Senate debates

Thursday, 4 July 2019

Bills

Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019; Second Reading

9:43 am

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

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

TREASURY LAWS AMENDMENT (TAX RELIEF SO WORKING AUSTRALIANS KEEP MORE OF THEIR MONEY) BILL 2019

This Bill lowers taxes for hard-working Australians.

Our tax plan was carefully developed and it was detailed comprehensively in this year's Budget before being put to the Australian people at the election just six weeks ago.

The Australian people were presented with a clear choice between the Coalition's $158 billion of tax cuts and Labor's $387 billion of higher taxes.

They delivered their verdict loud and clear in favour of our tax plan and rejecting Labor's tax hikes.

Values drove our policy, with Liberals and Nationals wanting to put more money in people's pockets, reward effort and encourage aspiration.

This Bill delivers on that commitment, a further $158 billion of tax relief.

Our tax cuts provide both short-term relief and long-term reform.

Australians earning up to $126,000 a year will receive up to $1,080 with more than ten million Australians better off.

This means that a couple, say a teacher and a tradie, each earning $60,000 a year, will get $2,160 in their family wallet.

This tax relief will boost household incomes and ultimately household consumption, which will be good for the economy.

In 2024-25, the Government will reduce the 32.5 cent tax rate to 30 per cent. This will accompany the abolition of an entire tax bracket, the 37 cent tax bracket, which we have already legislated.

The longer term structural reform will mean hardworking Australians will face a single marginal tax rate of 30 cents in the dollar on the taxable income they earn between $45,000 and $200,000.

Someone who moves up the income scale getting a promotion, working more hours or taking a second job will under these reforms get protection from bracket creep.

This will improve the incentives for working Australians and reward effort.

As a result of the Government's plan, around 94 per cent of Australian taxpayers are projected to face a marginal tax rate of 30 per cent or less in 2024-25. This compares to just 16 per cent if stages two and three of our tax package didn't go through.

Around 13.3 million taxpayers will pay permanently lower taxes by the time the Government's plan is fully implemented.

The Government's personal income tax measures will increase aggregate household income by around $8 billion each year over the forward estimates period. This will help to support consumption growth. Given that household consumption makes up around 60 per cent of the economy, the Government's plan will help support economic growth.

Lower taxes will increase the financial return from work, with higher take home pay helping to encourage workers to re-enter the workforce, or work additional hours if they wish.

It will also tackle bracket creep that sees workers hit with a higher marginal rate as their wages go up to compensate for inflation.

Our tax relief measures will keep taxes as a share of GDP within the 23.9 per cent cap ensuring that we don't impose an increasing tax burden on hard working Australians. Securing future tax cuts now will provide confidence to Australians that they will be rewarded for their hard work and helps to protect their future pay increases from bracket creep.

The Government is committed to delivering a tax system that rewards effort and aspiration. A tax system that promotes opportunity and drives investment and growth. A tax system that underpins a strong economy and opportunities for all Australians, now and in the future. A tax system where all individuals and businesses pay their fair share, so that the Government can guarantee the essential services Australians rely on.

The Government's plan will maintain a progressive tax system. It is projected that in 2024-25 around one third of all personal income tax will be paid by the top 5 per cent of tax payers, a slightly higher proportion than what they currently pay.

Schedule 1 to the Bill enhances the current low and middle income tax offset (LMITO) by increasing the base offset from $200 to $255 and the maximum benefit from $530 to $1,080 for the 2018-19, 2019-20, 2020-21 and 2021-22 income years. Schedule 1 of this Bill also increases the amount of the low income tax offset from $645 to $700 from 2022-23.

Schedule 2 to the Bill increases the top threshold of the 19 per cent tax bracket from $41,000 to $45,000 from 1 July 2022. It also reduces the 32.5 per cent rate to 30 per cent from 1 July 2024.

The Government's first legislative priority for the 46th Parliament is consideration of the Government's tax cut plan we took to the election.

I call on the Parliament to respect the wishes of the Australian people so tax relief can flow to Australians quickly.

Promptly pass this Bill this week. Pass it in full.

Lower taxes are part of the Government's plan for a stronger economy.

Full details of the measures are contained in the Explanatory Memorandum.

I commend this Bill to the House.

9:44 am

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | | Hansard source

The Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 seeks to legislate the government's income tax cuts announced earlier this year as part of the 2019-20 budget. Labor's position on this bill has been informed by three key principles, as outlined by my colleague in the other place Dr Jim Chalmers: firstly, that the economy needs a boost right now; secondly, that every worker should get a tax cut this parliamentary term; and, thirdly, that it's irresponsible to sign up now to $95 billion worth of expenditure that's not due for another five years without knowing what the economy or the Commonwealth budget will look like in 2024-25.

Before going on and detailing Labor's position on this bill, it's worth looking at what's happening in the economy right now and why we believe that our position on this tax bill is in the national interest. There is no doubt that the economy is struggling on this government's watch. The latest national accounts reveal the slowest economic growth, in terms of annual growth, since the GFC that occurred a decade ago. Those same national accounts show that Australia is now in the longest per capita recession since the 1982 recession. The national economy has fallen from the eighth fastest growing in the OECD in 2013 to the 20th today. Wages, which we know have been growing at record levels for some time, are growing eight times more slowly than company profits. There is rising underemployment and youth unemployment. Overall, there are 1.8 million Australians looking for work or looking for more work—that's 1.8 million people. We've seen five years of weak productivity growth, and productivity as measured by GDP per hour worked has fallen for four consecutive quarters. The RBA has acknowledged that household consumption is weak and has had to respond with two interest rate cuts in two months. The cash rate, now at an unprecedented one per cent, when it was three per cent back in the heat of the GFC, was apparently, according to this government, already at emergency levels.

So there is no doubt that the economy is floundering, with the very real consequence that households across Australia are feeling it. Pensioners and superannuants, who rely on interest rates to help bolster their incomes, are feeling it, too. After six years this third-term government can't continue the facade that they are good economic managers against this backdrop of facts. On Tuesday night, the Reserve Bank governor, unusually and publicly, pleaded his case that monetary policy couldn't do all the hard work. This 'nothing to see here' government has to respond, because right now they are the only people in Australia who think this economy is performing well.

That is why Labor's position and the amendments we will move today are about providing a boost to the economy now. That's why Labor supports stages 1 and 2 of the government's plan. It's unfortunate that the government voted against our amendments to bring forward part of stage 2 in the other place, because it simply confirmed that the government thinks tax cuts in five years time are more important than tax cuts that could start right now. But in this chamber, where the government doesn't have majority control, the Senate can take a responsible and constructive approach and support the position Labor is outlining today.

Schedule 1 of the bill deals with stage 1 low- and middle-income tax offset changes, which supplement the changes announced by the government last year. For the 2018-19, 2019-20, 2020-21 and 2021-22 financial years, the bill seeks to increase the amount of low- and middle-income tax offset, or LMITO. The base amount would increase from $200 per year to $255 per year and the maximum amount from $530 to $1,080 per year. This increase will mean that taxpayers with taxable incomes of between $48,000 and $90,000 will be eligible for the maximum offset of $1,080. The Labor Party supports this increase to LMITO. This increase is very similar to Labor Party policy that was announced last year. The Treasury said on Tuesday that people would start seeing this increase from next week if this bill is passed today. Well, we'll hold the Treasurer and the government to that, especially as they have already broken their pre-election promise that these tax cuts would be paid by 1 July.

Labor completely understands the need for getting these tax cuts into the hands of those who need them the most as soon as possible. The national economy is floundering. Working people have had to endure an extended and ongoing period of low wages growth. Prices are going up, and many Australian families are hurting because of it. The increase to LMITO is needed. It should have been dealt with by 1 July, but the sooner that money gets into the hands of eligible taxpayers the better. So the Labor Party has no issue with this element of the bill. As I said previously, these tax cuts will be provided to those who need them most.

Stage 2 in this bill has two elements to it. Firstly, there is the increase to the low-income tax offset that is in schedule 1 of the bill, which increases the value of the LITO from 1 July 2022 from $645 to $700 and changes the associated taper rate for that offset. The LITO applies to taxable incomes of up to $66,667. This increase to the LITO, along with the increase to the top threshold of the 19 per cent income tax bracket—which I'll come to in a moment—is meant to continue the tax reduction provided by the LMITO once it expires at the end of 2021-22.

Secondly, stage 2 of the government's bill seeks to increase the top threshold of the 19 per cent income tax bracket from $41,000, which was legislated last year, to $45,000, from 1 July 2022—in three years time. The Senate may recall that, in last year's changes, the top threshold for the 32½ per cent tax bracket was lifted from $90,000 to $120,000, taking effect on 1 July 2022.

Labor wants to ensure that all Australian workers get a tax cut this term of parliament, which is why we will be moving amendments, later in the debate, which seek to bring forward the lifting of the tax bracket from $90,000 to $120,000 this financial year. Our amendment, if supported today, would mean that every Australian worker would receive a tax cut in this term of parliament, instead of having to wait three years until 2022-23 to see any benefit from this proposed tax package being put forward by the government today.

Let me turn now to stage 3. The Labor Party does not think it's responsible to sign up to stage 3 tax cuts in this bill now. These tax cuts will cost $95 billion over the medium term and are not intended to come into effect until 1 July 2024—five whole years away.

Two weeks ago, we respectfully asked the government to consider separating the tax package so that the parliament could pass the elements where there is agreement—namely, stages 1 and 2—and bring back stage 3 of the tax cuts at another time of their choosing for the parliament to debate. An approach like this would've allowed the tax cuts due this parliamentary term, and every tax cut that is due this parliamentary term, to pass quickly and with near unanimous support—a good outcome for the government, the parliament and, most importantly, the people we are elected to serve.

Unfortunately, the government rejected this constructive approach outright, and instead will have to make arrangements—or deals, or whatever you want to call them—with the Centre Alliance and others to get the entire tax package through. I should also point out at this stage that the government promised not to do any of those arrangements or deals, which is exactly what they are doing now—all because they refused to work with Labor to get these tax cuts through.

