Senator McGAURAN (6:08 PM) —I also join this debate on the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2005, which in reality comprises, as the debate is showing today, the tax cuts announced on budget night. We all know, Senator Minchin, better than anyone sitting in cabinet, that tax is often a pious debate at the best of times. We heard the Democrats outdoing the Labor Party in their bidding. It is often a bidding war, and we know, whatever tax cuts we put up, even the public would want more than is delivered. It is often a pious debate, but nothing could have been more pious than Senator Conroy’s speech here today. It absolutely takes the cake. He has outdone the two other speakers from the non-government side. Senator Conroy has delivered something more pious and more fake than the other two, who did a very good job. He hid behind some Telegraph poll, if we are meant to believe the figures of that. I will be checking the Telegraph later on. He mentioned a Telegraph poll. He called the government’s tax cuts a scam.

The second speaker, Senator Sherry, enters the chamber. The Labor Party only had three speakers. You are never short of getting speakers in the Senate. It is the place of debate. It has been the most filibustering, obstructionist Senate for the nine years of this government. We are never short of getting Labor Party speakers to come in here day and night. The backbench would queue up. In fact, it was very hard to get a government speaker on before one o’clock at night sometimes. But today what do we have? Three speakers joined the debate. I was shocked. In fact, The Nationals contributed two speakers to the Labor Party’s three. What a joke. I had to rush this speech through. I turned up this morning knowing I had a tax speech, probably about 10 o’clock tonight by normal experience—

Senator Sherry —Get on with it—talk about tax.

Senator McGAURAN —What I am trying to point out, Senator Sherry, as you say, ‘Get on with the debate’—I will—is that you have lost support from your own backbench. None of them will come forward and argue the indefensible. They know this is ridiculous and the sooner it is over the better; the less said the better. That is the new approach to this tax debate. Senator Sherry tried. The only thing Senator Conroy did was not come in here with his usual over the top style of debating, because even he has been quelled on this. It is absolutely absurd. Senator Conroy claims that we have misjudged the Labor Party and the tactic that they would take in blocking this tax cut. He is right. We utterly misjudged the Labor Party, that the Labor Party would be so stupid, so idiotic, so dangerous.

As Senator Boswell said, you have almost reached the stage where you have become unelectable. I remember that when we were in opposition there was a ridiculous stage we had reached—never so bad as this, of course; we knew never to deny the Australian people a tax cut of any sort—in 1993, which Senator Boswell will remember, where we would not take any amendment cuts on the Native Title Bill. That is when you know you have been in opposition too long. My point is that you reach a stage where you really do become unelectable. You become so obstructionist, so caught up in your own internal politics, so idiotic and political that you cannot see the wood for the trees. That is the stage that you have reached today in denying the tax cuts to the Australian people. Senator Conroy is absolutely correct: we utterly misjudged you. We never thought you would do this.

Senator Conroy finished his 20-minute contribution by raising the fact that the government promised during the election period to spend $66 billion on commitments and promises, which we are fully committed to and are fulfilling—in the last budget all those promises were met. He finished by saying that that was a threat to low interest rates and that the Reserve Bank has sent out that warning, as if to say we should not even be introducing any tax cuts. I know those cuts were a big surprise to the Labor Party on budget night. It caught them flat-footed. It caught the shadow minister, Mr Swan, flat-footed and caught Mr Smith and obviously Mr Beazley totally flat-footed. So they went into what they instinctively know, and that is to object, to go into their negative mode. They were caught flat-footed, so much so that they decided to reject these tax cuts.

So Senator Conroy—just to finish that point on Senator Conroy and move on from his idiotic speech—was suggesting that tax cuts actually feed into higher interest rates, and the Reserve Bank have sent out that warning. So what he is really saying is that their offer is not really an offer at all. If the Labor Party ever got into government, no-one would believe that they would deliver. Even so, the suggestion that the tax cuts would feed into higher interest rates is ridiculous.

The truth of the matter is that these tax cuts announced on budget night were unexpected but indeed most welcome. Unlike the Labor Party, who were caught flat-footed on the night, we actually had a structure, a philosophy and a policy behind it all. As the Treasurer said in his speech, setting out the philosophy behind these tax cuts:

So it is quite obvious that the philosophy behind these tax cuts is like a dividend to the Australian people. Good economic management right from our first budget, our first tough budget in 1996, allows us to pay these dividends. In fact, I would go so far as to say that the Treasurer’s 10th budget was his best. He increased spending in all portfolios. He reduced debt, which will be zero by 2007. What government can increase spending, reduce debt, cut taxes and maintain the reform momentum all at the same time? This was the Treasurer’s finest budget ever, his finest hour, and we are proud to say that he was able to include these tax cuts.

On each occasion the government got to the point where we were able to offer these tax cuts as they came along because we took the first tough steps in 1996 and have in every budget since. But the Labor Party, from 1996, have objected to every reform this government have tried to introduce. To date you have rejected our industrial relations reform, but has anyone heard of any strikes down at the waterfront lately? Has anyone noticed the country going out in sympathy with regard to secondary boycotts or anything like that? No. That reform has brought peace and harmony to the economy, but the Labor Party were against our initial industrial relations reform.

In the area of welfare we have introduced mutual obligation and we have targeted welfare fraud. The Labor Party were against that, yet that was all part of producing a surplus budget and being responsible economically. It is the same with regard to the Medicare safety net, and so it goes on in the area of education. You are even against reforms to support rural and regional areas such as Regional Partnerships. I am sure—you can remind me, Senator Boswell—that just about everything in the rural and regional area that we put up has been obstructed by the Labor Party in this house, either by filibustering or by voting it down.

