October 18, 2017
I rise to speak on the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017. I want to add my voice to those who oppose this bill and outline some of the issues with it, to reiterate what we’ve heard from some of the previous speakers. This government has introduced legislation that would implement the remainder of the government’s company tax cut plans, providing companies with a turnover above $50 million with a tax cut of 25 per cent, costing around $600 million over the forward estimates and around $36.5 billion over the medium term. In the final sitting week before the budget, the government managed to successfully pass through the Senate part of its company tax cut plans, managing to pass a tax cut of 25 per cent for businesses with a turnover of over $50 million.
Consistent with our position on company tax cuts, Labor continues to oppose this bill because this bill is fundamentally flawed and fundamentally unfair. Not only is this government proposing to the House a measure which will materially, significantly and structurally damage the federal budget but is also demonstrating the skewed priorities of this government. It is standing up for massive tax cuts to big business and lining the pockets of multinationals to the tune of billions instead of delivering education, health care and affordable housing to the Australian taxpayers, whose money they wilfully spend. This bill is fiscally flawed and morally bankrupt. To speak to the economic inconsistencies in this bill, I reiterate the truth spoken by the member for McMahon, the shadow Treasurer, Chris Bowen, when he said in September, during the second reading debate, that we can have budget repair and a return to budget balance or we can have a corporate tax cut, but we cannot have both. This government has clearly chosen corporate tax cuts over budget repair.
It was about eight years ago when Malcolm Turnbull described $300 billion in projected gross debt as ‘gigantic’. He said, ‘Gigantic! Unacceptable!’ What a stark contrast to his silence over the almost $500 billion—half a trillion dollars—in actual debt his own government currently presides over. This debt will soon hit half a trillion dollars on his watch. Under the Liberals, gross debt has blown out by more than $209 billion, net debt has blown out by $100 billion for the current year and the deficit for this year has more than tripled, from $10.6 billion in their 2014 budget to $36.5 billion now. If only the Liberals would spend less time bickering and briefing against each other and more time working together to address issues that actually affect Australians every day—housing affordability, job creation, education, health care and effective budget repair. Perhaps then we wouldn’t have seen the deficit triple. Perhaps we wouldn’t have seen the net debt blow out by $100 billion this year. Perhaps we wouldn’t have seen the AAA credit rating at risk on their watch. If Malcolm Turnbull and Scott Morrison were actually serious about returning to surplus, they would immediately ditch their $65 billion tax gift for big businesses, including the big banks.
We’ve always opposed this significant structural deterioration to the budget. These cuts are a hit to the budget and show the rank hypocrisy and gross incompetence of a government which lectures the Australian people about the need for budget repair. Do you remember this? They used to talk about ‘debt and deficit disaster’. They used to talk about ‘budget emergency’. Remember that? I do. And yet, on their watch, the deficit has blown out, as I said, and debt has crashed past the half-a-trillion-dollar mark. Put simply, given the debt blowout under this government, Labor cannot support an expanded corporate tax concession that costs the budget $65 billion over the forward estimates. It would not be responsible, and we are for responsible tax reform that is genuinely fair. We have declared this since the plan was first introduced. We’ve highlighted some of the extremely minimal economic benefits of this plan: one per cent of economic growth in 20 years time and an increase of $2 a day in wages in 20 years time. There is negligible wage growth and negligible GDP growth in the government’s own modelling, conducted by the Treasury, and all of this is at a time when wages growth has flatlined and is at record lows, at 1.9 per cent.
Some economic data that was released in September this year recently showed us that living standards, which had been climbing, went backwards in the last quarter. Australian families are facing the nasty cocktail of rising energy prices—electricity prices—stalling wages growth and record high underemployment, and the government have nothing to offer. Absolutely nothing! Let me correct myself. That’s not right. They do have something to offer: they’re offering a handout—a tax cut handout—to millionaires and multinationals. That’s what they’re offering. Their offer is to squeeze money from the most vulnerable in society.
We’ve had long-held concerns about low wages growth. Without a doubt, the dwindling bargaining power of workers and their representatives has played a central role in stagnant wages growth and rising inequality. This is at a time when the government has also supported penalty rate cuts from 1 July this year and has sought to raise income taxes on all taxpayers with incomes above $21,000. So a worker on $55,000 will pay $275 extra a year; someone on $80,000 will pay an extra $400 a year. It goes to this government’s approach and its misguided priorities that its answer for flat wages growth is to cut pay and to have higher income taxes. However, it’s not just the workers and families who are trying to make ends meet that this government is actually targeting; it’s also going after the most vulnerable in our society, as I mentioned. It’s going after the most vulnerable rather than actually asking its big-business buddies to pay their fair share. Only Labor is serious about fair budget repair that doesn’t ask the most vulnerable in our community to carry the heaviest load.