So why does Labor have significant and serious concerns about locking in stage 3 now? Primarily, it's because we think it's irresponsible to sign up to $95 billion worth of expenditure from the budget now, five years before it's due. It appears that the stage 3 tax cuts are the government's highest priority, as they're prepared to sacrifice badly-needed tax cuts right now in order to protect tax cuts that occur outside the forward estimates.

I don't need to tell senators that $95 billion is a lot of money. That's $95 billion over six years, starting at a cost of $12½ billion in 2024-25 and growing to $18.9 billion by 2029-30. For comparison, that $12.5 billion in 2024-25 is more than the government will spend this financial year on government schooling, which is $8.3 billion; universities, at $9.9 billion; or the childcare subsidy, at $8.3 billion. That's just to give you an indication of how much that expenditure actually is.

And, most importantly, we simply don't know whether this $95 billion tax cut is actually affordable. How is the government paying for it? The government hasn't explained how they will pay for it. They've avoided answering the question. And I don't think, and Labor doesn't think, that this parliament should blindly accept that it will be able to without locking in substantial reductions in other areas of government activity.

What little information we do know about the government's future budget management approach can be found in the budget papers. We know that the government has an arbitrary tax cap of 23.9 per cent. We know that the government is projecting growing surpluses as a percentage of GDP over the medium term. We also know that the government is projecting reduced spending, dropping from 24.6 per cent of GDP this financial year to 23.6 per cent of GDP by the medium term. So, while the government is asking us in this place to lock in $95 billion in extra expenditure, it is also saying, 'We are going to cap revenue increases, reduce spending and increase our surplus.' It just doesn't add up without an explanation of what services this government is going to cut.

Senators are well within their rights to ask how the government intends to pull this off—bigger surpluses, reduced spending and a cap on tax revenue. If the government is asking us to support $95 billion in extra spending, what and how much government spending needs to be reduced to pay for this to reach the government's other fiscal goals? How realistic is reducing government spending from 24.6 per cent of GDP this year to 23.6 per cent by the end of the medium term? Whilst spending as a percentage of GDP has averaged 25 per cent over the last five years, what the government is talking about is that it intends to spend far less than recent historical trends, and it is seeking the parliament's support for that approach.

How realistic is this when our ageing population is going to place more and more pressure on the budget, rather than less? The Grattan Institute states that, in order to get these projected spending levels, real spending growth would need to average about 1.3 per cent per annum over the decade or 1.8 per cent if the economy performs as strongly as the Treasury projects. Either way, this is substantially lower than any previous government has achieved. So does the government expect growth in health spending to fall? Maybe it's defence spending. Maybe it's spending on veterans' health. Maybe it's spending on education. Is the government really serious when it projects that health expenditure will grow at only 0.7 per cent per annum? Is 0.7 per cent for health growth really realistic, despite historical growth being much higher than that? Do the states agree with this approach? I bet you they will all have a view when they realise what this actually means for state and federal relations in the medium term.

Whilst it's easy for some, it seems, to push these spending reductions off into the distance by saying, 'Don't worry, it is five years away; everything will be okay,' Labor can't take that view. To do so would be irresponsible and let down millions of Australians who rely on government services. We think the government should be up-front at a minimum about how it intends to pay for these tax cuts, and it should up-front about what its projected spending reductions will actually mean. These are all spending reductions that are assumed in the budget in order to pay for these tax cuts, but we don't know what they are and we don't know what effect they will have on essential services. The government wants the parliament to sign up to tax cuts that commence half a decade away, when we simply don't know what the state of the budget will be, we don't know what the state of the economy will be and we certainly don't know how these tax cuts—$19 billion of them when they are fully implemented—are actually going to be paid for. As the leader of the Labor Party has pointed out, it's a 'triumph of hope over economic reality'.

In coming to our position on this bill, the Labor Party has tried to play a constructive role to help fix the Liberals' economic mess and provide tax cuts to all Australian workers at a time when that fiscal stimulus is so badly needed. We compromised on the tax package by changing our position and coming towards the government. But this arrogant government refuses to put the national economic interest ahead of its political one. Australians want their parliamentary representatives to stop the pointscoring and political difference and, where possible, carve out common ground, to come together where we can and put the national interest—and, in this case, our economic and budgetary interests—ahead of anything else. Labor has done just that. We have compromised and we ask that the government do so too.

Our amendments to the tax bill, which will be moved later in the debate, would fast-track planned tax cuts now and also seek a discussion over increased infrastructure investment to boost the floundering economy, which is growing at its slowest rate in 10 years. We want to expedite investment in already planned infrastructure projects and bring forward a part of the stage 2 income tax cuts, as I flagged earlier, so that up to $1,350 a year in tax cuts could be provided for workers earning above $90,000, three years ahead of schedule. Our proposal is the only one before the parliament that gives every Australian worker a tax cut in this parliamentary term. The government's plan does not.

In the committee stage, I'll be moving amendments on behalf of the Labor Party that do a couple of things: bring forward to 2019-20 the $90,000-to-$120,000 threshold change and carve out the stage 3 changes from the bill, with a consequential fix to a table in the tax act. I now move the second reading amendment that has been circulated in my name and that also addresses these issues:

At the end of the motion, add:

", but the Senate is of the opinion that:

(a) measures that begin in the 2024-25 financial year should be removed from the bill because it is not responsible to sign up to $95 billion of tax cuts that do not come into effect for five years; and

(b) the Opposition's plan would support the economy now, providing income tax relief to every Australian worker from the 2019-20 financial year and bringing forward infrastructure investment".

The Senate today has an important job before it. We acknowledge that tax cuts are needed for workers in the economy. We want the tax cuts in stage 1 to flow as soon as possible. The government has already broken the one promise it made, by not having them in place by 1 July. We don't want to hold them up. We want to see that cash flow. But we do think the Senate has a role in putting pressure on the government and putting on the record—which I've done today—our concern about what locking in stage 3 means for the years ahead. It is the job of the Senate to scrutinise this.

The job of the government is to say where that money is coming from, how those tax cuts will be paid for and whether there's a commitment from the government not to slash essential services to the Australian community in order to pay for them. A cynical person would say that the reason these tax cuts are timed so that they sit outside the forward estimates is so that we can't actually see how the government is booking this expenditure and what it is doing to pay for it. Let's put aside that cynicism. The government should be able to inform the Senate today how this will be paid for and whether there is a commitment from the government not to cut services. The Senate should be asking these questions.

Later in the day we will be moving the amendments I have foreshadowed, to bring forward what we think is the most constructive and responsible approach that this parliament could show based on the performance of the economy right now. I hope that other senators will support Labor's position.

10:02 am

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

Members in this chamber might remember Joh Bjelke-Petersen's horrific vision for Australia. At the heart of his vision in his 'Joh for Canberra' campaign was the notion of a flat tax. That's what Joh campaigned for. Back then he was ridiculed. He was laughed at. He was told that this does not represent the Australia that we believe in. And, today, Joh's vision for Australia—flat taxation, dog-eat-dog, a place where, if you've got a job and you're doing well, the government will look after you and, if you're down on your luck, well, tough luck—is the vision that is emerging as the political consensus within this parliament. Apart from the Greens' strident opposition in this parliament, that is what we are seeing as the emerging consensus position.

These tax cuts are completely at odds with the notion of an egalitarian Australia. We know what they'll do. They'll rip billions of dollars out of our budget. They'll gut our schools and hospitals. They'll stop us from looking after people on Newstart. They'll prevent us from spending the money on infrastructure to modernise our energy system and our transport system. They are going to turbocharge economic inequality in this country. Scott Morrison wants Australia to become Trump's America, with their rampant inequality. He wants to create a permanent underclass of working poor, a privatised health system and massive student debt. That's what happens when you rip billions of dollars out of essential public services and hand it to the wealthiest Australians. This is a disgrace and it is being supported by Jacqui Lambie and Centre Alliance. They're all for it.

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

Senator Di Natale, I ask you to refer—

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

By Senator Lambie and the senators from Centre Alliance. They are trashing 100 years of Australia's proudly progressive taxation system for their moment in the spotlight. I say to Centre Alliance, who aren't in the chamber here today: don't you support funding for schools and hospitals? Don't you support pensions? Don't you support infrastructure? Doing all of that in the name of reducing gas prices, some promise on the never-never—you fell for that?

Centre Alliance like to position themselves as a party of the Centre. When you support an anti-union agenda, when you get behind tax cuts for big companies—as they did in the previous parliament—when you support greater media concentration and when you lock in $158 billion in tax cuts that flow to people on high incomes, there's nothing centrist about that. That is the neoliberal hard-right agenda of the Liberal Party, and maybe you should consider where you sit in this chamber.

It's remarkable that this legislation has never even gone off for an inquiry. The house of review will be moving today to send this legislation off for inquiry. Nick Xenophon must be turning in his solicitor's office right now at the thought that procedural fairness is being thwarted by his parliamentary team. It's one of the most significant pieces of economic reform in this country and it has not even gone before a thorough Senate inquiry. If you're in Mayo, the seat currently held by Centre Alliance, just 2.1 per cent of that community earn over $180,000 and yet they will be the greatest beneficiaries of stage 3 of this tax cut—$30 billion flowing to the top two per cent of that electorate.

I very rarely give credit to Senator Hanson. We have very few things in common, but even Senator Hanson sees that only 1.8 per cent of regional Queenslanders earn above $180,000 and that the Prime Minister's electorate of Cook has as many people earning $180,000 as the regional Queensland seats of Maranoa, Dawson and Capricornia combined. As for Senator Lambie: if you live in Bass or in Braddon and you're earning over $180,000, you're in the top one per cent of people. And $30 billion from this package flows to only one per cent of people in those electorates—the electorates that she purports to represent.

