. We know what their attitude is to agriculture. Their big, sterling, touchstone policy last time was to stop the live cattle trade out of this country. Now they want to go a step further and stop beef production in the nation. They won't have to worry about exports of live animals; they want to stop the production of live animals. It's not just around beef. They can pick beef. They have already taken chickens on. They don't like chickens. They don't like sheep. They have called for the suspension of the live trade for sheep. You're a Western Australian, Mr Acting Deputy President Brockman. You know what will happen to those sheep. They will perish in the paddock. They will die an horrific death in the paddock. We have seen it with beef when the suspension of the live cattle trade happened. In a time when there were some climatic challenges around drought—normal droughts, big drought, I think the sixth biggest drought in about 100 years. We've had the millennium drought, the century drought. They all had a name; they all had a skirt and lipstick and a moustache. Of course this is the first one. There has never been any history about this.

This is the sort of rhetoric we're getting from people who want to manage the economy of this nation. The Greens-Labor alignment want to manage the economy. Last time, can I tell Australians, they left us—this is a great little sum—with a debt that was costing $1 billion a week to service. That's what they left the nation with. You wonder why there were structural deficits. It was $1 billion a week. They were borrowing a billion dollars a week to pay the interest on the debt. Even Mr and Mrs Stringbag in the suburbs understand what that means, when you borrow some money and then borrow some money to pay the debt. They absolutely know that at some stage the music stops. It's like with musical chairs: when you try to sit down there won't be any chair. You'll be flat on your back. That's what happens under Labor's economic management. It's $1 billion a week. A government's in for a term of 156 weeks. There are 150 members in the other place. Imagine this: if we didn't have to pay off Labor's debt, there would be $1 billion every electoral term that could be spent in every seat in the country. Think about it. You reflect on a division within your states and wonder what they could do with $1 billion. I know that where I live there's plenty they could do.

They want to talk about education, health, investment in aged care, the National Disability Insurance Scheme—fully funded under us, not funded under the Australian Labor Party. These are people with flowery ideas. I have run into hundreds of them. They are bootleggers. They have nothing. Most of these people don't even understand basic home economics. I remember the wonderful contribution on the economy here one time by Senator Ludlam, who's no longer with us, sadly or not. I went back to understand how he could get it so wrong. I looked up his senator's register. You know what he had on his register? This is a mature man who's been in a high-paying job for a lot of the time. He had put on his register one laptop and a pair of sandshoes. That was it. You need to go back and look at it. I've got it framed—a laptop and a pair of sandshoes after 23 years in the workforce in very good positions. And they have the hide to stand up and lecture my side in relation to economic management.

Well, I'll tell you what: we're stone deaf to what you've got to say, as are the electorate. They know. One of the most common things said to me as I move around the electorate and talk to people, when the issue comes to the economy, is, 'Labor can't manage money.' They're full of big ideas, such as the ones that were articulated by the senator in her contribution. They're full of ideas about how to take away negative gearing. They're full of ideas about how to attack self-funded retirees in this country with their franking credits. Many of these are long-term Labor people who have been wise: teachers, policemen, firemen or self-employed electricians. They are people who support the Australian Labor Party—not as much anymore, but they did support the Australian Labor Party—and who funded for their retirement. They didn't get along and just collect a pair of sandshoes and a computer. So I say to you, Mr Acting Deputy President, that I won't be lectured by the Australian Labor Party on issues of the economy, and I'm quite certain the good people of Australia won't be lectured by them either.