The obscenity of this government’s approach of targeting the most vulnerable is on display in my electorate of Wills. My staff and I have worked tirelessly with constituents who have been targeted and falsely accused—indeed, by the government’s own admission, up to 40 per cent have been given false debt notices—in this government’s disastrous Centrelink robo-debt debacle. It may have left the news cycle, but the repercussions are still very real. I regularly—and I’m sure many of my colleagues do—sit with students, aged pensioners and those with disabilities, and hear their stories firsthand. Their lives are made worse and harder by the irresponsible budget decisions made by this government. There’s a real impact. Of course, we do what we can to represent them in challenging the wrongful debts. We advocate to Centrelink and to the Department of Human Services for their cases to be reassessed and to have an actual case officer look over and see the truth of their situation. I’ve had hundreds of constituents come to my office panicked about the debt notices that they have received—some with a $200 to $300 debt which was incorrect. One had a debt as high as $19,000.
But the underlying issue that I see as connecting these cases is this attack on the vulnerable. This government has a pattern of choosing to target the vulnerable for revenue while favouring the top end of town for tax cuts and exemptions. It has basically prioritised giving millionaires and big business tax cuts and raising income taxes on workers earning above $21,000 over saving penalty rates. It has targeted Medicare—our best safety net—from the very beginning, slashing funds from, literally, the sickest and poorest people in our country. It has targeted students, young families and those who need support and advocacy the most. We can see that clearly in this bill. It gives to companies that turn over more than $50 million—an amount of money, by the way, that does not even register as conceivable to the majority of Australians that this government claims to serve. This plan favours massive corporate tax cuts over hardworking Australians who, daily, place their trust in government. It is a $65 billion ram raid on the budget to be handed straight to multinationals and big banks at the expense of people who work and struggle throughout the country.
It’s obvious that ordinary Australians are losing under this government. I see it, as I said, every day in my electorate office. They are being neglected. And, more than that, they are being wilfully targeted. The government have set out a net, and it doesn’t matter who they catch—whether it’s the tuna or the dolphins. They’ve collectively punished thousands of Australians, some of whom don’t have the wherewithal or the understanding of how to respond, particularly when they’re put on a Centrelink call where they’re waiting for three or four hours trying to speak to someone. Often, they just give up and pay the fine, even though they know it to be incorrect. The lucky few who have managed to make it to the offices of local MPs have, maybe, got the assistance they need to combat this. But it was stacked against them.
The government have, over and over, been proven to lack real economic leadership. It is a fact so evident in their failure to live up to their initial economic promises of a surplus and the structural deterioration in the budget, but also in their neglect of Australians who are forced to fight for their rights to live and work peacefully. It’s for these reasons that I absolutely oppose this bill. Economically, it’s delusional and it doesn’t stand up. The government have actually kidded themselves. They’re trying to kid Australians into thinking that they have our best interests at heart in this bill.
The government are trying to have us think that the best and only way for our economy to grow is to take from the poor and give to the rich, but trickle-down economics doesn’t work; we know that. We’ve seen the evidence overseas. In the US, many of the corporates have held onto the gains they’ve made rather than create employment or pass them on to shareholders through dividends, and it doesn’t work here. By the way, by the government’s own modelling we can see it has a negligible impact. Hardworking Australians will not see the benefits of billions in tax cuts for multinationals; it’s not going to happen. This government will have you believe that this mess is the only way to grow the economy, but never has it been clearer that they are beyond out of touch with ordinary Australians. We can see all of that wrapped up in this bill. Morally, it is bankrupt. It abandons those who need responsible reform the most, and that’s not what government should be doing. Quite simply, it has failed in its economic leadership; it has no economic leadership.
There’s one person at the forefront of all of this: the Treasurer. The Treasurer’s incompetence and failure to do his day job is yet another indication of this government’s failure on economic policy. This is not a sudden revelation; we’ve seen this play out. This is a pattern of incompetence and failure that simply underlies how bad this government is. It’s a blooper reel that would make Joe Hockey blush. It goes to the very heart of the government’s policy vacuum and the Treasurer’s failure.
The Turnbull government needs to ditch its $65 billion big business tax cut instead of relying on zombie measures to prop up its shaky projected surplus in 2020-21. For the sake of the budget and for the sake of all Australians, the Turnbull government must stop clinging to its cruel and unfair zombie measures, which have no hope of passing this parliament. The coalition has no credible plan to bring the budget back to surplus and to protect Australia’s prized AAA credit rating. While it’s trying to help big business, that’s not helping the situation at all. Rating agencies have previously highlighted that a further slippage in the return to surplus would jeopardise this credit rating. If Malcolm Turnbull and Scott Morrison were actually serious about returning to surplus, they would immediately ditch their $65 billion tax gift for big business, including the big banks. Fundamentally and ultimately, only Labor is serious about budget repair that’s fair. We don’t ask the most vulnerable in our community to carry the heaviest load. We want to actually deliver to those most vulnerable, in education, in health care and in housing affordability, and make it better for Australians.