In exchange for giving millionaires tax cuts, schools and hospitals in Tasmania will be starved of funds. Support for veterans, who Senator Lambie purports to represent—money will be ripped out of the budget, money that could support people again. Every aspect of public investment is on the chopping block because of this disastrous decision. Of course, Scott Morrison

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

Senator Di Natale, refer to the Prime Minister by his appropriate title.

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

The Prime Minister is playing the opposition like a fiddle. According to reports, you've got Labor frontbenchers saying the party is 'politically dead' if it blocks tax cuts, and they're urging the Leader of the Opposition, Anthony Albanese, to 'regain the faith' of tradies by backing them. Let's call a spade a spade here. Most tradies don't earn $180,000 a year, and yet $30 billion is flowing to people on over $180,000 each year. Everyday workers aren't going to be the beneficiaries of stage 3 of these tax cuts, and this is the biggest proportion of funding in this package. The median income of working Australians is $58,000. A third of adults aren't actually in work. So when you put those two things together, according to the ABS, the typical Australian's income is actually $37,000. If you abandon all of your beliefs about working people, about fairness and about the opportunities for them, well, in my mind you're already politically dead. What do you stand for? A hundred years of campaigning for progressive taxation and in a moment that will be undermined because of a decision of this parliament.

Thirty per cent of stage 3 goes to the wealthiest Australians and $95 billion will be ripped away from government revenue. Let's actually look at some of the things that we could be investing in today. Imagine that this parliament came together today, took the revenue that's been ripped out of our budget and said, 'We want to create a different Australia.' Here are some of the things that we could be doing: every Australian in this country could have Medicare funded dental care at a cost of $44.9 billion, which is less than a third of what is being proposed in these tax cuts. Going to the dentist in Australia could become just like going to the doctor—bring out your Medicare card and you get dental treatment. We could raise Newstart by $75 a week. You want to stimulate the economy, raise Newstart. You want to make sure that no-one in Australia sleeps rough and that everyone can put food on the table, raise Newstart. That's $55 billion, again, just over a third of the cost of this tax package. We could have free child care for 80 per cent of families in this country if we made a decision to do that, and we could do it at a cost of less than half of this package at $77.3 billion. We could lift all public school funding to meet the necessary resourcing standard—$30 billion—making sure that our public schools get the support that they need. We could create thousands of jobs in restoring our environment and addressing our extinction crisis—real jobs, employing people not to destroy the environment but to care for it, to look after it, to nurture it, to rehabilitate it at a cost of $20.3 million under our proposal. Home care packages for older Australians: $23.4 billion. We could build half a million affordable homes and address the homelessness crisis in Australia for $84.4 billion, which is just over half of what's being proposed here today. There's so much more we could do, including high-speed rail along the east coast. There are so many nation-building projects we could do. We could modernise our energy system and improve our public transport system. This is the future that this parliament is turning its back on, and to do what? To support the lie of trickle-down economics. We know wealth doesn't trickle down. We know it flows up. It rushes up, and we're going to concentrate more and more wealth into the hands of fewer and fewer people.

Before the election, the Labor Party were resolutely against most aspects of this tax package. The final wash-up of this election is that a couple of seats changed hands, yet we're behaving as though the Morrison government has a mandate for these tax cuts. I say: where is your mandate? What was close to people's minds wasn't your agenda for tax cuts. It was the lie about death taxes. It was the confusion about retiree taxes and home taxes. It was uncertainty about what the future held if there was a change of government. I deeply hope that the Labor Party won't take away the wrong lessons from the election campaign. If people want to vote for a watered-down version of the Liberal Party, why wouldn't they vote for the real thing? If you want to turbocharge inequality in Australia, we know where you want to park your vote. Stand against these changes. We know what the Labor Party said in the lead-up to the election. Chris Bowen, at the time the shadow Treasurer, made it very clear that the tax cuts were regressive. He said that the $95 billion was poorly targeted, that we don't know what the economy's going to be like in 2024 and that, if Josh Frydenberg's being honest, it's irresponsible.

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

Senator Di Natale, for the fourth time!

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

If the member for Kooyong is being honest, it's irresponsible—although I will say, Acting Deputy President, that it was a quote from the then shadow Treasurer. So, if you're going to make an adjudication, you might want to consider your ruling again.

These tax cuts leave income earners short-changed. That was the view of the then shadow Treasurer. He said:

… the Liberals are so out of touch that they've given a much smaller tax cut to two million Australians earning less than $40,000.

He's absolutely right. So vote against it! Stages 2 and 3 of the tax cuts, which begin in 2022 and 2024 respectively, are 'fiscally reckless and irresponsible'. Yet here we have the Labor Party supporting at least part of that package, and potentially all of it. At the time, the now Leader of the Opposition said:

We think that stage three, at a cost of some $95 billion down the track … is really a triumph of hope over economic reality.

Jim Chalmers's view was:

It makes no sense to support the third tranche which comes—

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

Senator Di Natale, resume your seat for a moment, please. I've asked you many times to refer to members in the other place by their appropriate title. Once again, you've failed to do so—

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

The now shadow Treasurer, Jim Chalmers, made it very clear, and I quote—

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

Senator Di Natale, I've asked you to refer to members by their appropriate title. You've just repeated 'Jim Chalmers' again and again and again. 'Mr Chalmers' would do fine. Use courtesy and try to obey the standing orders.

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

I'll seek to have this ruling addressed in a moment, but I do make the point that we have, on many occasions, referred to members of parliament by their full names, and that has not been ruled out of order. So I'll seek to deal with that at a future time.

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

Senator Di Natale, the standing orders are very clear: you should refer to them by their appropriate title.

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

Mr Chalmers said:

It makes no sense to support the third tranche which comes in five years away from now and overwhelmingly favours those who are least likely to spend it in the economy.

He went on to say: 'What I don't accept is that tax cuts that they're proposing five years down the track, which flow overwhelmingly to people who are least likely to spend in the economy—that is obviously a con job for the government to pretend that they would have any impact on the slowing economy today.' That is all absolutely correct. And we absolutely support those statements, which is why we hope that the Labor Party will join us in making a clear and unequivocal statement that it will repeal stage 3 of these tax cuts at the next election.

We must get an unambiguous and clear commitment that stage 3 of these tax cuts will be repealed. They are enriching the wealthiest in our society. We know our budget can't afford it. We've heard comment after comment from members of the opposition who have said absolutely clearly that stage 3 of these tax cuts do not warrant support, and we must address it. They've seen the same costings as the rest of us. They've seen the Grattan Institute and the Australia Institute research that shows that these tax cuts overwhelmingly benefit wealthy Australians and that men benefit twice as much as women, entrenching gender inequality even further. Again, I say: don't take it just from the Greens; take it from former senator Doug Cameron, who said that Labor should back the first tranche of tax cuts but that anything further was 'a con job'. He went on to say:

We must not capitulate to News Corp and the big end of town by becoming Liberal-lite.

We couldn't have said it any more clearly ourselves.

When I hear 'tax cuts', I hear cuts to hospitals, I hear cuts to education, I hear cuts to schools, I hear cuts to pension, I hear cuts to Newstart. That's what tax cuts are a euphemism for. Of course there are alternatives. We'll move later today to make sure that people on low incomes do get some support. They'll get more cash in their pockets not by adjusting tax thresholds and not by flattening our tax system but by ensuring that they get some support, that we increase Newstart by $75 a week, that we raise the funding for our public schools, that we introduce Medicare-funded dental care and that we build half a million affordable homes. We will do all of those things because we do see the tax system as a powerful tool for addressing economic inequality in Australia. We cannot cave in to this trickle-down, neoliberal agenda. We, as a nation, have fought hard to maintain a progressive taxation system as a means of addressing turbocharged economic inequality. It's getting worse, and a decision of this parliament to unwind the tax system in one of the most significant changes that has ever come before this place would be a huge mistake.

Let me finish by saying the Greens unequivocally oppose this tax package. The argument that somehow stage 3 doesn't take effect for a number of years and therefore we need to pass it and have some chance of reversing it is a furphy and it's a nonsense. If this package does pass with the support of Centre Alliance and Senator Lambie, then we must commit to repealing it. There are alternatives. Those alternatives will make Australia a fairer, more decent society. We must resist at every opportunity the path towards Trump's America, where our tax system is flattened, where economic inequality is worse and where our essential public services are run down.

10:22 am

Photo of Murray WattMurray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | | Hansard source

I rise to speak on the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019 second reading debate. Essentially, I'll be echoing the remarks of Senator Gallagher, who outlined the opposition's position on this matter, but I will add some additional comments, particularly in relation to the apparent deals that have been reached by the government with some members of the crossbench over the last 24 hours.

To begin with, I also want to join Senator Gallagher in putting on record the opposition's actual position on this bill, as opposed to what various speakers, including Senator Di Natale, have said. Fundamentally, Labor's position is informed by a couple of things, and they are our concerns for the state of the economy after six years of Abbott/Turnbull/Morrison government under the LNP, as we know them in Queensland. After six years of LNP government, under three prime ministers, now into their third term, we have an incredibly weak Australian economy, where we see interest rates set at a level below inflation. It's actually not even a matter of, if you're wanting to borrow money now, getting free money from banks. The economy is so weak under this government that banks are, effectively, giving money away and it's cheaper to borrow money than it is to just hang onto it. That's how weak this economy is under this third-term LNP government. The interest rates that we're now seeing under this government are in fact actually lower than what were available to borrowers during the height of the GFC, when, I might remind you, there was a federal Labor government in power, which successfully steered the Australian economy through the GFC in a way that was the envy of the Western world. Now we have had six years of LNP government—they're into their third term and third Prime Minister. This group of people, who like to parade around the country as the superior economic managers, have left the economy in a state where interest rates are lower than they were when the world economy sank into the worst economic conditions that it had seen since the Great Depression. So give yourselves a pat on the back. That's what good economic managers the LNP are. Well done!

