Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

enator McKIM (—) (): I move:

That the Senate take note of the answer given by the Minister for Finance (Senator Gallagher) to a question without notice I asked today relating to corporate profits.

I want to start by making the point that in all three of my questions—the primary question, the first supplementary and the second supplementary questions—despite my explicitly referring to the issue of corporate profits and specifically asking about the issue of corporate profits, Senator Gallagher could not bring herself to say the words 'corporate profit' in any of her responses to my questions. The facts are these: corporate profits in Australia are at record highs—they are soaring and they have never been higher—and corporate profits are significantly contributing to inflation and they are significantly contributing, therefore, to the cost-of-living pressures facing ordinary Australians.

In the House today, the Treasurer, Dr Chalmers, gave a long speech telling Australians that they should brace themselves for hard times ahead. He told Australians to brace themselves for higher unemployment and for their real wages to go backwards—or, I should say, to continue to go backwards. And he warned us to brace ourselves for those things because interest rates are going up. It was a speech heavy on the hand-wringing, heavy on the old 'we don't want to gloss over the glaring issues' schtick and heavy on the old 'we can't bury the bad news' schtick. It was the Treasurer doing his best ashen faced routine. But what was most striking about his speech was what he didn't mention, and what he didn't mention is that corporate profits are soaring. Corporate profits are at record highs, and a record high rate of Australia's income is being siphoned off by private capital. And not once did the Treasurer mention that these record-high corporate profits are actually a primary driver of inflation in Australia. That is a critical point, and it's a point that the Treasurer didn't make today in his speech in the other place, and it's a point that the Minister for Finance, the minister in this place representing the Treasurer, refused three times to acknowledge today.

Two weeks ago, the Australia Institute released research which showed that Australia is at the beginning of a price profit spiral. Their analysis found it is rising profits, not rising costs or rising wages, that are driving Australia's inflation. The executive director of the Australia Institute, Richard Denniss, made the obvious point. He said:

While workers are being asked to make sacrifices in the name of controlling inflation, the data makes it clear that it is the corporate sector that needs to tighten its belt.

Earlier this week, former ACCC chair Rod Sims said that one of the ways that big corporations can help fuel inflation is that, 'when there is high inflation, dominant firms often realise they can increase prices above any cost rises because consumers will be more accepting of this'. In other words, when inflation is running hot, corporations with market power, which many Australian corporations have, use this as cover for profiteering. This is fundamental stuff, obvious stuff.

By all accounts, next week the RBA will again increase interest rates, and this is going to hurt the most those who live below the poverty line, as always; renters, as always; and new home owners, many of whom bought because they believed the Governor of the RBA when he said rates weren't likely to move until 2024. But these people who are about to feel the pain because inflation is running hot have had little or nothing to do with causing inflation to run hot. Instead of giving corporate Australia a free pass, the Treasurer should be telling corporate Australia to brace itself for a superprofits tax. We need a super profits tax in this country to raise $460 billion in revenue so that we can do things like free child care and put dental and mental into Medicare to address the cost-of-living crisis.

Question agreed to.