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Monday, 19 October 2015
Page: 11579

Ms MacTIERNAN (Perth) (15:43): I want to respond to a number of the comments that have been made today by the previous speaker and to a series of speeches that I have heard in this place not just in relation to this bill. Last week, the same issues came up in the discussions on social security legislation, legislation about our education system and fees for our education system. I think that when I listen to the contributions of the members opposite, I really do—

A government member interjecting

Ms MacTIERNAN: Sorry?

The DEPUTY SPEAKER ( Ms AE Burke ): The member for Perth has the call and will not respond to interjections.

Ms MacTIERNAN: I was trying to be good natured. I am interested in having a debate. As I have been listening over the last week to these contributions, what struck me was how profoundly unaware members were of alternative models and visions of where our economy is going and, indeed, the sorts of ways in which we might divide up the community pie.

The Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 that is before us today is legislation that we do support. It is a modest measure to reduce tax evasion by multinational companies. We have noted that the government has been unable to give us any sort of estimate beyond an asterisk as to what, indeed, this might collect. Today we had the Treasurer being optimistic, talking about hundreds of millions of dollars. It will be really great, fine and good if we get hundreds of millions, but we are dealing with a problem where, in fact, we need to raise billions more dollars in revenue. We need to do that for a very good reason, and a number of measures that have been put forward by this side of the House have been rejected out of hand by the government.

I just want to reflect on one matter, and that is the growing inequality not just across the Western world but, indeed, across our country. Inequality is happening globally, and I think we have talked about this in the past. There was a period coinciding with the end of that very radicalising experience of World War I and going right up until the 1980s where we saw the historic inequalities in the spread of income and wealth in society changing. Over that period, basically from 1920 to 1980, we saw an economic democratisation take place where the share of the overall return of an economy that went to wages versus that which went to profit changed. What we have been seeing since 1980—and, indeed, what I believe is now accelerating—is a reversal of that.

In fact, what we are seeing is societies, including our own, becoming more and more unequal in the way in which they reward effort. The reward you get out of profit is now increasing compared to the reward that you get out of labour and, in relation to the various types of labour, that reward is becoming more and more distorted. I will give you a couple of key facts. Over the past generation—in the last 30 years or so—Australia's top one per cent income share of wealth has doubled and the top 0.1 per cent income share has tripled. From 1975 to 2014, real wages have grown by a mere $7,000 for the bottom one-tenth and by $47,000 for the top one-tenth. If we look at actual wealth, I think that we will see that it is not just income, that this is actually compounded in terms of the spread of wealth.

This is a question of fairness, but it is also an economic question. Is this what is going to deliver us a strong and stable society into the future? I do urge members on the other side to look at the work of Nobel Prize-winning author Joseph Stiglitz. His work The Price of Inequality really shows that we do not only risk destabilising our democratic institutions by this growing sense of unfairness that we are seeing emerging around the world and that it is not just the radicals in the Occupy movement who are aware of this. People are becoming increasingly aware of this growing inequality and increasingly disillusioned that the political class appears to be unable and unwilling to do anything about this.

What we are seeking to do is try to balance the budget to get us out of the problems that fundamentally came from the global financial crisis, a crisis which emerged primarily because of the greed of large corporations. They created an absolute crisis. By and large, the people that were at the heart of that crisis have gone on to even greater benefit, and communities like ours and those across Europe and North America are now trying to deal with this catastrophe that has been created by those who pursued a philosophy of greed and the unbridled pursuit of wealth.

We are now being told that we have to cut really important things like investment in education. I have heard member after member get up on the other side and say, 'There's no such thing as a free education. Someone has to pay for it.' Someone does have to pay for it. But what we are saying is that the proposition that university education should be largely the responsibility of government or that technical and further education should largely be the responsible of government is not at all an unreasonable proposition.

We note that in some of these most successful economies—such as in the Scandinavian economies—they provide free tertiary and technical education. They do not find it absolutely preposterous that the bulk of that should fall upon the tax revenue, because they have a more sophisticated understanding of who is actually benefiting out of the system and how we create the social stability that we need for economies to prosper. I think this is an increasing problem that we have on the conservative side of politics—that they seem to profoundly misunderstand the nature of the social contract.

We have billionaires in this country who believe that somehow or other their innate value and their innate genius have been the things that have turned them into billionaires, rather than this being the result of a particular structure that we have in our society. The Gina Rineharts of this world in fact rely very much on there being a particular value placed on a mineral for them to be able to generate the sorts of vast profits that they do. But there is nothing logical or in any way self-evident about the fact that a CEO of a bank, for example, should get $15 million, while an ordinary working person in that bank might get $50,000. These things are not self-evident. There are structures that have emerged that have enabled people to generate vast wealth.

It is really important to understand the trend line here. The trend line is taking us to more and more inequality, and that inequality feeds further inequality, because the people with this ever-increasing wealth are able to buy political influence, either directly or indirectly, and to mould media opinion. Just look at Rupert Murdoch. The reason why Rupert Murdoch wanted to run all of those red tops was not that he was particularly interested in exposing the private lives of people but rather that this gave him the mechanism for controlling. The fear that he generated within the political class ensured that he had a very high level of control over the decisions of government, to ensure that his particular interests were advantaged.

We need to get on top of the fact that we have to do something more about this growing inequality. I have heard members talking about the top taxation rate. The top taxation rate is somewhat farcical if we do not know what people are in fact paying in tax. Many of the people who may notionally fall within income brackets that require them to pay substantial amounts of tax actually are not doing that because they have the availability of tax havens—be it the Cayman Islands or elsewhere—and top tax advice that enables them to avoid or to minimise their tax, to a point where the ratio of tax that they are paying bears very, very little relationship to what people think should be paid by those people. Hence the Buffett principle was that there be an absolute limit on the amount of deductions that one could call upon, so that there would be a guaranteed minimum level of taxation paid.

We are going to have to deal with these things. I agree with welfare reform. I think that there are a lot of unintended consequences that come out of creating a welfare system that can foster intergenerational dependence. But there is an incredibly strong argument here that we are cutting back our social safety nets while at the same time operating a protection racket that has seen the top 10 per cent, the top one per cent, the top 0.1 per cent, of our communities getting richer and richer.

I note that Stiglitz says here:

if we were serious about deficit reduction, we could easily raise trillions of dollars over the next ten years simply by (a) raising taxes on people in the top—because they get so much of the nation's economic pie, even small increases in tax rates raises substantial revenues …

He goes on and advocates a number of provisions like this. So I just urge the members opposite to think a bit more broadly, to think a bit more deeply, about these matters and to reflect on these profound changes in economic structures that are coming across the world. I have referred in the past to Thomas Piketty's book Capital in the Twenty-First Century. He points out that, across the globe, we are now pretty much back at the position that we were in in the 1890s, in the Belle Epoque, in terms of inequality. If we want to prosper as a society, if we want see this broad commitment to our democracy, if we want to see our economy thrive and have a deeply engaged, stable community, then we need to address these issues. We have got to get beyond the very cliched representations that we have been seeing from the government members over the last week. We support this legislation, but in no way does this go anywhere near far enough in addressing the massive issue of how we get a decent tax response from the wealthiest in our community.