It's Australians who are paying the price of this. They are paying the price of this in the form of the lowest wage rises we have ever seen in this country. My recollection is that these records have been collected for 30 or 40 years. Never over that entire period of time, whether it be Liberal governments or Labor governments—whoever the Prime Minister was—have we seen Australians' wages increasing at such a poor level while, on the other hand, company profits continued to escalate. We know that some people are doing quite well in this economy under this Liberal-National government. They're not lower-income earners, middle-income earners or the quiet Australians that this government claims to represent and claims to have been elected by; they're the largest corporations in this country, the shareholders in those companies and the highly paid executives of those companies. That's who is benefiting under this Liberal-National government, not the tradespeople working in Logan in Queensland and not the retail assistants working in Townsville. Their wages are barely growing. In fact, to make matters worse, this government is quite happy to stand by and see people like retail workers, hospitality workers and hairdressers actually have their wages cut. This government refuses to do anything about the penalty rate cuts that these average working people—the quiet Australians that this government claims to represent—are suffering.

The wages of all Australian workers are barely rising and are barely keeping up with inflation. It's no wonder that people are having trouble paying their bills. It's no wonder that people are so desperately looking for some kind of tax relief from this government. They simply can't get ahead. They're having trouble paying their mortgages and their energy bills—and let's not go there. What a failure this government has been on energy prices. I think we're up to 13 energy policies from this government. I'm not even going to worry about policy No. 14. I'll wait for policy No. 23. We'll probably be there by the end of the year.

It's no wonder that lower- and middle-income earners in this country are screaming for tax relief, because they're not getting any other support from this government. In fact, they're getting a range of policies that are seeing their wages either barely rising or being cut, if they work in retail, hospitality, hairdressing and industries like that. That's the fantastic economy that we're getting from the 'superior economic managers' that we have in this government sitting opposite us.

There have been a range of commentators and official institutions supporting aspects of this tax package. As I will outline, Labor also supports some aspects of this tax package. The Reserve Bank of Australia—if not the most respected economic institution in the country, it is right up there—is calling for tax cuts, particularly for lower- and middle-income earners, to try to get this economy moving, because nothing else the government is doing is working. The RBA is also calling for this government to bring forward infrastructure projects urgently. On another day we will have a proper debate about that, but I think Australians in very short order understand the pea-and-thimble trick that this government has gone ahead with when it comes to infrastructure projects. We've all seen the headlines over the last couple of years about the X billion dollar infrastructure package that this government is going to release for Queensland, New South Wales, Victoria, Western Australia or Tasmania. What's never revealed is that most of those infrastructure projects are so far down the horizon, so far beyond the next four years, that they will have no economic impact whatsoever. Not one single person is going to be employed to build any of those roads, any of those bridges, any of those dams or any of those rail lines, which aren't going to get funded by this government until well into the 2020s. That's going to have no effect on lifting the economy any time soon, and, of course, it's not going to have any effect on trying to fix the very real congestion problems that Australians are experiencing right now and need action on now. As I say, we'll have a proper debate about that another day.

As I say, Labor does support some aspects of this government's tax package. We recognise that the government was elected, that we lost the election. We recognise that particularly tax cuts for low- and middle-income earners were a key factor in the election debate. That's why we have been humble enough to shift our position in relation to stages 1 and 2 of this tax package. We went to the election opposing the package. We've listened to the Australian people. We've actually tried to compromise with the government on stages 1 and 2, but of course this arrogant government, re-elected against all expectations with a near Senate majority—their hubris has got the better of them so early into this term that they're not willing to talk with the opposition about a sensible compromise package that will deliver tax relief to low- and middle-income earners in Australia but won't drive the economy into a ditch, which is the risk that we face if the entire package, including stage 3, goes ahead.

Labor has already put on the record that it is willing to support stage 1 of the tax cuts that this government is proposing. We recognise that those tax cuts will primarily benefit low- and middle-income Australians—the 'very quiet Australians' who this government has been punishing for six years through lower wages, higher energy costs and a whole range of other cost-of-living increases. We recognise they need a break. We recognise low-income and middle-income people are most likely to spend their tax cuts; they're not people who go and save thousands and thousands of dollars a year. They're just trying to make ends meet. They will go out and spend that money in the shops, in the restaurants and in the local businesses right up and down my home state of Queensland. That will provide the very economic stimulus that the weak Australian economy, presided over by this government, so desperately needs. So we will support stage 1.

We've also more than compromised in relation to stage 2 of the tax cuts, which, again, overwhelmingly benefit middle-income Australians—people who need a bit of a hand to get ahead and the very people who will go out there, spend those tax cuts and get local businesses going and get their local economies moving. In fact, we not only support stage 2 of these tax cuts; we also recognise that the economy needs a desperate injection of funds to get it moving. That's why we've asked the government—and we'll be putting forward amendments today—to bring forward those stage 2 tax cuts. If the economy is in such dire need of an injection that the Reserve Bank of Australia is out there calling for the government to do so then let's make it happen. Let's not stop at stage 1; let's get on with it and bring forward those stage 2 tax cuts so that people can feel the benefit of those right now and get their local economies moving. In fact, if the government—and the crossbench, for that matter—is willing to compromise and support Labor's amendments to bring forward stage 2 of the tax cuts, the effect of that will be that every single Australian worker will get a tax cut, because those stage 2 tax cuts will benefit people who are earning more than $90,000 a year. If you want to have an argument about which party is supporting tax relief for low- and middle-income Australians, for all Australian workers, I'm happy to have that debate. The amendments that Labor is putting forward, seeking to bring forward stage 2, will have the effect of making sure that every single Australian worker will get a tax cut. If the government actually supports tax cuts for middle-income earners as well as low-income earners then it will change position and back Labor's amendments to bring forward those stage 2 tax cuts.

Of course, as Senator Gallagher has outlined, we do continue to have strong concerns about stage 3 of the tax cuts package that the government has been putting forward and that's for a couple of major reasons. They really come down to the incredible economic irresponsibility which is being displayed by a government that likes to say that it's a superior economic manager. If you're a superior economic manager, would you seriously be locking into the budget in 2019 tax cuts amounting to nearly $100 billion that won't actually start being paid until 2024-25? Not one person in this building, not one person in this country, knows what the economy is going to look like in 2024-25. That's five years down the track. If we believed what this government has been telling us for the last six years, we would have been seeing people dancing in the streets by now celebrating the economic joy that this government has been promising for six years. For every promise this government has made over the last six years—that good times are just ahead and that people are going to be benefiting from their superior economic management—we would be seeing it by now. We wouldn't be needing to see the very tax cuts that this government is putting forward.

How on earth can we have any confidence in what this government is saying the economy will look like in 2024-25, when the stage 3 tax cuts will actually take effect? It's not just Labor saying this. Again, we've had a range of economic commentators, including the Grattan Institute, appeal to the government to pass the stage 1 tax cuts now but to defer the stage 3 tax cuts to a time down the track, closer to when they'd take effect, when we have some idea about what the economy is actually looking like. The Grattan Institute's information that they put out this week states:

…the Stage 3 cuts, scheduled to come into effect in 2024-25, would cost the budget $85 billion over the subsequent six years. We do not know now whether these cuts are affordable or the right size and shape for the economy so far into the future.

The economy is softening, the budget position is uncertain, and calls for the Government to use fiscal policy to stimulate the economy are growing.

So there is an argument for the stage 1 and 2 tax cuts to happen right now to get the economy moving. But do we seriously think that anyone out there in the Australian community, if this bill gets passed without our amendments, is going to say, 'You beauty, in 2024-25 I am going to get a tax cut from the Abbott-Turnbull-Morrison government'—probably by then the Canavan-Smith-Scarr government, because you will probably move to the House of Representatives and you'll be the next leaders. We don't even know how many Prime Ministers we will have between now and 2024-25, let alone what the economy will be like. Do you seriously think there is anyone sitting in Western Australia, where Senator Smith is from; in Rockhampton, where Senator Canavan is from or in Brisbane, where Senator Scarr is from, today who is going to race down to the shops tomorrow and spend a whole bucketload of money buying a big, new TV from Harvey Norman, or whatever they're going to do to get the economy going, because they know they are going to get a tax cut in five years time? Really? If you know people like that, I would like you to introduce them to me, because they're obviously easily deceived.

The stage 3 tax cuts are totally economically irresponsible. They are also grossly unfair. I might just pick out one aspect of this, and, again, this is particularly for Senator Canavan's benefit. I spent the last term reminding regional Queenslanders of how often we had seen the Nationals talking the talk in regional Queensland about how much they cared about regional Queenslanders, then coming down to Canberra and getting their tummies tickled by the Liberals, rolling over and supporting policy after policy after policy that ripped money out of regional Queensland and sent it straight into the north shore of Sydney. Here we go again.

You would think that the Nationals would have some gratitude for regional Queensland, which I accept voted for them in droves. We got a shellacking in regional Queensland. The Nationals did very well—congratulations. You really would think that there'd be a little bit of gratitude from the Nationals, that they'd repay the favour to regional Queensland and not back in the stage 3 tax cuts that overwhelmingly will be benefiting people in Sydney and Melbourne, and not in Rockhampton, not in Mackay, not in Townsville, not in Gladstone, not in any of those regions—

Photo of Matthew CanavanMatthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | | Hansard source

What about the Gladstone port worker?

Photo of Murray WattMurray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | | Hansard source

Of course there are people in Gladstone and Rockhampton who earn more than $180,000, but you know as well as I do, Senator Canavan, that they are not in the majority. They are a tiny minority of people, and the majority of people who earn that kind of money are sitting in inner-city Brisbane, inner-city Sydney and inner-city Melbourne. They're not in Rockhampton; they're not in Gladstone. And here you are again supporting your Liberal overlords to do the very things that benefit their constituents and not your own.

