Tuesday, 27 September 2022
Questions without Notice: Take Note of Answers
That the Senate take note of the answer given by the Minister for Finance (Senator Gallagher) to a question without notice asked by Senator Cash today relating to taxation.
We saw today a remarkable example of what we know is a broken promise from the newly elected government—they've already broken a promise—and then the flagging, or at least not ruling out, of more broken promises on potential tax increases in the future. As I said, we already know that the promise that the Labor Party made to the Australian people to reduce their electricity bills by $275 a year has been broken. That has been broken. The now Prime Minister told the Australian people on multiple occasions that if he were Prime Minister he would lower their electricity bills by $275. There were no conditions; there was no fine print; there was no little asterisk next to it: he promised people that their electricity bills would come down by $275. He said he'd done the modelling and it was all going to happen.
Then, within weeks of winning that election and winning the trust of the Australian people, he turned around and walked away from that promise, and we've never heard the words 'two hundred and seventy-five' come out of the Prime Minister's mouth again. Now we get vague commitments to put downward pressure on electricity prices, but there's no commitment to do what the Labor Party actually said it would just a few months ago.
Today, once again, there was an example of that. Senator Cash asked Senator Gallagher: 'Will you deliver on your promise'—not our promise; your promise—'of $275?' No, no, no; there was no commitment at all. They've already broken a core promise. It is an absolute world record for a newly elected government to break a promise that they made just months ago, and that's going to be confirmed in the budget in a few weeks' time.
Not only that; we can now see that there's going to be a laundry list of broken promises from this government. You can just see it, and there is now another one on the list, which was confirmed at question time today. When asked whether the minister could rule out any changes to franking credits, they wouldn't rule it out. Now, we all remember—it wasn't just during the election; it was years before the election—that the Labor Party said no, they wouldn't touch pensioners' franking credits. They'd learned from their mistakes—remember, from the 2019 election—and they were going to make sure that pensioners in this country could receive the full return on their investments that come through dividends and, in particular, through franked dividends, which mean that you do not pay taxes twice.
When the company that you've invested in pays taxes, it makes sure you get a credit, effectively, for those taxes so you don't get doubly taxed. But the Labor Party now, in failing to rule this out today, are putting on the table another prospective broken promise to double-tax Australian pensioners. They'll put two taxes on Australian pensioners. They'll tax the companies that they invest in. That happens. That's appropriate. Then they'll tax the income that pensioners have just to try to survive. It's very hard at the moment, with costs going up for almost everything. Food prices are going up and electricity prices are obviously on the way up. It's hard for those on fixed incomes, for those who rely on investments. They have very little ability to supplement their income with other work or other means. It is very hard for them, and the Labor Party is failing to rule out a potential tax on them.
This is very concerning, not just because of the broken promise. For anyone who is following what is going on around the world, what is happening in global markets is very, very concerning. The British pound has crashed over the weekend and remains under pressure. Government yields are up for all countries, but especially those in Europe. The Treasurer has said, rightly, that we will not be immune from these changes. But what we definitely do not need in this country is more taxes or even the prospect of more taxes, because that will kill confidence. That will presage or bring forward any potential economic downturn because investors and others will be concerned about whether the Labor Party is going to break another promise and increase taxes. They will therefore spend less today and potentially invest less. We may get the economic virus that is circulating right now primarily in Europe and a little in America. It may come to this country.
We will see in a few weeks time, when we're back here in late October, what the Labor Party does do for their budget, but it doesn't look good. The entrails for their budget are not looking good. They've got form now from breaking one promise. They're possibly about to break more. We will be watching and making sure that the Australian people understand that the Labor Party hasn't left its addiction to new taxes with the previous Rudd-Gillard government. It is on form. It is going back to form. It is breaking promises and increasing your taxes.
Those opposite broke the budget. What Minister Gallagher outlined to the Senate in question time today is a plan to fix the budget and deliver on our promises, the promises we made before the last election—not the election before that or the election before that. We've made it clear that we have an agenda on multinational tax reform. We've outlined a plan for a better budget, a plan to ensure that revenue will return to our national coffers so we can keep the country running and be clear about savings we need to make in order to fix the budget that those opposite broke. This is the plan that saw Labor get elected.
When those opposite were last in government, just recently, they were the highest taxing, highest spending government in history. It's all very well for those opposite to ask questions about ruling out tax increases or new taxes on Australians in the coming budget, but we take seriously the responsibility of balancing our budget. We take seriously the responsibility of balancing our nation's need for good-quality public services—not the waste and rorts those opposite put forward—with the need to make sure that multinationals pay their fair share of tax, that the big end of town that those opposite let off the hook so often is there. When Australians spend their good hard-earned dollars with big companies, we don't want to see jobs and profits all going offshore. We want to see companies that have derived great benefit here on our shores paying their fair share of tax.