You have paid a high price for that, just as you will pay a high price for your rejection and obstruction of these personal income tax cuts. The price you paid at the last election was the highest yet. Political pundits probably though that they would never see the day in modern politics when a government would again hold the majority in the Senate. How wrong they were. When the opposition get so weak and put up such a dangerous leader, do you really think you are going to put that over the Australian people? That is where we will be after 1 July. That is the answer the Australian people gave you at the last election: they told you to get your economic management in order. You are not listening. You have not listened. If this is your response then we are likely to increase our majority in the Senate after the next election. That is the price you paid at the last election; you are heading down the same track again. But far be it from me to give you gratuitous advice. I am quite enjoying the level of absurdity that the opposition have reached. Senator Buckland sits over there as Opposition Whip—

Senator Boswell —The wise old owl.

Senator McGAURAN —a wise old owl who is probably glad he is getting out on 1 July so he can go home to his farm and make a bit of money on his cattle and contemplate the good sense that the cattle have—more than there is in the caucus room. The Labor Party have learnt nothing at all in nine years. You have paid a high price. If the Labor Party cannot get sense out of the shadow Treasurer, Mr Swan, why don’t you listen to those that have had experience in government and know the degree of difficulty in running an economy and, when the rewards are there, how you should take them? Why don’t you listen to Paul Lennon, the Premier of Tasmania? Let me quote what he said about the tax cuts.

Senator Boswell —A good man.

Senator McGAURAN —Yes, Senator Boswell, he certainly was when it came to forestry issues. I just noticed Senator Brown over there; I must thank him for his strong stance in the area of forestry at the last election. It certainly sucked in Mr Latham and the Labor Party. I must thank him for the lack of reality that he has contributed to the Labor Party. Senator Brown ignores me, but he knows only too well that it was his advice to the last leader of the Labor Party—we await his book coming out in October; that should be another fine read!—and his lack of reality and the Greens’ lack of reality that led to the absurdity that we had in Tasmania with regard to forestry policy. Paul Lennon, the Premier of Tasmania then and now, rejected the Labor Party policy on old-growth forests, as he rejects your policy on tax cuts. He is standing up to you, in other words. This is what he had to say:

He also said:

As you know, the Western Australian Premier has also given you similar advice, as has none other than Bill Shorten, the up and comer—

Senator Boswell —The hope of the side!

Senator McGAURAN —the hope of the side, the man being groomed to take over the Labor Party reins—the new or the next Bob Hawke, which is how Senator Ray and Senator Conroy are attempting to groom him. At least, that is what I think they are doing; unless he too is going to ride right over the top of them. But he had some wise words to say. He put it quite simply, saying that his own union and all tradesmen will benefit from these tax cuts. It is an absolute fallacy what the Labor Party is selling, that these tax cuts are not directed to the working man and woman of Australia. They are directed to the heart of the working man and woman. If you listen to Bill Shorten, he said in the Australian on 3 May:

…         …         …

That is what the tax announcement has done. That is Bill Shorten talking to you from within your own party, a man who is from the union and has all the credentials to be able to influence you, but what do you choose? You choose to listen to Mr Swan. I have a strong suspicion it may well be the last time that the Labor Party listen to Mr Swan—I would say that would be the last time. It is just a matter of time before Mr Swan is graciously, I suspect, moved on.

The truth of the matter is that this government has a record of tax reform. We have undertaken major tax reform. There have been income tax cuts in 2000, 2003, 2004 and 2005. We have cut company tax, we have halved capital gains tax and we had the courage to fundamentally restructure the tax system and go to the people in the 1998 election with the GST, which included income tax cuts. We had the courage like no other government to face the Australian people with regard to the GST, which cut wholesale sales tax and taxes from exporters and so on. The Australian people had confidence in us, and we brought that system in in 2000. So we are a continuing reform government—unlike the Labor Party, who, when they were in government, simply increased taxes. They increased company tax—first you decreased it and then you could not take that, so you increased it. In just about every budget you increased wholesale sales taxes. You jacked up the excise tax on petrol in just about every single budget until you got sick of the political reaction to that and then you simply indexed it.

But personal income tax reform goes down in political folklore and political legend with regard to the l-a-w law tax cuts. You promised, before an election, major personal income tax cuts. You legislated for it—it was law to deliver those tax cuts. Then you had the nerve on the other side of the 1993 election to come in here and overturn the law on personal income tax cuts—a promise on which people had voted for you. Of course, you introduced the fringe benefits tax and the capital gains tax and so it goes on. So your whole culture is shown up here today—your tax culture. It is a simple cliche but it sums you up: a big-spending, big-taxing party—that is what you were in government and that is what you will be. This is just a facade, just a front you are putting up to posture, knowing you will never have to deliver.

As the last speaker I can see that my colleagues want to get to the vote on this. Let us test the mettle. Let us see if those backbenchers who have been hiding all day from this whole debate front up and vote. You watch them: when this debate is over and the bill is through the Senate, they will all be back on the speakers list, pontificating. But when it comes to important issues like dollars in the pockets of the Australian people, where are they? They skedaddle. Their first loyalty is to the Labor Party, the Labor caucus. It is not to their electorate, not to the Australian people and not to building an incentive into the economy; it is to their own personal caucus. You have paid a high price in the past and you will continue to pay a high price for the decision you are going to make today.