Peter Georgiou (WA, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Can I just begin by saying that it's great to see the Australian Labor Party's adopting a key policy and mantra developed by One Nation. Ensuring multinationals pay their fair share of tax is something that One Nation has been banging on about for some considerable time now. Let me take you back to some key points I made earlier this year when I introduced my private senator's bill which was aimed at ensuring greater transparency of what multinationals pay in the gas industry—which was voted down by the government and the opposition, by the way. By the end of the year, Australia will have exported $35 billion of liquefied natural gas. We will become, if we are not already, the largest exporter of LNG in the world. We allow companies to explore and produce the petroleum from our offshore reserves, and rightly so. These companies have invested hundreds of millions of dollars creating jobs for our workers. But the true owners of these petroleum resources are the Australian people, and it is only fair that the Australian people get fair compensation for their resources, which is why Labor introduced the petroleum resource rent tax, or the PRRT, back in 1988. Unfortunately, this legislation has failed, and we get no payment for the gas that drives billions of dollars of exports. Not only do multinationals not pay for the gas, but they also don't pay tax on profits made from the sale of this gas, because they create losses on paper. It is only fair that these petroleum companies, like other multinationals operating in Australia, pay their fair share of tax. Right now, the system is not fair.

The gas industry is worthy of more attention. The handful of companies that control our gas need to be held to account and to pay for non-renewable resources that they take and for the profits made from these non-renewable resources through corporate income tax. Australia is set to overtake Qatar as the largest exporter of gas in the world, but we will receive just a fraction of the revenue—$800 million compared to Qatar's $26.6 billion. That $800 million largely comes from the Bass Strait gas fields that supply Australia and are not for export. The very real possibility that Australia, as it becomes the world's largest exporter of LNG, may never collect any direct payments from its natural resources is simply embarrassing. Consecutive governments have failed the Australian people. Even countries that we give foreign aid to perform better in their resource revenue management than Australia. According to one report, Australia ranks 32nd in the world. We scored lower than Botswana and Ivory Coast. It is time for the government to act and stop the ripping-off of the people of Australia.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I'm very pleased to speak to this excellent matter of public importance. Labor want to bring back the fair go—that's the bottom line for our position—whereas the government are doing nothing to make this country more equal. It's true that we've had 27 years of continuous economic growth, but, when you talk to average Australians, as I do very often, you find that average Australians do not feel that they have been getting their fair share of the benefits of that economic growth. I do a lot of doorknocking. When you talk to people on their front doorstep, they know something is wrong with our system. They know that company profits are going well and that companies are doing quite well, but, when it comes to the wages of ordinary working people, there's something wrong with our system. We know that those opposite have ripped billions of dollars out of school budgets and hospitals across the country. They prioritise tax cuts for the top end of town, their big business mates and the big banks over everyday working Australians. We have a bigger, better and fairer tax plan to ensure that the benefits of Australia's unprecedented economic growth flow through to everyone in our country, not just the privileged few.

It's important to remind people that, in fact, Labor had much better and fairer tax cuts for the 10 million working Australians. Under our proposal everyone earning less than $125,000 a year would receive a bigger tax cut compared to under the Liberals' proposal. More than four million people would be better off by $398 a year, compared to the government's position. With Labor's tax refund a teacher on $65,000 would receive a tax cut of $928 a year, and a couple earning $90,000 and $50,000 respectively would receive a tax cut of $1,855 a year. The difference between the government and Labor on this particular issue could not be more stark.

When it comes to cracking down on corporate tax dodgers it's really interesting that the recent settlement that the Australian Taxation Office achieved with BHP of $529 million, in relation to their transferred pricing arrangements, was actually done under laws that the coalition voted against. These laws were passed by the former Labor government in 2013 and were opposed by the Liberal and National Party members on the grounds that they were retrospective. Really, Mr Morrison and Mr Frydenberg owe the Australian people an apology, because, if they had their way, the budget would be millions of dollars worse off. These laws were also used in the 2017 Chevron judgement handed down by the High Court, which saw $340 million added to the budget bottom line. The government will pursue the mythology that they're cracking down on tax loopholes, but, in reality, the hard work was done by the previous Labor government.

