Speech - Address In Reply








In speaking on the address-in-reply, I want to address the government's industrial relations agenda in particular, which it is still trying to get through the parliament. At the core of this agenda are two bills: the registered organisations bill and the ABCC bill. The government says it is all about cleaning up corruption in Australia. They say it is all about making building and construction more efficient. But I say it is about the Liberals' signature policy; I say it is really about Work Choices.

The Australian labour movement was the only thing standing between Australian working families and Work Choices in 2007, and it, along with the Fair Work Act, is the only thing standing between them now. These bills are all about crushing the labour movement. On the other side of this chamber, they have clearly not forgotten 2007. So it is not about a union watchdog; it is about letting the dogs loose on workers' conditions, across the entire Australian workforce.

These bills are about smashing our trade unions. These bills are about lifting the profit share even higher. These bills are about trying to further drive down the wage share of our national income. This is a recipe for weaker growth, precisely at a time when the global economy is the most vulnerable it has been since 2008-09. These bills are part of the Liberal Party's economic approach that will lead to further wealth concentration, not wealth creation.

The IMF rejects the trickle-down economics which are embraced by these bills. What do I mean by 'trickle down'? The notion that if you give more resources to the rich, the benefits will simply trickle down and, magically, we will all be better off. It is a notion that is disproved by our experience, across the developed world, of concentrated incomes at the top; hollowed out middle classes, particularly in the United States; and armies of working poor. If you ask any person in the street about the registered organisations bill or the ABCC bill, they would not be able to tell you much. But if you ask them about the Panama papers, they might have something to say about that.

So these bills say a lot about the government's priorities. This is the government's spiteful vengeance writ large. In effect, those opposite took our nation to an early and expensive double-dissolution election over something that was not an issue on the street.
The issues on the street are entirely different. Families are asking how on earth they can juggle the strain of wages that have actually gone backwards over the last year. They are asking how they can absorb this government's hit on the social wage by cuts to Medicare that directly impact on family health costs. Expectant mothers are asking how they cope with cuts to paid parental leave. Students are asking about the explosive increase in the cost of university degrees. And of course all are asking about the threat of penalty rates they earn from an out-of-hours or weekend job. If they are a family with kids, they are asking serious questions about the future of education in this country. In Lilley, over 40 schools will lose an average $3.2 million—the equivalent of sacking one in seven teachers.

So this government's agenda fails what I call the motivation test. In public life, it is not just what you do; it is all about the way you do it and it is all about why you do it. LNP governments never find their policy priorities in the daily struggles of middle-income Australians; they find them in the musty boardrooms of corporate Australia and the mouldy hallways of the Institute of Public Affairs. And what are they doing? What they are doing is attacking the labour movement. It goes to the very core of their being.

It is ironic that we went to an election over productivity on building sites at a time when the ABS data clearly shows that productivity in the construction industry has been surging since 2011. It is equally telling that, at a time when corporate tax evasion is rampant and the Panama papers have disclosed corporate transactions that are questionable, the government's IR bills contain higher penalties for civil contraventions by union officials than apply in the Corporations Act for directors of companies. What is truly alarming is: construction workers will be investigated by the ABCC and will be denied the most fundamental and basic legal rights—the right to a lawyer of their choice as well as the right to remain silent. Everyone in this House should just dwell on that and reflect on that. The Prime Minister simply has not told the whole truth. He wants to take away the legal rights of trade unions but leave them in place for his corporate high-flyer mates.

This is the ugly hand of greed and class politics at its worst, and the Prime Minister has his fingerprints all over it. While the Australian people are worrying about jobs, working conditions and attacks on the social wage, their Prime Minister is working to crush the very organisations that are the last line of defence against growing wealth and income inequality. So there is a stench of dishonesty about this government—a stench of dishonesty about their agenda, their motives and their foul propaganda. They are all the same, no matter who leads them. Tony Abbott's baton has simply passed to the next runner. People hoped that Mr Turnbull might not have been the same. He was a little smoother and more polished. But scratch the surface and he is just the same. Turnbull and Abbott both fail the motivation test. The Liberal and National parties have simply replaced someone who would say and do anything to be Prime Minister with someone who would say and do anything to be Prime Minister. The election result proved that Australians are doubly disillusioned with Mr Turnbull.

