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Tuesday, 11 October 2016
Page: 1417

Senator WHISH-WILSON (Tasmania) (12:59): Every time we get up to speak in this place it is a privilege because our words and our actions can actually make a difference. They can make a difference on the issues that matter to us and to all Australians. The Treasury Laws Amendment (Income Tax Relief) Bill 2016, from my personal perspective, is one of the most important pieces of legislation that is going to come to the Senate this year. It is important because it symbolises something that is deeply meaningful to all Australians and in fact to many in the community around the world. It is deeply important because we are now voting on this bill today to sign over $4 billion of Australians' money to the wealthiest Australians in a tax cut.

If you earn over $80,000 in this country, which is 20 per cent of Australians, you are about to be given a tax cut. So 80 per cent of Australian taxpayers will not get the benefit of a tax cut. It is important because inequality and tackling inequality are the true moral challenges of our time. I remind senators that our actions, our voices and our vote in the Senate is what matters. Today it shames me that the Labor Party have joined with the Liberal Party to give a tax cut to the most wealthy Australians—Australians like myself who earn over $80,000 and who do not need $6 a week or $315 a year in a tax cut. That money is needed by less wealthy Australians, many of whom are on the breadline and are struggling.

I cannot fathom that Labor has only put up one speaker on this bill today—one speaker who did not even speak out her time. That equates to an allocation of $200 million a minute. How cavalier of Labor to take this issue so casually. We have had no inquiry through the Economics Committee and we have had a rushed process to get a report and a recommendation to pass this bill because Mr Bill Shorten and Mr Chris Bowen decided to side with the Liberal government during the election campaign.

So here we are at the beginning of the 45th Parliament and we have had two pieces of important legislation. Three weeks ago this Senate passed $5 billion in savings because this Prime Minister said that he believed the moral challenge of our time was budget repair and paying down debt. So Labor teamed up with the Liberal Party to take money off single parents, off students, off Newstart recipients and, sadly, off clean energy action in this country to raise $5 billion because they believed the government and they joined with the government in this bid to pay down debt. What are they doing today? Out of the $5 billion that they ripped off ordinary Australians, they are now giving $4 billion back to wealthy Australians. Out of the $5 billion of savings that we delivered three weeks ago we are now giving back $4 billion to the wealthiest Australians.

In the 1890s US economists first offered up what was called the horse and sparrow theory. It went along the lines: if you give a horse more oats then there will be more to pass through for the sparrows to enjoy. Give the horse more oats and there will be more to pass through for the sparrows to enjoy. Does that sound familiar? With different waves of enthusiasm across generations since, policymakers have been fed the same foodstuffs as the sparrows. Tax cuts to the wealthiest will trickle down to the benefit of the masses. Apparently, we all win if the richest have even more money to play with. But the evidence tells a different story and it leaves trickle-down economics exposed as a naked claim used to shore up the position of those already enjoying wealth and social position. History shows that the wealthiest do not tend to direct their newfound tax cuts into more consumption. Instead, they either increase savings or plough it into tax advantage investment vehicles like superannuation or negatively-geared investment properties. There is an active and growing consensus around the world that the trickle-down theory should be expunged and never again exhumed. Yet that is exactly what we are doing here today. Not only are we standing up to fight inequality, we are actually adding to it by voting for this bill here today.

Let's look at the political winds that are blowing across this globe, including in this country. For those who saw the US presidential debate yesterday, all the commentary in the mainstream media and social media was about Donald Trump and the rise of the Trump phenomenon in the US. We have talked about the Brexit movement in the UK, and of course there has been a lot of speculation on the rise of my colleagues over here on the other side of the chamber, One Nation. Let me tell you what the thread is that ties all these things together: that thread is inequality. People are feeling like they have been left behind. They are feeling that they have been ignored by their political system and their politicians because the gains and spoils of our economic system across decades of globalisation have not been shared evenly. That is why we are seeing such radical political movements around the world and that is actually what we need to act on. Our entire political system is now under a challenge because of rising inequality and our inability in a place like this to tackle this.