Under this coalition government debt is rising faster than it did during the global financial crisis. It does gall me, somewhat, to hear Senator O'Sullivan talking about debt in the way that he did, because it's quite clear that this government has blown net debt out by double. They have got quite a nerve to raise this particular issue. As I said, if they had gotten their way back in 2013, the multinational tax loopholes would be open and government debt would be even higher still. So the coalition really should get on board with what Labor wants to do in terms of multinational tax avoidance—that is, tighten debt-deduction loopholes used by multinational companies, cap deductions for managing tax affairs at $3,000 and close the debt-deduction loopholes to ensure consistent treatment in related party financing arrangements. I could go on; I've got so much to talk about when it comes to multinational tax avoidance. But, in conclusion, we have a strong reform agenda. We have the policies. The policies are informed, costed and transparent. We need a Labor government now to make sure that the benefits of our economic recovery and unprecedented growth flow through to all Australians.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I want to respond to Senator Ketter, who was talking about fairness and so on—amazing when it comes to the budget and the growing debt. Who in 2014 opposed budget tax cuts—better to take a bit of pain than severe suffering later on? It was Labor and the Greens who opposed tax cuts in this place where we could get the budget back into the black even quicker than we are now. Under Labor—talk about debt! Remember Treasurer Swan? How many years did he promise, 'Next year we'll be in the black'?

Senator O'Neill interjecting—

You don't know what black print on the bottom of the budget means, Senator O'Neill. You don't understand black print. All my life, Labor has sent us broke—whether it be back in the nineties in Victoria, South Australia, Tasmania or New South Wales. And look what they've done in Queensland. They're heading towards $80 billion of debt for the 4.5 million people living there. Of course, the nineties were the days of Mr Keating—borrow, borrow, spend, spend.

You've talked about investment, jobs, fairness and taxation. Let me take you back to a bit of history. On 1 January 2013, Labor brought in a tax bill and it meant this: if you had an income of more than $250,000 a year, including superannuation, you could not get a tax deduction for investing in a business. I found that out personally when I bought the farm with my wife Nancy. You could buy as many houses as you liked and negative gear them to get a tax deduction. And it still stands today; I hope we change it in the next budget. If you're a doctor, barrister, QC, solicitor, dentist or whatever, and you earn more than $250,000 total income and super, if you go to borrow some money to invest in a farm, a business to employ people, to grow, to export, to produce food or whatever, you cannot get a tax deduction. How crazy is that? The ones who can actually afford to invest in business are the ones who have no incentive to invest in business because, when they borrow money, they can't claim a tax deduction.

That is Labor's way of growing the economy—don't let those high-income earners invest in businesses; get them to buy houses. We could have bought houses. Any dentist, politician, doctor, QC or whatever could go and buy what they wanted by way of houses under Labor; but don't invest in business and grow the jobs and the economy—that would be very bad! As I said, that is a fact and it still stands today.

There was a great article by Terry McCrann just recently about Labor's negative gearing. What Labor plans to do with negative gearing, with the help of the Greens in the Senate, would hit both home owners and renters—nothing surer. Terry McCrann said: 'For the same time—and this shows how really dumb the whole exercise is—it wouldn't actually cut the big tax deductions investors get from negative gearing for a very long time.' That is to say it would very effectively hurt owners and renters but it wouldn't get the existing negative gearers. Terry McCrann continued: 'What Shorten and Bowen propose would be disastrous for everyone, including their own government's fiscal position. For anyone who owns a home, Labor will make it worth less. Labor's attack on negative gearing is one of the three policies that directly attack investors and investment. In combination, they would be devastating. The other two are a big increase in capital gains tax and reducing dividend franking credits.' The final line in the article said: 'It's the politics of envy and stupidity.'

Let's talk about the franking credits. Self-funded retirees put a lot of money aside. Interest rates are very low, so they buy shares. Those shares could be fully franked dividends they receive; the company's paid the tax to Canberra here. What does Labor want to do? Instead of giving them a rebate for that when they have a very small income, they are going to tax them again. Taxing them twice is the way they'll increase their 'fair taxation'. These are battlers—people who have reared their family, invested in a home or two, educated their kids and saved their money. They might be a married couple who have worked hard. They are the ones Labor is targeting. They were the people Labor used to represent, decades ago—working people. But it's not the case these days. They want to go after them. Why? Because they had a go!