Let's talk about lower taxes. Why won't those opposite come on and support lower taxes on electric vehicles? That would be a great idea. We have the opportunity as a Labor government to implement what we took to the election. How about those opposite critique the policies that we took to the election, not have the arguments that they would like to have because they suit them? The simple truth is that those opposite can't put a finger on it. They can't even get close, because they know what a bad job they did. They know the mess that they left this nation in. So what are we left with? Made-up catastrophising. They're not here to critique Labor's plan for this nation; they're here to run their own scare campaign.
Seriously, this October we will have a budget ready to implement our election commitments. It will also be a budget that has to deal with the waste and rip-offs that those opposite buried in the budget. That was highlighted, frankly, in other parts of answers to questions this afternoon, when those opposite tried to ask questions about Medicare and the need and how expensive Medicare is, only to learn from Senator Gallagher that in fact there's no sustainability in the health budget that those opposite left us when serious things like adult dental care—such fundamental pieces of health care—were just expiring pieces of expenditure.
So I take pride in what our Labor government is doing. There's no depth to the questions asked by those opposite today. We saw 22 failed energy policies, a 20 per cent increase in electricity prices, and policies that you buried before the election that saw absolutely no outcome for Australians on the energy price increases that Australians have suffered through because you were missing in action on policy.
It's a real pleasure to be able to make some comments on this matter coming out of question time. Of course, question time is generally, in my view, one of the greatest wastes of public funds, because it's a theatre. It is a pretty contrived process, and all these additional questions and whatnot are pretty low-rent stuff, aren't they? But it is important that we in this chamber do our best to hold the government to account, and it is a pretty weak government. It has very few policies, and it already wants to crab-walk away from its promises on the economy.
There's a pretty important philosophical difference of views between the major parties, and that is that on this side we believe that the government has no money on its own. The money that it is able to spend it levies from the people and from organisations like corporations which are required to pay tax under the tax laws. The lower taxes are, the greater the chance is that you will have private investment. Private investment is what is required to create opportunities and employment in this country, and what we're now seeing is the spectre of higher taxes being flagged and dripped out through the financial press in the lead-up to this budget. We've already seen the Treasurer giving very lukewarm support to stage 3 tax cuts, which is very interesting and illuminating, you'd have to say, but perhaps not surprising, because I'm sure that the government actually don't believe in the stage 3 tax cuts, because they've never really been committed to aspiration.
The point of the stage 3 tax cuts is really to do two things. The first is to reward middle-income earners by ensuring that they are not pushed into higher tax brackets. It might suit the budgetary and fiscal strategy of the government of the day to have higher tax collection because of bracket creep. But cutting taxes for middle-income earners by removing these tax brackets and thereby delivering the removal, effectively, of bracket creep means that people can actually keep more money that they've earned. So, if you do another shift or you do some more hours or you do something else in relation to paid employment, you keep the money, not Canberra. I would have thought that that's a pretty reasonable proposition. For middle-income earners—on 60, 70 or 80 grand a year—that is what they will be facing. They would have faced higher taxes due to new tax thresholds, which we've abolished. The tax thresholds have been abolished as a result of the stage 3 tax cuts.
But the other point—and I know it's not fashionable—is that we actually do want to be a competitive economy. We want to attract high wage earners into this country, because we have massive skills shortages. You want to have a song and dance and have a skills summit and talk about how you want to improve our economic capacity. But every person who runs a company in this country will tell you that in the short term some of the skills can't be delivered from the domestic stock. So, we need to bring people in, and we have a very uncompetitive tax system. At a very low level of income, the highest possible tax threshold kicks in. It is very uncompetitive when compared with the systems of Singapore, Japan and countries that we are competing with right now in our time zone or close to our time zone. So, if you want to reward middle-income earners and you want to be a competitive, dynamic economy, then you need to retain the stage 3 tax cuts.
Of course, the other spectre we're now looking at is the return of the dreaded franking credits tax, whereby, as Senator Canavan has set out quite eloquently, people will be facing double taxation. They've already paid taxation. The companies have paid taxation. And now they'll be looking at the return of a new tax in retirement which has not been taken to any election. So, although I'm not a huge fan of question time, it's very important that we use question time to ensure that we don't foist new taxes on the Australian people. We don't want to see new income taxes or higher income taxes, and we certainly don't want a see new retirement taxes or savings taxes.