Martin Parkinson recently came out publicly and said that he believed one thing this government needed to do was to look at redistributive policies that help share the spoils of globalisation, especially trade deals. A first-year economic student will tell you about this. It is called the compensatory principles. In theory, the winners should compensate the losers, but that has not happened. In no world that I know have the winners—the big multinational corporations—compensated those workers you, Mr Acting Deputy President Marshall, talked about in this place who have been left behind. That does not happen. It is our role in government to make sure that it does happen. Professor Thomas Piketty, one of the world's most famous economists, is in Sydney this week to talk about inequality, which he sees as a severe challenge for Australia, and the need for new policies to tackle inequality. It is the true moral challenge of our time, and this consensus that we need to do something about it is lapping upon our political shores. The last few months have seen Labor MPs join with the Greens, at least in their public speeches, attacking trickle-down theory with gusto. I have heard this issue talked about during Senate debates in this chamber. We have seen economics spokespeople shifting from being past advocates of tax cuts to staying silent on who benefits from cutting taxes. It even culminated in the opposition leader, Mr Bill Shorten, claiming on the eve of the election that the Turnbull government:

… want Australians to embark upon a radical, expensive experiment in trickle-down economics.

We know how this story ends.

Reagan tried it. Thatcher tried it.

A generation later we got Trump and we got Brexit.

Correct. I totally agree with Mr Shorten. So why is Labor giving a tax cut to the most wealthy Australians today? Anyone who earns over $80,000 gets a measly $6 in their pocket per week—$315. What economic benefit is that going to have in terms of increased consumption? It would be a lot more valuable for those on the breadline—$6 a week would matter. But we are not giving them money. We are giving it to the most wealthy people in this country.

It is not just Mr Shorten who has had strong words on the subject. Mr Chris Bowen has recently given a number of speeches on the need to tackle inequality and trickle-down economics. Words are cheap if they are not backed up with actions. Senators from my home state of Tasmania have spoken about this. Senator Polley told the Senate on 4 May:

I rise to speak about the Turnbull government's budget that puts high-income earners and big business before families, students, patients, pensioners and low-income earners. This morning in my home state of Tasmania, four out of five workers who make less than $80,000 woke up to find out that they were getting nothing from Turnbull's government's budget. Eighty-two per cent of the working population in Bass have been left off the map and will not get a tax cut.

That is exactly what Senator Polley is going to vote for today. On the same day, Senator Singh said:

'Let's protect the higher income earners'—that is the mantra of the Turnbull Liberal government—'and let's do it at the expense of families …

…   …   …

Those who earn more than $80,000 may look forward to this tax cut, but if you look at Tasmania 80 per cent of its workforce earns less than $80,000. That is how out of touch the Turnbull government is with the states that it is supposed to be thinking about and providing for, as it was last night in its budget. Four out of five Tasmanians earn less than $80,000. They are the people who are going to be affected.

I know that Senator Singh is not here, but, if she were, either she would abstain from the vote in the chamber, as she often does on controversial votes, or she would also vote for this. On 9 May, Senator Carol Brown tweeted, 'More than 230,000 Tasmanians will not benefit from the government's tax cuts. This shows Turnbull is out of touch.' I have here a whole list of other MPs who have gone out in a similar vein.

Senator Cameron interjecting

Senator WHISH-WILSON: Senator Cameron, let me finish with your leader, Mr Bill Shorten: 'This is a budget that favours millionaires over battlers, high-income earners over families.'

Senator Cameron interjecting

Senator WHISH-WILSON: Well, Senator Cameron, guess who is going to get a tax cut today out of nurses, clerks, store people, aged and disability carers and millionaires. Millionaires—you are correct. Millionaires are going to get the tax cut today. Congratulations, Labor, and congratulations, Liberal Party.

I want to deal with a couple of specific issues that have gone unnoticed about this bill in terms of increasing inequality, gender inequality. Under this bill, women are half as likely to receive the benefits of a tax cut than male workers. Twenty-eight per cent of male workers in this country will receive a tax cut, but only 13 per cent of women will receive a tax cut. The Australia Institute did some fantastic work on whose electorates benefit from this tax cut. I do not know whether it is just a coincidence, but the first electorate in the top 10 electorates to benefit from this was Wentworth, the Prime Minister's electorate, where 34 per cent of people earn above the threshold. Sadly, the electorate of Lyons in my state of Tasmania is in the bottom 10 electorates, with only six per cent of people in Lyons earning above $80,000.