Make no mistake: just as they are hiding a workplace agenda behind sloganeering against trade unions, they are also hiding the truth about their fiscal policy behind deceptive slogans. They say: 'We are not spending like Labor,' when the reality is that they are almost two percentage points of GDP higher than Labor. 'We are not taxing like Labor,' they say, when the reality is that, as a proportion of GDP, taxes are higher, consistently, under the Liberals. 'It's Labor's debt,' they say, when the reality is that Turnbull and Abbott have tripled the deficit. And the list goes on.

Mr Turnbull and Mr Abbott say, 'We need a company tax cut to generate growth and jobs,' when the reality is that the ATO data shows that private companies in Australia pay, on average, a tax rate of only 19 per cent when weighted for company size and before taking into account deductions, deferred losses, minimisation and evasion.

Who could forget that they have managed to spend $80 million on a trumped-up royal commission into trade unions but have dragged their feet and doing anything about multinational tax evasion, including voting against every measure Labor introduced in this area whilst we were in government. But courtesy of Labor's transparency legislation, which the Liberals voted against but which was passed in 2013, we now know that over a third of all public companies paid no tax in 2013-14. We know that half of all foreign companies in Australia paid no tax. We know that one in three private corporations paid no tax. We know that 55 millionaires paid no tax. And we now know through the Panama papers that around 800 high-net-worth individuals have connections to activities in tax havens.

In the face of this evidence, it is farcical and tragic that the Prime Minister and his ministers can keep a straight face and claim Australia has a spending problem and not a revenue problem, and continue to lay at the feet of trade unions the blame for their economic mismanagement. The Panama papers revealed that the increasing use of tax havens by multinationals and high-wealth individuals has reached epidemic proportions. Some of Australia's largest global companies have been exposed. When global companies operate in a cavalier way, it normalises this behaviour and gives the green light for everybody else to have a go. Tax havens are used by individuals and corporates to keep their activities in the shadows.

For years, Australians have watched the Liberals pander to corporate and media interests. Now, in a world where inequality is rampant, how could anyone have any faith in a leader who professes to believe in equality of opportunity but leads a government that has opposed strong measures to stamp out multinational tax evasion and has voted in this parliament against those measures? And all the while he was doing this he was a fully paid-up member of the Cayman Islands club, watching his capital fund grow under the palm trees. If this was a leader with faith in his leadership, faith in his Treasurer and faith in his country, he would put his money here, not in the Cayman Islands.

The use of tax havens by wealthy individuals and corporates is destroying progressive taxation right across the developed world. The principal reason for using a tax haven like the Cayman Islands is to avoid tax, either in countries where they live or are based or to act as an end point for tax minimisation. Strong actions against tax havens will never be taken by public officials who use them. That much is very clear.

Tax avoidance and evasion is a huge part of the trashing of public faith in democratic legitimacy right around the world. We are seeing it play out across country after country. Everyday workers have a sense that the economy is an inside-outside game in which the wealthy play by different rules and everyone else is denied opportunity.

It is clear, for example, that over a decade there has been a culture of tax avoidance and evasion at BHP, as they plan to evade tax on $5.7 billion held in their Singapore tax shield. Not only have they flouted federal tax law but they have also behaved disgracefully in seeking to avoid state royalty payments. No wonder there is a revolt going on in Western Australia when you look at what they have been up to with transfer pricing. Transfer pricing is exploited when a company sells a product between two arms of its operation in order to book its profits into a lower tax jurisdiction. The BHP take shield in Singapore is used to smuggle profits out of Australia. Mr Beavan, BHP's chief financial officer, may choose to cutely describe aggressive transfer pricing as a 'valuation dispute'. But, in a world in which we all live, it is evasion.

We have still yet to hear from the BHP board any cogent defence of its actions despite these matters being raised with it by the media and others at its recent meeting in London and its meeting only last week in Brisbane. BHP does have an experienced board, but this board, individually and collectively, has questions which need to be answered—very serious questions. The board has not been true to the values that it espouses in its charter of corporate responsibility.

It is very disappointing that when they were in Brisbane they did not provide any defence of the fact that they have diddled the people of Queensland of very substantial amounts of money through transfer pricing on loyalties to the extent that, from the Queensland revenue office, they now have a bill for $300 million. It is not clear how much they may owe to the same revenue office in the state of Western Australia, but it could be substantial. The governments of Western Australia and Queensland have been treated very, very badly by the big Australian, because the evidence against them is damning. Over a decade BHP has ramped up its Singapore marketing hub to camouflage aggressive transfer pricing which has cost Australia taxpayers at least $1 billion. Historically, BHP has wrapped itself in the Australian flag, but this sort of behaviour would indicate that it is simply a meaningless gesture.