When it comes to taxation, we know the $200 billion extra taxation Labor will bring in if they win government. We know what will happen to electricity prices. We are swimming in energy but we have the highest electricity price of OECD countries. Labor will bring in more of the same—renewable energy targets, more unreliable electricity, more cost, more expense for businesses and households. They call it fairness; I call it stupidity. (Time expired)

Tim Storer (SA, Independent) Share this | Link to this | Hansard source

This matter of public importance invites us to 'build an economy that works for all'. It was the two rounds of reform to the tax and transfer system of the Hawke and Howard years, along with the tariff cuts in the 1990s, that set up and continued the prosperity that Australia has enjoyed for more than a quarter of a century. Unfortunately, growth, productivity and wages have all started to slip in recent times, and Australia has become less equal. A paramount question for all policymakers should be: how do we restore a society in which prosperity can return to the levels Australians have come to expect and fairness to which they are entitled?

I believe that a comprehensive and fair reform of the tax and transfer system is a large part of the answer. It was behind my decision to oppose the government's company tax cuts on the basis that the modelling did not bear out the claims of the benefits they said they would provide for the community and the economy. I saw it as irresponsible to make such huge financial commitments and made the point repeatedly that $35 billion of revenue foregone would be better reserved for other purposes, not least to accelerate a return to budget balance and to repay debt. But there are other reasons as well—for example, there is evidence that spending on properly scrutinised infrastructure would provide a greater boost to growth as well as employment and wages and provide needed and long-lasting infrastructure for people in Sydney, Melbourne and other locations.

Then there is the question of welfare spending. For many months I've been pressing for an increase in Newstart and allied payments to a level that will ensure jobseekers need not live in poverty and will have the means to find work. This is not just an aspiration of the welfare lobby. No less an organisation than the Business Council of Australia has been stating since 2012 that the rate of Newstart allowance, at its current level, no longer meets a reasonable standard of adequacy and itself presents a barrier to employment.

What all this leads to is consideration of the state of the tax and transfer system. It's now two decades since there has been substantial action on comprehensive tax reform. That was, of course, the introduction of the GST. Since then we've had the landmark Henry review, with seven principal reforms and 149 recommendations, but none of these sensible proposals were acted on. The Gillard government did try to introduce the super tax on mining profits, but the introduction was hampered. That was just one element of the Henry review's recommendations. It's a reminder that tax reform is all but impossible if policymakers cherrypick the recommendations of expert panels.

The Parliamentary Budget Office pointed out this year that maintaining Commonwealth government revenue at recent levels as a share of GDP will lead to an increased reliance on taxes on labour income through the personal income tax system. The percentage of household spending subject to GST, for example, has fallen from 61 to 56 per cent, and fuel excise has fallen from 1.5 per cent to a little over one per cent. Then there is the question of resource rent taxes, which have fallen from two-tenths of one per cent of GDP to under one-tenth of one per cent of GDP. In short, according to the Parliamentary Budget Office, an array of taxes from GST, alcohol and tobacco, FBT, company taxes, and taxes on fuel products have all fallen as a percentage of GDP since the beginning of the century.

Mike Keating, a former head of the Department of the Prime Minister and Cabinet, has argued that the assumptions behind the government's fiscal projections are too optimistic and that there are good reasons to believe the rate of growth will not return to trend and nor will wages or productivity. He argued that commitments already made by this government imply the need for additional revenue to the order of three per cent of GDP and that, unless taxation revenue is sufficient to pay for functions like R&D, education, training, health and infrastructure and to maintain a socially inclusive society, the economic stagnation experienced over the last decade will most likely continue. This is an uncomfortable prediction but one which should make all parliamentarians sit up and take notice.