We can put these two measures side by side—the omnibus bill that was before us in the parliamentary sitting three weeks ago and the bill before us today, which will give $4 billion in tax cuts to Australia's highest income earners. It is going to cost us $4 billion in lost revenue. This paints a very dire picture for those of us in this place who care about tackling income inequality. The income tax cuts will put $315 into the pockets of each of us as members of parliament, and into the pockets of banking executives—I would have loved to have been involved with the banking inquiry last week, but it was only members of the other place. I would have dearly liked to have asked each CEO how they plan to spend the extra $6 a week they are going to be given by this government.

If this measure is truly targeted at bracket creep, we should be recouping revenue from those earning above $180,000. According to a number of submissions to the Senate Economics Committee, those in the tax bracket below $80,000 are the ones that most suffer from bracket creep. That is not part of this bill. I have written to Mr Chris Bowen, the shadow Treasurer, asking him—if he is going to vote for this bill today—to at least consider maintaining the so-called deficit repair levy for high-income earners that was introduced in the 2014 budget. The Greens have always wanted to make that permanent so that high-income earners do not get their tax back from that measure.

These issues do not often get covered by the mainstream media if Labor or the government do not want them to be covered. But let us address the issue of this being a tax cut for middle-income earners or middle-income Australians. That is absolute claptrap. This is an income tax cut for the wealthiest Australians—the wealthiest 20 per cent of Australians.

The Australia Institute has looked at what constitutes middle-income earners. It is true that the average income in this country is around $80,000, but that is dragged up because it includes the multimillionaires and the CEOs who were at the banking inquiry last week, who are earning $8 to $10 million a year. That average income of $80,000 deals with full-time workers. If you include part-time and casual labour then that figure drops considerably.

The true measurement would be the median income earnings. According to the ABS, the median income in this country for 2014 was $69,000, while the average wage—average versus median—was nearly $80,000. Again, that is only for full-time workers. When we include all kinds of workers the average wage falls to $62,000 but the median income in this country falls to $52,000. So middle-income Australia, according to all the experts who use median income, is $52,000, which is way below the threshold of those who are going to get this tax cut above $80,000.

Whichever way you look at it this is a tax cut for high-income Australians. I think we in here can all agree that, on a personal level, we do not need the extra $6 a week. I do not think the economy is going to benefit from that either. But those who do need it are not going to get it. The savings that we booked three or four weeks ago—which we took off clean energy, which we took off tertiary education students and which we took of single parents—are nearly gone. Now we are there is another bill about to hit the Senate that will give businesses tax cuts. It will give big businesses tax cuts. This is ramping up trickle-down economics and it will make inequality worse.

We have an opportunity in our limited time—and in the scheme of things we all have limited time in this place—to make a difference, to make our vote count and make our words mean something, and that means voting against this bill today.

I do agree with some of the things Senator Gallagher said today. The big things we do need to tackle in this parliament, like concessions of negative gearing, capital gains tax and proper superannuation concessions, are things we should work at together with Labor and with the Liberals to get some real economic reform done in this country. That is what is going to raise revenue and tackle inequality. We can walk and chew gum at the same time.

Why is Labor going along with this neo-Liberal agenda of trickle-down economics? I do not understand. I genuinely do not understand it. Senator Cameron, because I always enjoy hearing you speak—that is the truth—I wish you were on the speakers list today so you could explain that to me—

Senator Cameron: I will see if I can get on.

Senator WHISH-WILSON: Please do. Through you, Acting Deputy President, I would very much enjoy your contribution. I move:

Omit all words after "That", substitute "this bill be withdrawn and redrafted so that bracket creep is addressed without further propagating income inequality in Australia on the flawed theory of trickle-down economics by providing a tax cut to the top 20 per cent of Australian taxpayers."

Now is not the time for tax cuts. Now is the time for the Labor opposition to match its media releases with its actions and stand against the expansion of income inequality and gender income inequality in Australia. Now is the time for our parliament to give momentum to the global discrediting of the horse and sparrow theory, which started nearly 100 years ago and continues to be propagated, which by any other name smells just as bad as the vision of that theory. I say to Labor: this is your last chance on this bill to make a difference. Please vote this down and work with the Greens and the crossbench on policies that tackle inequality.