I'll spend my remaining time talking about the dodgy deals which apparently have been made overnight, particularly with Centre Alliance. Of course we still don't know what the nature of those deals are. Senator Patrick was interviewed on Radio National this morning. He still doesn't seem to know exactly what the deals are, but he is prepared to sign up to this deal to ship all this money out of South Australia—again, they'll send it off to Melbourne, send it off to Sydney. As to the people who don't earn that kind of money in South Australia, he is prepared to sell them out—sell out his own state—for a deal even though he doesn't even know what that deal is. 'It's something about gas. Don't worry; we're going to do something about gas. Yes, I've got a nod and a wink from Senator Canavan; I've got a nod and a wink from the Prime Minister and Senator Cormann. They're going to sort it out. It's going to be good for gas prices.' But he can't even tell you what the deal is, let alone tell the Australian people or the South Australian voters who elected him what the deal is.

Apparently what this deal is going to do is bring down gas prices. I recognise that, again under this government, we've seen nothing but energy price increases, whether it be electricity or gas. I feel for people in South Australia, just as I feel for people in my home state, about the gas prices and electricity prices that they're paying. So, if there was actually some prospect that this deal would deliver, you might think about that. But I can tell Senator Patrick, and I can tell every member of the government who has signed up to this deal, that we are going to be watching what actually happens to gas prices. I saw in Senator Patrick's interview with the ABC this morning that he was pressed and pressed and pressed about what it would mean for gas prices, and he said, 'I think probably a realistic measure is something in the order of about $7 per kilojoule for gas.' Currently we're paying about $9. We want to see that decrease, and we're going to be watching. (Time expired)

10:42 am

Photo of Rachel SiewertRachel Siewert (WA, Australian Greens) Share this | | Hansard source

I too rise today to speak on the Treasury Laws Amendment (Tax Relief So Working Australians Get More Of Their Money) Bill 2019—or should I say 'treasury laws amendment (destroying Australia's progressive tax system)' or 'giving to those already doing okay even more money'? The gall of this government to pretend it cares about low- or middle-income Australians when this bill does nothing for those on the lowest income, those struggling to survive on Newstart or youth allowance. It does nothing for them, while the bulk of the money goes to those who are already doing okay, thank you very much. It will not help those on the very lowest incomes. Not only does this do nothing, but the government clearly intends to do nothing for those people.

On top of that, where does this money come from? When you look at the budget papers—and I'll go into this in more detail a little bit later—it comes from not spending on services for the very people who are going to be the worst off under this proposal. So it's a double whammy. You're not increasing Newstart, youth allowance and those other payments that really need an increase, but you also cutting services that would in fact be helping those very people.

This bill implements reductions in personal income tax rates over three stages. The proposed changes are on top of the tax cuts already legislated through the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018. Together these tax cuts will cost the government approximately $158 billion over 10 years. This cut means spending will shrink—we can make no mistake about that—and that will impact on the people who can least afford to pay.

Stage 1 of the tax cuts, commencing in 2018-19, increases the low- and middle-income tax offset, which is a non-refundable tax offset. This stage will reduce government expenditure by about $14.9 billion or $15 billion over the decade. Stage 2 , commencing in 2022-23, further increases the lower tax offset and changes the top taxable income threshold. This stage will reduce COMET expenditure by approximately $47.6 billion over the decade. Stage 3 of the tax cuts, commencing in 2024-25, further reduces the marginal tax rate from 32.5 per cent to 30 per cent. This means that taxpayers that have a taxable income of between $45,000 and $200,000 will pay a marginal tax rate of 30 per cent. People with taxable incomes of $200,000 stand to gain a maximum of $11,640 each year from these changes.

I'll just stop here very quickly and say that those on Newstart get about $15,000 a year. So, under this proposal to cap taxes, those on that high income of $200,000 will be gaining in tax almost as much as a person gets on Newstart—a person who is trying to survive on Newstart. That is simply outrageous. This stage will reduce government expenditure by a whopping $95.4 billion. Clearly, this money is disproportionately benefiting those on the highest incomes. It's really clear where the government's priority is. My colleague Senator Di Natale, the Greens leader, has already outlined that we will be moving amendments that, in fact, would deliver better outcomes relating to tax offsets for those on low and middle incomes, and my colleague Peter Whish-Wilson will, I know, be talking about that further.

Let's have a think about how we could better spend $158 billion. We could start by raising Newstart and youth allowance. The other day I came across some documents that I had been working on in 2012. They related to the inquiry that we had about the adequacy of Newstart and other payments. We have known for a very, very long time that Newstart and youth allowance are inadequate. In 2010 they were inadequate, in 2012 they were inadequate and in 2019 they are disgustingly inadequate. People in this country are living in poverty. And what are we doing? Giving people on $200,000 a whole lot of money that's nearly the equivalent of a whole Newstart payment. What is this country coming to when we think that is okay? And the crossbench is about to lock that in! They are about to lock that in by agreeing to—well, we don't know! So much for transparency in this country. We don't know what they're agreeing to, because it's all a little bit airy-fairy; it's all on a promise.

I wouldn't trust this government as far as I could throw them. They don't care about those on the lowest incomes, because, if they did, they would increase Newstart. They keep promoting this absolute fallacy that Newstart is only a transitional payment and it's only to help people through while they are out of work for a short time. That has been demonstrated time and time again to be false. People, particularly certain cohorts, are stuck on Newstart for a very long time—a very long time. Single parents with children are stuck on Newstart. And we know—the evidence is really clear—what the impact of poverty is on those living in poverty. It is a barrier to finding work and it has long-term impacts on the children that are growing up in poverty.

It has been demonstrated time and time again that we need an increase in Newstart, and it has been called for. The Business Council, ACOSS—the list goes on and on of the number of organisations and people who see the wisdom of increasing Newstart. Just a couple of weeks ago, we saw Philip Lowe, the Governor of the Reserve Bank, say that an increase in Newstart would be 'good for the economy'. You know why? Because when you're living below the poverty line, when you're living, literally, from payment to payment, any increase you get, you spend. You spend it on either meeting a bill—making sure you're paying those bills and they're not in arrears—or putting food on the table. You stimulate the economy. You buy those extra little things you need for your kids. You make sure that you give them a little bit of extra money so they may be able to buy something once a week at the canteen like all the other kids at school. It would absolutely stimulate the economy directly, and the Reserve Bank governor says so.

Over the past 30 years poverty has remained consistent in Australia despite economic growth and low unemployment. But this government continues to do nothing to eliminate poverty or reduce income inequality, and this will make it worse. We don't have a poverty reduction plan. In fact, the plan is to actually increase poverty, because we are not dealing with Newstart. We don't even have an agreed national definition of poverty, let alone regular reporting by governments on any progress to address it.

Today there are around three million people in Australia living below the poverty line. Over 700,000 children are living in poverty, which has increased by two per cent over the past decade. The reality is that we are living in a time where income inequality is rising alongside the cost of living. This is the worst time to be handing out tax cuts to the wealthy and big business.

The people experiencing poverty at the highest levels in Australia are those living on Newstart and youth allowance. We have the second worst poverty rate amongst unemployed people in the OECD. We need only look at the statistics on food relief and housing stress to see that income support payments are inadequate. Charities across Australia are struggling to keep up with the demand for food relief. The proportion of food-insecure Australians seeking food relief rose from 46 per cent in 2017 to 51 per cent in 2018. Children in Australia are more likely to live in food-insecure households than adults. I reinforce the message that living in poverty is a barrier to employment but it can also have lifelong impacts.

This year's Anglicare Rental Affordability Snapshot shows how people receiving Newstart and youth allowance are experiencing housing stress. It once again demonstrated that there are no affordable rentals for a single person on Newstart or youth allowance in any capital city in this country. Yet the government stands there with its hands in its ears and its hands over its eyes; it won't hear and it won't see what is happening to people who are struggling on income support in this country.

We also know that poorer people have increased levels of psychological distress, which is associated with poor mental health and issues such as depression and anxiety. Nobody is getting a fair go when they are living in poverty on less than $40 a day. The government, as I've said, claims that Newstart is only a short-term payment and justifies its refusal to increase the rate. This is simply not true. We know that 44 per cent of people receiving Newstart and youth allowance are on these payments for over two years and 15 per cent for over five years. It is clear that the perverse and punitive rules that we have in place on people who are receiving income support payments are keeping people in poverty and acting as a barrier to employment.

Since 2014, and that dreadful budget that we can all remember, more than $1.8 billion has been ripped from the community sector—those who are helping those who are the worst off. These tax cuts will undoubtedly result in more cuts to services and programs by generating less money for essential public services like social security, health and education.

But let's look at the budget papers for 2019-20. When you take a closer look at them you will see that there is less spending on families, children and communities over the next five years. Look at the Department of Social Security budget statement on page 63 and what's budgeted at program 2.3, 'Social and community services'. The estimated expenditure for 2018-19 was around $277 million. If you then go to what is projected for 2022-23 you will see that it is $259 million. That is a drop, when we know that we will have inflation, that we have an increasing population and that the government is not doing anything to increase Newstart. People on Newstart will still need services. You are cutting services. That's where these cuts are coming from: services. These are coming off the back of the most disadvantaged in our community.

Let's turn to something that most people in this chamber won't know about—that is, the equal remuneration order. If you think back to over about five years ago, we made sure that there was an increase for those working in the community sector, and the government made sure that they put money into that. Well, that runs out next year—$500 million runs out—but it's not being made up for in the money that is going to the community sector. In other words, they will have less money through this process—through the budget there is already less money going there. On top of that, if this government does not address the issue around the ERO, as it's commonly called, these organisations will have to make cuts. That will be a triple-whammy now to these services: increased caseloads and reduced real funding through the budget, because they will no longer be able to provide the same number of services if they are to pay their workers proper wages.

