Speech - Appropriation Bills (Cognate Debate)








Thank you Deputy Speaker,

Firstly I want to thank the electors of Lilley for re-electing me for another term in parliament - it's a job I enjoy, I'm humbled by their support and the honour of representing the community for a further term in parliament. I want to say to them that I won't let them down.

These Appropriation Bills implement Malcolm Turnbull's trickle-down economic strategy. We heard some more of it then by the Member for Hughes. I won't respond to all of his inaccuracies but I would make this point: during my time as Treasurer, nearly six years, the Australian economy grew by 15% at the height of the most difficult time in the global economy since the Great Depression. The Great Recession did not impact on this country like it impacted on so many others.

So, at the most difficult time in the global economy, our economy grew by 15% as other shrunk and went into recession. During that time, we created over one million jobs and at the end of that period we had a AAA credit rating from the three major rating agencies. The Member for Hughes had a lot about tax and that's good because I want to say a lot about tax tonight as well. Because one of the reasons his government deficits are three times what they were when Labor was in government and debt is substantially higher by about a third is precisely because tax revenues are down dramatically.

Now he might believe in a Laffer Curve and that there's some magic growth that spurts forward from a cut in taxes across the board, well that's not how economies work anywhere else in the world and they don't work like that here. At the heart of these Appropriation Bills is, as I said before, the Prime Minister's determination to implement what is a pretty extreme program  of trickle-down economics.

What do I mean by that?

The notion that if you give more to the rich, either individuals or wealthy corporates, that they will somehow take that money, wisely invest it, create greater growth which will sprinkle down on everybody else. Of course, it has been trickle-down economics of the variety espoused by the Member for Hughes that has produced such a tragic outcome in the greatest democracy of them all which in the last 30 years has seen a hallowing out of the middle-class and the creation of a great army of working poor. Thankfully, that didn't happen in this country during that 30 year period, half of which was presided over by Labor governments. It most certainly did not happen in this country during the Great Recession which sent other countries into recession, which smashed their labour markets and destroyed the capital base of those economies to the point that many of them are still recovering.

Our structural intervention meant that we secured our economy, we secured our people and as a consequence of that we can have a conversation about a healthy economy and how we might like to reform it in a way in which no other developed economy in the world can begin to have that conversation. 

Now all of these matters were not addressed by the Prime Minister on the night of the election. I would have thought that by the time he got to the Sofitel on election night he might have been able to think of some uplifting words he could have said to the nation. After all, Australia's longest election campaign had been all his idea and his alone.

At the core of that campaign was a commitment to a $50 billion unfunded corporate rate cut. Now, he had a long time that night to think of a few fine, inspiring words he might have said to the Australian people. He is claimed to be one of the most polished and accomplished speakers in the country. By the time he got to the stage in the wee hours of July 3, his speech was about as appetising as the cold spring rolls and stale champagne that had been circulating the Sofitel ballroom for about five hours. That speech by the Prime Minister that night will go down as one of the worst speeches in history by a leader of any major political party in this country.

He commenced by comparing the election outcome to the 1998 election - I thought that was a good idea. In the 1998 election John Howard lost 18 seats, received a minority of the vote but won the majority of the seats and became the Prime Minister. Now in 1998, then Opposition Leader Kim Beazley, delivered what I would regard as one of the great speeches in history, a very gracious speech, despite the fact that he'd received the majority of the vote and lost. And this is what Mr Beazley said in up lifting words to the people of Australia back in 1998, he said "we must as a people turn too each other and not on each other or against each other". Now by contract, two-thirds of the Prime Minister's speech that night only two and a half months ago was spent attacking the Labor Party and all of the people who supported it.

He effectively accused 49.64% of the electorate that voted Labor of being involved in a, I quote "in a pretty shameful episode in Australia's history with more than a few people misled by systemic, well-funded lies”. Whack, whack to 49% of the Australian electorate. As I watched this tantrum unfold, and I'd just got home from my own election function, I watched it unfold and I couldn't believe what I was seeing but I was reminded me of an old comic strip were the Lord of the Manor is speaking to one of his servants. The servant says "Sire, Sire, the peasants are revolting" and the Lord of the Manor replies "yes they are, aren't they?". That is the attitude of our Prime Minister. He thinks that he is here to rule over the peasantry, that's what he thinks. He wanted to blame the people of Australia for not having the brilliance to understand what an important politician he was. Of course, that's why we call him the Prince from Point Piper. 

He's little different from Mitt Romany in the United States, the last Republican candidate for the Presidency of that country who spoke about the 47% of voters who would never support him, to quote him, saying, "because they thought government has a responsibility they thought to take care of them".