Comprehensive tax reform is never easy. It requires leaders with courage prepared to take the community into their confidence. It is not a goal that can be achieved with one speech or grabbing hold of one tax initiative. If we are to build an economy that works for all, fair, sustainable and comprehensive tax reform will be one of the most important building blocks.

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

I'm sure that I'm not the only member in this chamber who, over the years, has been told by voters that one of the things they're disappointed in about politics is the fact, or the view, that there's not enough between the parties on issues. I think that, at the coming election, this will be an example of a time when there is a vast difference between the different policies that are being put forward by the parties and the different visions for Australia that the parties hold. There is no area in which there is a greater difference between the parties about their vision for Australia than when it comes to the economy. Whether it be on matters of tax, on workplace laws, on education and training or on the key levers of building an economy for the future, there is a massive difference between the government on the one hand and the Labor opposition on the other. As I say, whether it's about tax, workplace laws, education and training or any of the other major economic levers that a government has, it is clear that the government, the LNP, is on the side of big business and the wealthiest individuals in our community and the Labor opposition is actually on the side of small and medium businesses, the average working family and subcontractors in this country.

Let's step through each of the major economic levers: tax, workplace laws, and education and training. To begin, tax is probably the best example, the easiest example, where you can see that this is a government that is obsessed with getting more money into the pockets of big business and the wealthiest individuals in our community rather than average working people or small businesses. We know that for months, in fact years, it was the Senate, led by Labor and backed by some of the crossbenchers, that resisted the government's repeated attempts to cut tax rates for big business. If the government had its way, we would have shelved billions of dollars towards big business—to the banks and the largest corporations in this country—to help them reduce their tax bill, funded by further cuts to education, hospitals and infrastructure right across the country. It was only because of the resistance shown by Labor senators, backed by crossbench senators, that we were able to stop the tax cuts for big business from going through.

We were, unfortunately, witness to many other pieces of legislation that the government put forward over this term which have reduced tax rates for the highest income earners in this country. On the other hand, Labor has actually put up initiative after initiative to try to reduce tax rates for low- to middle-income earners. If anyone's going to be getting a tax cut in this country, it should be low- to middle-income earners, not big business and not millionaires, who are the only people that this government seems to have as a priority when it comes to tax rates. Of course, a vast number of tax loopholes exist within our system at the moment which are overwhelmingly exploited by the highest income earners in our community, whether it be the tax havens that are established by the wealthiest individuals, whether it be the misuse of trusts to minimise tax, whether it be the ability to claim massive tax deductions for seeing your accountant or your lawyer to reduce your tax obligation, or whether it be your ability—and this is one I didn't even know about—to claim, as a tax deduction, a trip to your tax haven so that you can meet with your accountant and inspect your tax haven. You can claim the airfare that you incur as a deduction itself. That is absolutely outrageous, and most Australians would say it's outrageous. That's something that Labor wants to crack down on, and it's something that the government has shown no interest in whatsoever to try to fix.

On a whole range of tax matters, we see, time and time again, this government lining up with big business and with the highest income earners in our community rather than middle-income earners and low-income earners. It's no surprise that we see results like we did on the weekend in Victoria or, before that, in federal by-elections, where middle- to low-income earners are making very clear that they know this government is not on their side.

Wages and workplace laws is another area where average Australians have missed out, time and time again, from this government. We know for a fact that wages in this country have essentially stopped growing if you compare them to inflation. Inflation keeps going up, goods and services keep going up, people's bills keep going up, and wages are barely keeping pace with the increases that people are seeing in their bills and in the cost of living. This government has no answer for it. The only answer it can come up with is to give big business and employers even greater power to screw down working people and screw down the wages that they receive.

