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Tuesday, 7 February 2017
Page: 113

Mr CRAIG KELLY (Hughes) (19:27): I would just like to make a few comments on the Treasury Laws Amendment (2016 Measures No. 1) Bill 2016 in response to some of the comments from the member for Fenner during this debate where he complained about the government's enterprise tax scheme being a $50 billion giveaway. Firstly, the member for Fenner may be interested in the example of what happened in New Zealand, given his belief that it is a $50 billion tax giveaway when you reduce the corporate tax rate. In the 2010 New Zealand budget, the then Prime Minister, John Key, made an announcement that he was lowering company tax rates from 30 per cent to 28 per cent—very similar to what we in Australia are currently proposing. As they were lowering the company tax rate from 30 per cent to 28 per cent, a natural question for someone who really did not have any understanding of economics or business or how the economy works would have been: 'Well, how much is that going to cost? We're reducing the tax rate. Surely that is a handout to all New Zealand companies at the expense of the New Zealand budget.' Well, what happened is a very salient tale and is something we should learn about. In New Zealand in 2010, their corporate tax receipts at the 30 per cent rate were $6.3 billion; in the next year, 2011, where they were split between the 30 per cent tax rate and the 28 per cent tax rate, they were $6.4 billion. So, in 2012, when they had a 28 per cent tax rate—when they had reduced it—how much did the tax receipts go down? Well, they did not go down. They actually increased. They went up by 24.9 per cent. So they got 25 per cent more tax—got more government revenue being paid—at 20 per cent than they did at 30 per cent. The following year, again at that lower tax rate, they again got a six per cent increase; in 2015 an 11 per cent increase; and in 2016 a five per cent increase. In those five years from 2011 to 2016—

Debate interrupted.