Senator Gallagher gave a very comprehensive set of answers to the question she was asked about tax. She also detailed an amazingly important set of priorities and the way in which this government is going to go about looking at the $1 trillion of debt that has ben inherited and the deficits of around $200 billion across the forward estimates per year. In those answers she detailed extensively the tests that the government is going through, looking at the various measures, seeing whether they stack up, seeing whether they meet the quality test of being needed and whether they can be delivered. It was comprehensive and it was studied and measured. She talked about priorities and how we are going to have to return money to the budget because of that $1 trillion in debt and the cost of servicing that debt.
The analysis Senator Gallagher gave in question time also gave her an opportunity to talk about the Albanese government's plan to fix the budget and deliver on our promises—promises that won us government; we won the election. And in what she detailed and what we detail, we've been very clear about our position on tax, and that has not changed. Our priority when it comes to tax reform is ensuring that multinationals pay their fair share of tax here in Australia. What is wrong with that? Nothing is wrong with that. It is clear policy. It was outlined during the election campaign. We won the election. And what Senator Gallagher has said is that we are going to do that.
The last government was one of the second highest taxing governments in the past 30 years, behind the Howard government. It's pretty rich that we're sitting here listening to questions about tax cuts from people who were in the second highest taxing government in the past 30 years. What Senator Gallagher spoke about and what we're very proud of on this side of the chamber is the government's electric car discount, which will help make electric cars cheaper and more affordable to families by reducing tariffs and fringe benefit tax liabilities. But the coalition is opposing this tax cut for families and small businesses, so we get questions about tax cuts. Yet here we have a policy which we took to the election, which is quite clear, which has been spelt out time and time again, and yet the coalition, who says that they are for tax cuts and that they don't what new taxes, will not support a tax cut for families and small businesses in relation to the electric car discount.
Let's look at that. The electric car discount has a two components. It will remove five per cent tariffs for eligible cars with a customs value falling below the luxury car tax threshold for fuel-efficient vehicles, which in 2023 is $84,916. It will also provide an exemption from fringe benefits tax for eligible cars below the luxury car tax threshold for fuel-efficient vehicles. Two things in one. It's good for the environment and it's great for families and for small businesses. That is what we're going to deliver.
We are also going to do is, in a responsible way, look at the budget line by line to see what fits the bill and what can be afforded, and, as the senator outlined, to find all the things that have been hidden by the former government, which are there sneakily and which were unfunded. This is what the responsible government does and that is what was outlined in the answer to this question. Rightly, it takes time, and time has been taken. Certainly, looking at the questions that were asked, the senator made absolutely fantastic points, was clear and absolutely stood by the policies that won this government the election.
I find it a little bit—well, it would be amusing if it weren't so serious, listening to this Labor government and its supposedly comprehensive answers. I don't think we have heard anything comprehensive in terms of answers or the lack of answers that are being provided to us here at question time. What I do hear is that there is an ongoing theme going on here. I think Labor is just hoping that if you say the same thing over and over again, if you repeat mistruths, the general public will accept them as truths.
This Labor government would be in a most unfortunate situation if they were to end up being confronted with another global pandemic. As they keep telling us, it was the former coalition government that has left this budget in a dire situation, despite the fact they've got $50 billion in their back pocket. I would remind them of what it was that the former coalition government achieved in those dire times: providing $314 billion in economic support during the pandemic, helping Australians get to the other side of the greatest economic shock since the Great Depression. This included the JobKeeper program, the single biggest economic support program in Australia's history. The Reserve Bank of Australia said that JobKeeper saved at least 700,000 jobs, and Treasury said it prevented the unemployment rate from reaching 15 per cent.
From across here, we hear there are plans and plans and plans and lots more plans. But they cannot detail those plans. They cannot provide answers when we question those plans going forward. The questions put to Minister Gallagher were very simple, and the answers were not comprehensive. We heard a bit of fluff about multinational tax reform, and, as we've heard just now, this wonderful lowering of tax on electric vehicles—wow! That is really going to help the everyday mums and dads out in the regions! That's really going to help the everyday mums and dads, the middle-income earners, the low-income earners. It's going to help them incredibly—much better than the promised $275 decrease to everyday Australians' bills, a promise that has not been kept at all by this government.
I would remind the government: perhaps use a bit of common sense. Take a leaf out of our book in understanding that it is the private sector, not government, that drives opportunity and prosperity, and that resilient small businesses, not bureaucrats, are the backbone and the strength of our economy, and that families know what is best for them. I can tell you now: there are probably only a handful of families in this nation who would even be able to benefit from this wonderful lowering of tax on electric vehicles—certainly none of the families I'm concerned with in the Northern Territory. Perhaps your mates in big business will benefit from the lowering of those taxes. Please, put everyday Australians first in this next budget. I hope that's what this government is going to do, but I won't hold my breath.
Question agreed to.