Well, Labor has a different view. Our view is that the only way to get the economy moving, growing in a way that benefits the entire community, is to make sure that average Australian working people get more money in their pockets through increases in their wages. That's why we've put forward a range of policies already, before we even get to an election campaign, which will go to the heart of trying to put more money in the pockets of average Australian working people by increasing their wages. We've tried repeatedly to reverse the cuts to penalty rates that were handed down by the Fair Work Commission and have been backed in repeatedly by this government. We want to reverse those penalty rate cuts and make sure that Australian working people get the wages they deserve. The best way to make sure that regional economies and economies right across Australia are ticking over is to make sure that people have more money in their pockets to go and spend in shops, in cafes, in restaurants—in the businesses in the community. Cutting people's penalty rates and making sure that they are paid less is doing harm to household budgets and it is doing harm to economic communities right across this country.

We've said that we want to crack down on the abuse of labour hire that we see particularly in many parts of regional Australia as well as in our big cities. It is outrageous that a worker can be engaged as a labour hire worker to do exactly the same work as someone who's employed on a permanent basis but get paid less and get worse terms and conditions in their employment. That has to stop. We recognise that there are times when, due to seasonal fluctuations in work, employers do need to bring on people on a short-term basis, including via labour hire. That's fine, but it is not fine for employers to keep engaging people as labour hire for the sole reason of reducing their wages bill. Again, it is bad for working people and it is bad for communities to have less money going in the pockets of working people.

We've also said that we want to review the abuse of casualisation, of casual employees. This notion of permanent casuals has gotten well out of hand and should not be allowed to continue. Again, there are times when people are legitimately engaged as casuals, but the idea that someone can be engaged as a casual year after year, when their working hours basically don't change, has to stop. People deserve more job security than that, and people deserve to go into work, to know what they're going to be paid and to know that they're going to be kept on from week to week.

It goes beyond working people as well. We want to do more for subcontractors. This is an issue that comes up repeatedly on the Gold Coast, where my office is based, where we see many, many construction firms go under, owing subcontractors money. All too often we see phoenix companies with directors who go from company to company, closing down their business, trashing their assets, leaving bills unpaid and leaving subcontractors in the lurch. That sort of thing has to stop as well. It's the same on education and training. The government's agenda is clear in imposing cuts to schools, to universities, to TAFEs, to training. It's Labor that actually wants to inject more money into that system to make sure that people have the skills that are going to be needed into the future.

As I said, from time to time you hear people saying that there's not enough of a difference between the parties. Well, in the coming election that is not going to be the case. There is a very clear difference between the parties on how the economy should be managed, and it is only Labor that is putting forward an economic agenda that has the interests of low- and middle-income earners at heart. The government is over there wanting to cut tax rates for big business, cut funding for schools, cut funding for unis, cut funding for training, make it more and more difficult for Australians to get a wage rise and make more Australian workers suffer penalty rate cuts, casual work and labour hire. That's the government's view. Over here, on the other hand, federal Labor is promising to crack down on the tax loopholes that only the wealthy are exploiting, to make sure that we have the money to fund our schools, our unis, our training and our TAFEs and to make sure that people have the skills that will be needed in the future. We need fair workplace laws, we need fair taxation systems and we need fair education and training, and it will only come from Labor. (Time expired)

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

It won't come as any surprise to you, Mr Acting Deputy President Williams, that, whilst I agree with Senator Watt that there is a vast difference between the parties, I disagree with pretty much everything else he said. As I've said in this place a number of times, this is a government getting on with the job, and it's the Labor Party who wants to play politics. I've spoken in the last few weeks of parliament on three MPIs, and each of them has been Labor trying to pivot to a more positive agenda; but in doing so they just reveal so many positive things that this government has achieved over the last few years.

What does this MPI talk about? 'An economy that works for all'. I was lucky enough to be out in the electorate of Fremantle late last week with our recently endorsed candidate for Fremantle, Nicole Robins. It's a great story, and she's a great person. She's 29 years of age and has been on the local government in the electorate of Fremantle for a decade. In going out and about, we met with some small businesses, the first of which, in answer to the question, 'What's the most important thing government can do?' said, 'Keep getting taxes as low as possible.' They gave extraordinary credit to this government for driving particular taxes on small and family businesses down as much as possible. Taxation remains a great area of concern for small business, but they acknowledge that this government has led the way in reform of our tax system, particularly for those small and medium-sized enterprises, and they trust us to continue to do so.