This comes on the backs of the most disadvantaged in our community. It is simply outrageous! You are destroying our progressive tax system. You are destroying our community services and public services and universal delivery of services. When you look at health, the money in the budget into the forwards does not properly address the true cost of inflation in the health budget. So, again, inevitably that will come out of the pockets of the most disadvantaged. Because you're giving money to the wealthy, they will be able to pay for it. The most disadvantaged will not be able to pay for it. That's the true cost of these budget tax cuts. These budget tax cuts will impact on the most disadvantaged in the community, throughout our service delivery system.

What else do we spend this money on? Let's look at aged care. We know we have a shortage in residential aged care, particularly in levels 3 and 4. We know we need an increase there. You could provide a lot of beds with this amount of money. You could actually make sure that we are delivering care. At the moment we have a royal commission inquiring into our inappropriate and ineffective aged-care system. We know from the evidence—again, I know the government doesn't like the word 'evidence'—that we need to increase the level of care, per resident, in residential aged care. We know that it needs to increase to least four hours and 18 minutes. We could spend some of this money on looking after our elderly. We could afford to pay for Denticare. These cuts will have devastating impacts on those on the lowest income.

At the same time that the government professes to care for those on low and middle incomes, it has now signalled that it is going to have another go at attacking our industrial relations system by further undermining workers' rights to campaign and take action and to make sure they have fair pay and fair conditions. They have already cut penalty rates. And who does that impact on? It impacts on the lowest paid. What the government should be doing is increasing Newstart and youth allowance if it wants to stimulate the economy. We know from the Reserve Bank governor and from a long list of experts in this field that that would help stimulate the economy and help those on the lowest incomes. I foreshadow that I will be moving as a second reading amendment that:

At the end of the motion, add:

“, but the Senate:

(a) notes that the bill does nothing to assist people receiving newstart allowance or youth allowance; and

(b) calls upon the Government to introduce legislation to amend the Social Security Act 1991 to increase the maximum single rates of newstart allowance and youth allowance by $150 per fortnight”.

That's what would really help those on the lowest incomes. That's what would really help stimulate our economy.

These tax cuts are coming at the expense of our progressive tax system, at the expense of those on the lowest incomes. These tax cuts will result in cuts to essential services that people need, particularly as this government is refusing to address the issues around Newstart. We are urging the crossbench to reconsider their support for these tax cuts. They are bad for this country. They are bad for the people that they profess to care about. We urge the ALP to vow to repeal these tax cuts. If the ALP genuinely care about people on the lowest incomes, they will see the absolute flaws in this.

It is a travesty that we are giving so much money through these cuts to the top end of town, to those that are on high incomes and don't need these cuts. The people that need a boost are those that are trying to survive on $15,000 a year. Go and try it. I did, and you can't do it—and that was in 2012. Things have gone up since then. We oppose these tax cuts. We stand for the most vulnerable people in this community. We stand for a fair Australia, and these tax cuts are not fair.

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

Senator Siewert, just for clarity: you've foreshadowed the amendment that you will be seeking to put?

11:02 am

Photo of Malcolm RobertsMalcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

This is not my first speech but, as a servant to the people of Queensland and Australia, I want to speak on behalf of the hundreds of thousands of honest Australians and Queenslanders who voted for One Nation at the last election and the vast majority of Australians who did not vote, in their primary vote, for the government. I listen to the people and I speak for the people, because One Nation is of the people. Let me make it very clear: we believe that money should be in peoples' hands not governments' hands. So why not bring the tax cuts forward? That's a question I want to consider.

Tax is an issue that's dear to my heart. It drives behaviour, and many people seem to forget that. Tax creates or chokes the environment for small business, large companies, employees and consumers. That is clear. It's well known, yet the government seems to be forgetting it. I've said many times in the Senate and in public that the taxation system in this country is our most destructive system in Australia. It is choking our country. When we change the tax system for the better, we will change behaviours and we will actually have smaller deficits—and I'll touch on that later today. But for now I want to introduce another concept, productive capacity. It's what our country will produce in the future. What is the capacity of us to produce and to produce effectively and efficiently? There are students in the gallery of this chamber from time to time, and it is their productive capacity that I'm particularly concerned about—the future of Australia. That's why we do not just tick and flick what the government puts up; we do what's best for our country. I want to thank Senator Cormann for the two presentations he arranged from the staff of the Treasury—great people. We got on very well and we appreciate their advice to us and their sharing of some information.

It's tempting to grab hold of the tax cuts—the tax offsets, sorry; they're not tax cuts, they're tax offsets—as a sugar hit, and the promise of bigger tax cuts after another two elections, more than half a decade away. Yet high energy prices, right now, are highly regressive and hurting the poor the most. So much for the bleating from over here from the Greens! They are in favour of, they have caused, the higher energy prices that are highly regressive for the poor. In the world's greatest exporter of energy, this country, we have pensioners and other most vulnerable people who cannot afford energy.

I can remember, as a high school student, cycling past the Kurri Kurri smelter in Kurri Kurri in the Hunter Valley as it was under construction. That smelter shut down recently because of the destructiveness of the Liberal-Labor policies on energy.

We support tax cuts—yet we want to consider the risk in getting rid of a $158-billion revenue stream and not replacing it. Why does the government lock itself, and two future governments, into a position half a decade out? And will the government guarantee no rise in GST?

Tax offsets, not tax cuts, are only for people paying tax—yet not all taxpayers—because they're really hand-backs or offsets that the ATO calculates. And they don't take care of people who don't pay any tax at all, such as pensioners.

So what about pensioners being choked with rising energy prices and rising food prices due to drought and high water prices? What about farmers—food producers—crippled with water prices? Until recently, Liberal-Labor governments—and I say 'Liberal-Labor governments' deliberately, because it makes no real difference, as I'll show you in a minute—borrowed money for recurrent expenditure. That's like a family putting its grocery bill on the home loan.

Why are Canberra public servants paid such huge salaries? What happened to our Constitution's competitive federalism and the accountability that it brought? I'll tell you what's happened to it: it's been destroyed.

Tax offsets are a sugar hit and can be taken away from the people through electricity prices overnight—well, within 12 months. Yet infrastructure charges—which are what my leader, Senator Pauline Hanson, and I have been advocating for—cannot be taken away, and they increase the productive capacity of our country.

If the economy will benefit so much from the government's supposed tax cuts, why are we waiting half a decade until 2024-25? Why not do it straightaway? It's all about priorities—as I'll show you, because One Nation wants reality for the people of Australia.

I'm going to discuss some problems and then some solutions. One Nation focuses on two primary things: management of our economy today and the vision for the future. Managing today requires two components: (1) cost of living—focusing on that, in economic management; and security, in terms of who we let into the country, for example; and (2) the vision for the country's future productive capacity. Good governance involves stewardship, management, governorship—which is for the long-term future—and trusteeship of the values of this country and our culture.

Let's discuss some facts briefly. 'Mandate': the government says it has a mandate. The government got one-third of the votes—or less than that, in places. And certainly we have a mandate in the Senate to speak for the people who support our campaign on energy and infrastructure.

Just a note to the Prime Minister: he does not tell the Senate what to do and how to do it; the Senate makes that very clear. It is under the Senate's grace that we debate issues, because the Senate is the house of the people of the states and a house of review.

On the debt, I say as I look to the members of the government over here: the debt in this country has doubled under your rule, Prime Ministers Abbott, Turnbull and Morrison. And Mr Morrison, by the way, was also the Treasurer. Prime Minister Morrison's Liberals got fewer votes than Mr Turnbull's Liberals.

And regional Australia now is in recession. Businesses are shut. Go to anywhere from Cunnamulla to Cairns and you'll find shops boarded up—empty, vacant, dark, oppressive. Interest rates have just been cut to one per cent, yet credit card interest rates have been raised 1½ to two per cent.

Let's turn to the Governor-General's recent speech on behalf of his government. He said, 'A government's role is to shape the environment so people can seize the opportunities.' I agree completely. And he said, 'We are good people.' Again, I agree. Yes! In Australia we have amazing, resourceful, practical, innovative people. We have abundant resources. We're the world's biggest exporter of energy. There's plenty of water up north. We have a great climate. Our soil is a little bit thin compared to other agricultural countries, but we have so many boundless resources. And yet we're led by wombats.

Let's consider the poor economic management under the Liberal-Labor duopoly, which is destroying Australia's productive capacity and potential and destroying our environment for investment in the future. History and the record of Liberal-Labor show us that they're building facades and selling them. That's the history of our country in recent decades. There's more interest in looking good than doing good, and I'll explain that in a minute too.

But let's come to the primacy of energy. The No. 1 lesson of the last 170 years, since the start of the Industrial Revolution, is that the ever-reducing prices of energy in real terms have led to enormous increases in human progress. That is clear. Yet, under the Liberal-Labor duopoly, in the last 10 years we've seen a doubling of energy prices. It's a reversing of the energy trend, and that will lead to the future of our kids being a decline in human progress. That's what we want to reverse—that decline.

Let's think about the Renewable Energy Target. It was brought in by the Howard government and put on turbochargers by the Rudd and Gillard governments, destroying our competitiveness in this country. Network costs are high as a result of gold plating because of the structure of those under the now National Energy Market, which is really a national energy racket. Retailers are making money for jam, with guaranteed returns. The National Energy Market is not only a dictate of bureaucrats; it is able to be gamed, and companies, including foreign owned companies, are now making off like bandits while pensioners freeze.

Then we have privatisation and corporatisation. I was once in favour of government getting out of just about everything, but I've come to realise that, when it comes to monopolies like electricity and water, we cannot afford to have those assets in the hands of foreign owned multinationals that don't give a damn about our country. Under the old regime of competitive federalism, each state was responsible for its own electricity prices and reliability, and the focus of the minister in charge was to drive down the price of energy while ensuring reliability. Now, under privatisation and corporatisation, the focus is on the boards governing those entities driving up the price to maximise profits, without adding any more value. That is scandalous. That is now focusing energy deliverers on raising prices, and when we focus on raising prices what do we get? We get rising prices, higher prices. We've gone from having the cheapest energy in the world, with a focus on declining prices, to having the highest electricity prices in the world, with a focus on driving up the price of energy. That is simple, but no-one talks about it.