In the face of all the international evidence—when we would put together what has been going on in the government's actions against the trade union movement, its attempts to provide unfunded tax cuts to multinational companies, the farce of its jobs-and-growth slogans—one thing is clear in the international economic debate. We need a fairer distribution of income and wealth to drive economic growth. The increasing concentrations of wealth and income is a handbrake on global growth, holding back the global economy. The only answer our government has is a 1980s trickle-down Reaganomics-type agenda, where workers have fewer rights and lower wages, and companies enjoy lower tax and lower regulation.

There is only one problem with that formula—it suppresses demand. Demand is what is seriously lacking across the global economy and seriously lacking even in our own. You do not solve that problem by needlessly and stupidly attacking workers rights and workers conditions—attacking the minimum wage and attacking penalty rates. In this world, it is okay for Malcolm Turnbull to attack Bill Shorten and other Labor MPs for being former union officials, but, apparently, it is not okay—in fact, it is class war if anyone mentions Turnbull is a multi-millionaire advocating policies that benefit people like him. It is okay if people are attacked on our side of the House for defending workers' rights and standing up for decent wages, but, if anyone mentions the Prime Minister is a multimillionaire advocating policies that will benefit people like him, they scream 'class warfare'. They had no trouble rustling up $80 million of taxpayers' money to fund a royal commission into the trade union movement, but they refused to hold a royal commission into banking and financial sector practices or to deal with the 800 individuals the Panama Papers have disclosed as tax avoiders. There is a fundamental intent on that side of the House to break unions—and when you break unions inequality inevitably follows.

This is the story of what has occurred in the United States over the last 30 years, as the wage share has gone down, the profit share has gone up and their economy has struggled. They have a hollowed-out middle class, an even bigger army of working poor and an obscenely low minimum wage. That great country has been crippled by trickle-down economics, it has smashed its middle class and now it is busily smashing its society and the cohesion that is so essential. If people in a country cannot have an expectation that growth will deliver for them and their living standards in the future and they have no faith that their kids will have an opportunity and living standards in the future, the optimism so essential to the working of a healthy capitalist economy disappears—and, when that disappears, social cohesion goes with it.

The fundamental attempt embodied in the government's economic agenda really comes back to three bills: the two industrial relations bills on the one hand and the tax bill to give a $50 billion unfunded tax cut, mainly to multinational companies, on the other. It screams out as being an extreme trickle-down agenda, directly the opposite of what responsible organisations like the IMF are now recommending to developed economies around the world. To cover up for its wealth concentration agenda and to pretend it is somehow a wealth creation agenda, the government goes out there and ramps up its attacks on unions, Medicare, the NDIS, public schools and the public sector generally. There is story after story in the papers—you can set your watch by them. On a Sunday, there will be another story about how the tax system is carried by a few, how most of the people getting benefits are bludgers and should be knocked off, how the NDIS is simply unaffordable and how the welfare system is an unsustainable burden. Despite the fact that we have one of the most targeted, efficient welfare systems in the world, this diet of propaganda comes out to camouflage the government's real intent.

That is why I believe there is a rapidly growing divide between the government and the people in this country. I also believe that this divide has the potential to severely disrupt our political system, across the whole political spectrum. There is a wealth divide that is getting more obscene. The power divide is growing day by day as, in particular, the government sets out to silence the voice of working people. The drive from the government and its sponsors is simply to do one thing: increase the profit share in the economy and decrease the wage share in the economy. As I have said before, this is self-defeating economic policy that the IMF tells us will lead inevitably to weaker growth, not stronger growth. I have a fervent hope that there are some responsible voices somewhere out there in the business community—obviously not in the Business Council of Australia—who will speak out about how lopsided and self-defeating the government's agenda is. I know there are many that oppose it, but we do not hear their voices. What it is leading to is not only wealth and income inequality but increased political polarisation—and it all flows from the survival-of-the-fittest mentality at the top of this government, whoever leads it.

I believe that all Australians create wealth, from the cleaners here in Parliament House through to the executives who run the largest companies in the land. Everybody is a wealth creator and all Australians deserve a voice in our economic debate and a stake in our economic prosperity. On this side of the House, we will fight for that voice.