The MPI also talks about multinational tax avoidance and tax in general. This is a government that has followed through on multinational tax avoidance, has made significant inroads into making sure that things like transfer pricing and phoenixing activity are reduced as much as possible, for the very simple reason that if a company is not paying its fair share of tax that puts increased burden on others. Tax needs to be as fair as possible and as low as possible. This is a government that's been following through on that.

The difference with those opposite is pretty stark. Senator Reynolds would certainly be aware of the front page story in The West Australian this morning, 'Franking losers revealed'. Labor's proposed changes to franking credits will hurt many tens of thousands of individuals from our home state of Western Australia. In fact, up to 85,000 Western Australians would lose significant amounts of money under Labor's plan to double tax franking credits—on average, $12,000 a year under the ALP's policy. In the electorate of O'Connor, which is the large regional electorate in the south-west and south-east of Western Australia, more than 6,000 people would be affected by Labor's double taxation arrangements, including an example I've talked about before, a self-funded retiree in Albany. Glenn Diggins is his name, and he has said it's okay for me to use his name in this place. He is someone who has funded his own retirement, is not deriving a pension and is of very modest means. He doesn't have a large superannuation balance by anyone's estimation. He would have his income slashed by a third under Labor's policy. He would lose $10,000 out of around $30,000. That is an extraordinary thing for a party that claims to be champion of the underdog to propose. It's an absolutely shocking set of circumstances that we have with a potential Labor government coming to power. Nationally 900,000 people would be affected by this double taxation change. Around 200,000 self-managed super funds will be affected by the changes, 96 per cent of which have a taxable income of less than $87,000. This is like Mr Diggins from Albany. It's someone with a very modest income from their superannuation fund who is going to be hit significantly by this proposed change. This is not an abstract set of figures. This is someone's real income in retirement—someone who has done the right thing by this country, who has done the right thing by putting money away under a certain set of rules. They expect to be able to look after themselves into their old age and they want to be able to look after themselves into their old age, and they risk having one-third of their income taken from them. It's quite remarkable that we could ever see that.

What could be more important in 'an economy that works for all', as this MPI describes it, than the creation of full-time jobs? And that is where this government has succeeded so strongly—putting in place the circumstances that allow business to employ. The latest ABS job figures that came out just last week show that the economy has added more than 300,000 jobs in the past year, including 238,800 new full-time jobs. That is 238,800 people who are now in full-time work, who can support their families, save for the future and create a life for themselves in this country, which is the Lucky Country. This government is very proud that it has put in place the preconditions which enable full-time employment to stand at a record high of over 8.7 million people. The seasonally adjusted unemployment rate was steady at five per cent. This is the equal lowest rate since 2011. Again, the unemployment rate is such a positive reflection of (a) where the economy is currently at and (b) the positive result that is for individual Australians and individual Australian families. We should never underestimate or in any way downplay the importance of a job and what it adds to a person's life. It is a significant achievement, and this government is very proud that, since coming into office in 2013, 1.18 million jobs have been created.

I think everyone listening would acknowledge that higher taxes, which are what those opposite are proposing, will only have a dampening effect. They will have a dampening effect on the economy; they will have a dampening effect on the chance of more people getting jobs. When I was out and about with Nicole Robins in Fremantle, those small businesses were saying, 'We would love to employ more people, but we are concerned about a Labor government coming into power.' So we need to generate confidence for people to invest in their own business and their own lives, to employ people and to create those jobs of the future. In building the economy that we have today, that is exactly what this government has done, and the runs are on the board. We see it in terms of the growth figures for the economy. We see it in terms of the unemployment rate. We see it in terms of the number of jobs that have been created in the economy over the last five years. I think that it's very important that all Australians reflect on that as they consider where this country is heading into the future.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

The time for the discussion has expired.

Sitting suspended from 18:29 to 19:30