Think about the example of Kilcoy. We have a Chinese company wanting to buy land there and build the largest solar industrial complex in the Southern Hemisphere, perhaps in the world. They want to add cadmium and lead to Brisbane's water supply. But it's not just Brisbane; it's Ipswich, possibly Toowoomba, the Gold Coast and Logan. More than 2½ million lives are threatened. We're turning productive, high-quality prime agricultural land into an industrial wasteland for low-density energy production. Who did this? Liberal and Labor did this. And who pays? The people pay.

Then what we see is our coal going overseas to China to build wind turbines. They can use our coal more cheaply than we can because of our ridiculous Liberal-Labor regulations of the last 10, 15, 20 years. China is at a competitive advantage already. They send their wind turbines and their solar panels to us while they use our coal to generate electricity cheaply. And then we pay them subsidies to destroy our electricity network. We pay them subsidies! This would be like John Curtin as Prime Minister in 1942, when he saw the bombs falling in Darwin from the Japanese bombers, sending a cheque to the Japanese government, saying, 'Here, you might need a subsidy to help you destroy our economy.' I'm not criticising the Chinese for doing that. They're making a rational decision as a result of our government's stupidity. We're subsidising the destruction of our country.

Think about property rights. Think about people like Dan McDonald, an honest, hardworking farmer; farmer Sharon Lohse; and Bruce Wagner in Boonah. John Howard was agnostic on climate. He even said so seven years after he did the damage. His government stole farmers' property rights to comply with the UN's Kyoto protocol. You're wondering why I'm angry? It's because it happened all across Queensland and most of New South Wales thanks to Bob Carr and Peter Beattie. The initial agreement was with Rob Borbidge, the Premier of Queensland in 1996, when John Howard floated the idea to comply with Kyoto and cut the guts out of our agricultural sector. His government did it deceitfully by avoiding the Constitution so that they wouldn't have to pay compensation.

This is destroying the productive capacity of our country. Who did it? It was the Liberal-Labor duopoly. Who pays? It's the people who pay. The Liberals and Labor have identical or similar political positions on climate that are driving higher energy prices. The onus is on them to provide the data and facts justifying their policies, because they never have. Former Senator Ian Macdonald, from the Liberals, said in 2016, in this chamber, that we have never had a debate on climate science—never. He is correct. The Liberals and Labor have similar policies on gas. They are abandoning Australians and Australia. There are high immigration numbers under the Liberals and Labor. On foreign ownership, go for it, under the Liberals and Labor.

The Liberals and Labor are working together against minor and medium parties. Prime Minister Morrison suggested Labor and the Greens ahead of One Nation when it comes to preferencing. When are the Liberals and Labor going to merge? They are both chasing the same voters. Labor abandoned the workers. Liberals abandoned small business. The Nationals abandoned the farmers and the bush. When are they going to merge? They are all chasing preferences from the Greens. Maybe they will merge with the Greens, who are the ones who set the agenda. At times, they even suggest to preference the Greens first. That tells you about the Liberals and Labor. Labor always preferences the Greens first.

Who did this, again? It was the Liberals and Labor. Who is paying? It's the people. Every monopoly ever has been created by government. That includes education, energy and the centralisation of government. The tax offsets and cuts will be chewed up by higher energy prices and water prices within 12 months. The poor need real jobs and hand ups, not handouts. Tax rates and bracket creep mean nothing to people who have no job or have lost their assets to capricious banks, as many farmers have. We have a needlessly complex tax system that is made more complex because of the convoluted way that this government is giving tax breaks to low- and middle-income earners—we applaud that but not necessarily the way they're doing it—while ensuring a surplus and overall longer term bracket creep.

Think of these considerations. Think of progressivity. Theoretically, contrary to what the Greens say, the government has maintained that. We compliment them for that. Think of bracket creep. It is cyclical. They are not doing anything about bracket creep. They are just putting it off for another day. Think of a consumption boost. Potentially there could be, but the people in the Treasury can't really say where it will be spent. Will it be spent on imported goods, helping the Chinese and the Americans, or on Australian goods? Think of the budget's effect. It is affordable, so they say. They will keep the budget in surplus. There is then the political balance and a narrative. They need a surplus even if it is tiny and fragile. They then want horizontal equity so that the same tax is paid even if there are different income sources.

Get this: they want to maintain a 24 per cent tax take. In this beautiful country, the aim used to be 10 per cent. It has gone up two and a half times under the Liberals and Labor. It's an already complex tax system made more complex by offsets. Yet, out of this mess, eventually comes a better, simpler tax system. That would be half a decade from now, after two more elections. Who knows what will happen in between. People need transparency in the tax system, because that's what drives behaviour. With offsets, they don't get that. People in this country feel confused, directionless and hopeless. It's five years before they can get some real relief for middle-income earners.

These tax cuts and tax offsets are yet another political distraction, hiding the reality of economic mismanagement. The productive capacity of our country is being destroyed. Foreign multinationals pay no company tax. The weakest people are the PAYE people, which is the vast majority of Australians, frantically too busy surviving and complaining to take action. Farmers are abandoned, workers are abandoned and PAYE people are abandoned, and yet there's a possible structural change going on in the economy right now, according to the Treasury. Now we have competitive welfarism across the state rather than competitiveness.

Here are some solutions. If the tax cuts are so good, so beneficial, bring them all forward and get the benefits now, straightaway: increased economic behaviour, increased economic activity and possibly a higher tax take. We've seen modelling just recently, and we'll be back on this, from the University of Queensland and the CIS on that. They can do both, tax offsets and investment in coal-fired power and water security, to drive down people's costs, removing the artificial burdens on energy. They can tax foreign multinationals who currently pay no company tax, and they can do that to dramatically improve the surplus. How about this for an idea for the government? The $3 billion that's currently paid for subsidies to energy producers could be paid out of consolidated revenue. Mrs Brown, the pensioner down the road, currently pays for the subsidies to multinational electricity producers and the state government of Queensland. Higher electricity prices are highly regressive. It's a hidden Greens tax. Instead of the pensioners paying for them and instead of all of us paying for them—the wacky Greens programs that have been picked up by Liberal and Labor—why not have it coming out of consolidated revenue, paid for by increased revenue from multinationals?

Conclusions from me: economic mismanagement is destroying Australia's productive capacity and potential and yet we have enormous potential if we get back to basics. We need to invest in productive capacity: coal-fired power and water infrastructure. We need proper tax reform and tax rates locked in. One Nation is about positive policy for managing Australia, reducing the cost of living through proper economic management, enhancing security and having a vision for future building. We need creative and productive investment for the future. We need proper, responsible economic management. (Time expired)

11:22 am

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party, Shadow Assistant Minister for Manufacturing) Share this | | Hansard source

Throughout this debate, it is only the Labor Party that has been advocating that all working Australians receive a tax cut now because both our economy and many households are struggling. Letting this bill through in its current form, unamended, fails in our duty to all Australians. We know that Australians are struggling under mortgage stress, flat wages growth, the rising cost of living and power prices, but this bill before us today does not prioritise the needs of Australians properly. It's quite reasonable to bring forward the second stage of the tax cuts, because more money in the pockets of more Australians now gives our economy the stimulus it so desperately needs. Letting this tax bill go through in its current form does a disservice not only to the people of my great state of WA, who have put their trust in me after the recent election, but to the whole of Australia. This bill, as Labor proposes, should be split, allowing the first and second stages to go to the intended middle and lower income earners. That gives the much needed boost to the economy. But, instead, you are so ideologically driven towards wanting to do the tax cuts for high-income earners down the path, in the future, that you're not prepared to bring forward those stage 2 tax cuts in the interests of the economy now. The first and second stages would allow a much needed boost for an economy that we know is already in trouble.

You are irrational when you say that the third round of tax cuts are planned for 2024, when you have no idea of the economic climate that we will be dealing with in that time. We should be waiting to see what the economic conditions are before we revisit such an idea. You projected that there'll be a $9 billion surplus in 2022-23—that's including the $16.4 billion worth of planned tax cuts for that year—but what we know is that the Reserve Bank's forecast for the next few years, which was released only in June, looks much bleaker than in the March budget. The March budget predicted a 2.75 rate of growth in wages. The Reserve Bank's forecast, a mere two months later, predicts only 2½ per cent. All signs keep pointing to not legislating these $35 billion worth of tax cuts that are five years into the future, a future that we can't possibly predict now. At this moment, more than anything we shouldn't be making grandiose plans without knowing what kind of environment we need to work with in the future.

The economy has been growing, thanks to this government, much too slowly in recent years. The rate of growth in Commonwealth spending after inflation is estimated to fall from an average of 2.6 per cent per year from 2013-18 to 1.3 per cent in 2019-22. This is not good enough when it comes to public goods and services in our nation. So, instead of looking down the track, why not work quickly now to improve income growth and spending on goods and services across the nation by bringing stage 2 forward? If we get them going this year, it will mean we're able to directly help lower and middle Australia now. For that modest cost of $10 billion, we'd be able to directly lighten the load of struggling families, who might not feel able to comfortably spend on a new vacuum cleaner, getting the car serviced—all of the things that should be injected into our economy now with increased consumption and spending. People would be putting more money into the economy. Allowing the second stage and the first stage through, going to the intended middle- and low-income earners, gives that boost to our sluggish economy that you over there, in your heart of hearts, desperately know we need.

You can't paper over the state of the economy, as much as you might like to. The economy has slowed to a pace not seen since the global financial crisis a decade ago. The Reserve Bank has brought interest rates to a level lower than we saw during the global financial crisis. We know that the Reserve Bank has real concerns about the continuation of sustained growth in the economy. They have also said that their monetary policy is not enough. We have an opportunity, in this bill before us today, to do something more.