Where does that take us? That really takes us to back to the attitude of the modern Liberal Party which has been radicalised and taken over by these United States type Tea Party people. I know the National Party understand that, they spent a lot of time fighting it. Only a Tea Partyer could have gone to election expecting the Australian people to support a $50 billion unfunded corporate tax cut. Just truly spectacular. Of course that's because, and we heard it from the Member for Hughes, their storyline is all Ayn Rand - the whole world just consists of lifters and the leaners and now it's the taxed and the taxed-nots, it's so stupid you couldn't make it up but that is the world that these people live in these days. These radicalised, extreme Tea Partyers who now are running the government's economic policy.

Of course, I know the Prime Minister probably doesn't understand it because, in his world as he spoke to the people during the campaign, as he stood on his balcony there at Point Piper and looked across at the four wealthiest electorates in the country, he doesn't really walk in the same shopping aisles as the average Australian therefore he doesn't get the very basis of why his message is so unappealing at the grass roots level. In his world, people just go to the doctor because it's free - not because people need to go there. In his world, workers’ wages are always too high; in his world business regulation is simply out of control, we shouldn't have any more. And of course, the taxed not's out there are dragging down every body else unless of course they're big multinational companies who are evading tax and don't pay anything at all.

For this Prime Minister to come into this house and lecture the people here and in the community about the moral challenges that we face, the moral challenges of debt when he is giving $50 billion unfunded tax cuts to some of the wealthiest companies in the world who are not going to change their behaviour and take the gift and come back and reinvest here and drive jobs and growth. For him to lecture Australian's on moral cowardice or the Labor Party is simply breathtaking.

A corporate tax cut of this magnitude is not even in the 10 most important actions you'd take if you were really trying to power jobs and growth in the circumstances we are in here in Australia given the context of the international economy. And particularly so, and I wish the Member for Hughes would have stayed, because I want to demonstrate why it is such an act of stupidity, an act of wealth concentration not an act of wealth creation to offer a $50 billion  unfunded tax cut of that nature.

Now, thankfully Labor, one of the last acts in office, was to put in place tax transparency legislation which force the corporates to publish total income, taxable income and total tax paid so now we know what's going on in that area. Of course, the average effective rate of tax paid in Australia is not 30% it's 24% and if you're a private company, not a public company it's actually 19%. Forget all this rubbish about 30% somehow they're 12% here and 15% there, we don't pay 30% in this country. There's some valid reasons for it and there's some very, very squalid explanations of it for many of our large corporates. Why would cutting the corporate rate from 30% to 25% work in an environment when they're paying an effective rate on average of 24%? It's just stupid, dumb, which is why it doesn't have the support and it is not seen by bodies such as the IMF and many international organisations as a rational choice at all. Will all those companies suddenly be inspired to create more jobs? One in three private companies in Australia now pay no tax, get that? No tax. One in four public companies pay no tax at all. How are they going to be inspired to invest more when they're not paying anything now at all? Which is yet another demonstration of how absurd this policy is and why really, the government is being controlled by a pack of zealots who are simply interested in providing a huge gift to a few of their mates at the top end of town.

Meanwhile, the average member of the public can see through this, they can see through it thanks to our tax transparency legislation. Everyday workers don't have access to Panamanian tax shelters or tax havens or corporate minimisation opportunities so how dare these workers challenge the Prime Minister on election night to say "no thanks, we don't think it's a great idea". How could anyone have faith in a leader who professes to believe in equality of opportunity but leads a government that's opposed strong measures to stamp out tax evasion.

Now, he can lecture all he likes about the moral challenges; he is a fully paid up member of the Cayman Islands club. He's got a capital growing there under the palm trees. How is he in a lecture to lecture Australians about their moral priorities? If he was a leader who had faith in his leadership, if he was a leader who had faith in his Treasurer, he would be investing his money first and foremost here. The truth is this, the use of tax havens by wealthy corporates and wealthy individuals is destroying progressive taxation as we know it. It is a very significant factor, not just in growing inequality in wealth and income globally, but a significant factor in the loss of trust across the world by individuals in their democracies and it is also a substantial factor leading to weaker and anemic growth and lower living standards across both the developed and the developing world. You don't go to a tax haven unless you're intending to either avoid tax, either in countries where you live or you're based, or to use it as an end point for tax minimisation. The fact is, the public know it: strong action against tax havens will never be taken by individuals who use them.

We had a lecture in question time today from the Prime Minister once again about culture, he decided he was going to lecture the Labor party about culture so I've got a question for him: what kind of Prime Minister puts his fortune in a tax haven? What sort of cultural implications does that have for our country and for moral leadership? So in this environment you can be absolutely certain the public are indeed very skeptical when the government says it is committed to Medicare, that they don't have an agenda to privatise it which we know they do and by the way which is still being implemented behind the scenes, I'm sure their backbenchers will be shocked to know.

We have in Australia, an opportunity to have a debate about what are the drivers of growth and equity? And of course this is why we have produced this report. This shows the way, we've reached the fork in the road in the economic debate. We can grow inclusively and if we're growing fairly we will grow more strongly, if we're growing unfairly we will have weaker growth. This is the way ahead, not the government’s trickle-down economics.