Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

The two biggest tax rorts in this country are thanks to none other than Paul Keating, whose reckless neoliberal policies have destroyed Australia's economic sovereignty. I could talk all day about just how bad Paul Keating was, first as Treasurer and then as Prime Minister. Who could forget the 20 per cent interest rates—

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Senator Rennick, could I ask you to refer to Mr Keating with his title as former Prime Minister?

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

Former Prime Minister Paul Keating—should I say 'former Prime Minister Paul Keating' or just 'former Prime Minister', because there are lots of former prime ministers?

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

'Former Prime Minister'.

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

Okay: 'former Prime Minister Paul Keating'. Who could forget the 20 per cent interest rates or the 11 per cent unemployment? I'd love to discuss them with the man himself but he's been too gutless to reply to my request that we debate his destructive policies.

If we look at table 1 in the budget papers and the two biggest tax concessions, they are capital gains tax on housing and the concessional taxation of superannuation.

Who benefits the most from these concessions? I'll tell you who: the wealthy. If you were going to design a tax policy, wouldn't you want to give concessions to low-income earners rather than giving tax concessions to the wealthy? You would think you would give it to the low-income earners so they would be able to keep working and keep bread on the table. For some reason, the Labor Party seem to have walked away from its base, the working class, and has instead for the last 35 years been more interested in giving tax concessions to the inner-city champagne socialists.

Don't get me wrong here. I'm all for creating wealth, but it needs to be taxed evenly at the margins to create wealth rather than accumulate wealth. By that I mean every dollar should be taxed at around the same rate with an exemption for low-income tax earners, who should get a tax-free threshold for the cost of living. At the other end, for those PAYG earners—the guys who get paid millions to run companies—by the time companies are paying their executives millions of dollars, the executives are usually running the companies into the ground rather than growing them.

I fail to see how someone can make millions of dollars in capital gains from housing, which is often the case in the wealthier suburbs of Sydney and Melbourne, and pay no tax, while hardworking Australians pay 20 cents on their hard-earned income above $18,200. When Keating exempted housing from capital gains tax, he gave a tax break to wealthy Australians and an incentive to pump way too much money into housing at the expense of manufacturing. As a result, today house prices are out of reach for younger Australians and a burden for working Australians whose mortgage repayments are a lead weight in the saddlebag of their weekly income—not to mention manufacturing, which was gutted under Keating's reckless now Liberal policies.

Let's look at the other rort in the news this week: superannuation. We've got the Labor Party—in particular former Prime Ministers Keating and Rudd—telling us that superannuation is going to provide a decent retirement. I can tell you: there's nothing further from the truth. If you go and look at the ASFA Superannuation Statistics, the median balance for women aged 55 to 64 is $118,000; the median balance for men is $183,000. There is no way that you can live for the next 20 years in retirement on that type of balance in your superannuation. You are never going to reduce the reliance on the pension with balances like that.

Furthermore, the irony of all this is that former Prime Minister Paul Keating also gave independence to the RBA because he thought there'd be a better decision-making process and that the RBA could somehow manage monetary policy better than politicians. Guess what? We've now got interest rates running at zero, record foreign debt and record house prices. When someone goes to retire with $118,000 in their super, if they're a woman, or $180,000, if they're a man, how are they going to live on one or two per cent interest on that type of balance? That works out at about $1,000 or $2,000 a year. You'd be lucky to live for a week on that, let alone an entire year. This whole concept that superannuation is going to provide a better retirement is a fallacy.

To have a decent nest egg for low-income earners they'd actually have to put about 50 or 60 per cent of their income into superannuation. Low-income earners can't afford to put in 9½ per cent. They need every cent they make today. Even the Henry tax review explicitly recommended against lifting the superannuation guarantee because of its punitive impact on lower-income earners in that wages are foregone when the superannuation levy is lifted. It's not just my opinion. The former opposition leader, the member for Maribyrnong, Bill Shorten, when he was asked, said:

Because it's wages, not profits, that will fund super increases in the next few years. Wages are the seedbed of the whole operation. An increase in super is not, absolutely not, a tax on business.

He goes on to say in another interview with Neil Mitchell that superannuation will be absorbed as a part of people's pay rises. So the hardworking people of Australia don't get to see their income. It goes straight to Labor's mates in the unions so they can clip $40 billion a year in fees, on top of the $40 billion in tax concessions—that's $40 billion a year in fees ripped out of the pockets of hardworking Australians. The tragedy in all of this is the fact that we've hardly had a reduction in the number of people on the pension. It's reduced from about 74 per cent to about 70 per cent for the pension or part-pension.

Let's not forget with those numbers that, since superannuation was increased, the pension age was increased from 65 to 67. Who did that? Former Prime Minister Kevin Rudd. If you were to put the people who should have gone onto the pension at 65 back into those numbers, the number of people on the pension would probably still be about 74 per cent. So we're giving $40 billion in tax concessions and $40 billion in fees for nothing. We've still got the same number of people on the pension, except—wait for it!—the number who now retire with a mortgage has increased from 40 per cent to 70 per cent. So we've got more working Australians in hock to the banks for interest throughout their entire working life, and they can't even retire with the security of knowing they own their own house.

The Liberal Party was founded by a guy named Robert Menzies, and in his 'Forgotten people' speech he mentioned the word 'home' no fewer than 23 times. There is no better form of retirement than your home. There is no better standard of living than to own your own home so that you've got the security and peace of mind that every night you can go home to your house. You can go home knowing your children have a bed to sleep in, a roof over their heads and a happy home environment to give them the self-belief that they need to be successful in life.

What is interesting about this as well, touching on the Keating legacy, is that, when he gave independence to the RBA, he let the foreign banks in. We now have inflated house prices, and we've got to the point where we've got very high house prices compared to average incomes. The RBA came out yesterday saying—it was snuck through in the minutes, which no-one can read because it's like watching paint dry; but those of us who worked in capital markets know what to look for—that they've increased the funding facility to private banks for $200 billion. So, instead of actually going out there and funding the building of infrastructure that will give Australians jobs, they're continuing to reward what they call the ADIs, the Australian deposit institutions. That can be any bank that takes deposits here in Australia, so it can be domestic banks or foreign banks. Remember, the former Prime Minister Paul Keating let in those foreign banks, which inflated house prices. I think that's a real shame, because right now we need development in infrastructure. We need dams. We don't necessarily need more power generation, but we certainly need more power transmission and lots of transport corridors. And that would be a great way to grow the economy and drag us out of the recession.

In concluding, I'd just like to remind the people that we are supposed to be living in a liberal democracy. There was never a pledge by any politician that said, 'We are going to raise superannuation to 12 per cent by 2025.' (Time expired)