Interest rates through the Reserve Bank are lower than we saw during the global financial crisis. We must do something about the concerns in our economy. The one per cent rate of interest is an indictment of the economic mismanagement we have from the Liberals. It's one per cent. What are you doing in the meantime? You refuse to change the deeming rate for pensioners from 3½ per cent, where you deem that that's the income that they will earn from their savings. No, it's one per cent. One per cent is the official interest rate now. You want to give these tax cuts to higher income earners down the track but you refuse even to change the deeming rate for pensioners now. You are void of economic policy, which is clearly something that the Reserve Bank sees. We have stagnant wages growth, weak economic growth and mortgage stress—mortgage stress that's clearly being experienced in my home state of Western Australia, where mortgage defaults are the highest in the country.

What you can and should be doing with these tax cuts is injecting more cash directly into middle-income and lower-income households, who are more likely to spend it and boost the economy. Another good thing to do is to have direct investment into infrastructure and services—a critical thing to get our economy back on track—and to make sure that our dentists, cafes, local shops are thriving and vibrant. The boost that our economy needs is not going to be achieved through stage 3 of these tax cuts, which are down the track. Stage 3 is aimed at high-income earners, who have clearly been shown to save or invest at least a third of their income. What's more, they are down the track and we don't know if we can afford them. As the Reserve Bank said earlier this week:

Consumption growth has been subdued, weighed down by a protracted period of low income growth and declining housing prices.

The government, with its 'nothing to see here', does not even have a wages policy. You did not have one to take to the election and you do not have one now. Your last policy was to cut penalty rates for some 700,000 working Australians. You seem to think that penalty rates are a luxury for workers, but they're not. They put food on the table and fuel in the car and, indeed, also stimulate the economy. By the time your penalty rate cuts are fully implemented, some workers will be some $26,000 worse off. Workers will lose up to $2.9 billion. You give tax cuts on the one hand, but you take with the other hand. What kind of policy is that?

You have not properly costed the third round of cuts, for which we require some $95 billion over five years. Where, my friends on the other side of the chamber, is that money going to come from? Is it the education system, which has suffered a $14 billion cut not only from the government but from our current PM? It is the healthcare system, where rebates have been frozen for the last five years and there have been $2.6 billion in cuts to public hospitals? Is it pensions? Is it the government's lack of preparedness for Australia's ageing population? The government still needs to deal with the consequences of the aged care royal commission. Is it the government's lack of preparedness for Australia's population, when real growth in health spending will have to fall by some 0.7 per cent? In a decade's time, health, aged care and disability services alone are expected to cost $21 billion a year more. We already don't have this revenue.

In 2017 people aged 65 years and older made up some 15 per cent of the population. In 2023, some three years after the proposed introduction of these tax cuts, the lion's share of which will go to five per cent of the population, those aged 65 and over will make up 18 per cent of the population and will be seeking retirement and access to public health and aged-care services. How are you going to have enough taxpaying Australians to pay for an ageing population under these circumstances?

As I said before, the third stage of the tax cuts are skewed to the smallest and wealthiest tax bracket, giving those earning $180,000 to $200,000 around 4.54 per cent of their disposable income back. In the first stage of the tax cuts, those earning $45,000 to $90,000 a year stand to gain only 2.16 per cent of their disposable income back. Why are you giving the highest tax cuts to those who are least likely to spend them? How is that fair on all Australians? In 2024 those in the top five per cent of the tax bracket, if they're earning $200,000, will be getting an extra $224 a week in tax cuts. As Senator Siewert pointed out, that's about the same as Newstart today. Newstart payments are stagnant. They have been $245 a week, which is less than the value of the minimum full-time wage, which hasn't been increased when inflation has been taken into account, for some 25 years. That's where Newstart is today.

Senators on the other side of this place—through you, Mr President—I call on you to see the dangerous economic times we're in, and, at the same time, see our capacity to support those most vulnerable in our society, who will suffer if we don't see the light on these issues. Those who don't earn enough to be taxed, arguably the most in need, are left completely in the dark on what you're doing with these tax cuts. Households earning $30,000 or less are 30 per cent of our population. The implementation of your plan will widen this gap even more greatly. Giving half of the tax cuts to the highest tax bracket won't boost our economy; that doesn't create jobs. We're on track, in the long term, to damage essential services to our country and widen the gap between the haves and have-nots in our nation. We're in a dangerous economic climate, and you seem to be behaving as a government that won't see sense. I cannot stress enough, colleagues, the importance of the job we have to do in this place today.

It's a good thing to act now, through these tax cuts, to stimulate the economy. We do have the lowest growth in 10 years. That has a real and tangible impact on hardworking Australians and their families. It is about supporting working people to put food on the table and fuel in the car. That's our job. We should be here in this parliament to stimulate the economy by giving more money back to hardworking Australians in tax cuts. But what we should not be doing now is locking in these stage 3 tax cuts, which this nation may not be able to afford in terms of its revenue and may not be able to afford in terms of the substantial impact on the services which Australians rely on us to provide.

I implore you to work with us. We've compromised. We've changed our position to support stage 2. You don't need to sell out to the crossbench on whatever deals they might be doing—please! You can actually act responsibly now and get stages 1 and 2 through by ruling out what's unsustainable today and what's unsustainable tomorrow in terms of those long-term tax cuts. Please, let's work together in this term of parliament to give all hardworking Australians a tax cut and stimulate an economy that so desperately needs it. Let's stop playing politics and let's give the economy the boost that it needs without setting it and Australians up for a fall in the future.

11:39 am

Photo of Larissa WatersLarissa Waters (Queensland, Australian Greens) Share this | | Hansard source

I rise to speak on the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019, also known as the 'we bribed you, we scared you, we won and now we're going to give our rich mates a tax cut' bill. This is actually the biggest scam going: most of $158 billion of taxpayer money is going to the top 20 per cent of income earners, and, at the same time, we are reducing penalty rates, increasing the amount that people have to pay back sooner on their HECS debt and continuing to underfund the services that all Australians rely on.

We've got a massive problem with homelessness in this country. We've got women and children who are fleeing domestic violence being turned away from frontline services because the beds are full, but this government won't kick in enough money to build more beds. And yet somehow—somehow—they've found the money to give the top 20 per cent a massive tax cut. They claim this is for economic stimulus. Well, firstly, it's not for five years and, secondly, we know that the rich aren't going to spend the money. They don't need it; they've already got enough. If you want economic stimulus and you actually want to help people then let's give a low-income tax offset to people who don't have enough money in their bank account to meet their basic needs. Let's increase Newstart. It hasn't happened for 25 years and it is well below the poverty line. If you really want to help people ease their daily costs of living, why not provide free child care? We know it's great for the education of young ones. We know it frees up parents to return to the workforce. We know that's a job-creating measure and an investment in the nous and the brains of our whole country. Why not invest in free child care? Why not actually fix the housing crisis? There are 12½ thousand Queenslanders, including children, who don't have a roof over their heads, and all you're offering is a minuscule tax cut. What's that going to do when they still don't have a home?

I'm disappointed to see that many of the crossbench are now supporting this, and I'm expecting that Labor will roll over, like they always do, and support this, despite some of the fairly mediocre, half-decent speeches they have just given. What an absolute crock! As I said, this is the biggest scam going. You guys just scared the electorate about the ghost of Bill Shorten and a made-up crack about death taxes, and now you're using $158 billion of taxpayer money to give massive tax cuts to your rich mates. I mean, well done! You've pulled it off. Credit to you, but Australia is going to suffer from this.

In Queensland, it's not the top 20 per cent that would get this tax cut; only 16 per cent of Queenslanders would benefit from this stage 3 tax cut on the never-never. In regional Queensland it's 1.6 per cent. So what an absolute crock! We have people right around my state, and this country, that are crying out for free child care, for affordable TAFE and free uni, for a roof over their heads and for clean energy projects that can keep power bills down and tackle climate change. What a crock that they're barely going to see any of this tax cut. People want investment in services. That's what will ease their daily cost-of-living pressures. Instead, you're delivering tax cuts to your rich mates. Well, good on you for managing to pull this off.

I think it's an absolutely revolting outcome for this country, and I'm very saddened that the Greens, and possibly One Nation, are the only folk who are actually going to be opposing this when we get to the vote. We'll be moving an amendment to more than double that low-income tax offset, because we think that those folk do need money in their pockets—and they will spend it, because they cannot actually afford their basic living expenses at the moment. You want economic stimulus? That's the way to do it. Rather than increasing the tax brackets, which will flow through to everyone and see rich people get even more perks that they do not need and that are not affordable when the economy is looking as precarious as it is, let's use those measures to actually help people to provide that stimulus, to create jobs, and, hey, why not actually help people in their daily lives?

If you want to fix the housing problem, don't just give the state Tasmanian Liberals a free pass on their own budget balls-up; actually invest in affordable housing. Now, you're going to cry poor because you've just wasted $158 billion, of which $95 billion goes to the top 20 per cent. What a crock! I look forward to your: 'Oh, we can't afford to fix homelessness. Oh, we can't afford to make sure women and children can get a bed when they're fleeing violence. We'd rather see them go back to possible death.' We've had 26 women killed already this year, and we know that services have to turn people away because they don't get enough funding. The Commonwealth has a role to play in that. That funding flows from the Commonwealth to the states and down to those frontline services. Except it's not flowing, because you guys are spending it on your rich mates instead. Well, shame on you!

We'll be voting against this, and we'll be moving amendments to increase the low-income tax offset. I call on the Labor Party: please, reconsider absolute your spinelessness in becoming 'Liberal lite' and waving this through the chamber. We may not have the numbers to stop this, but we should bloody well try. That's what we're here for. We're actually meant to be representing people, protecting their interests. You guys are meant to be an opposition. We're happy to do it if you're not going to, and we intend to do that today, but we hope to have some company.

Photo of Scott RyanScott Ryan (President) Share this | | Hansard source

I ask senators on our first day back, going into formal business and with debate, can we please keep the use of parliamentary language in mind, at least for a little while.