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Monday, 29 February 2016
Page: 1326

Senator DI NATALE (VictoriaLeader of the Australian Greens) (16:31): I think the government's problems on this tax reform debate, indeed the government's problems under its former Prime Minister Tony Abbott, can be sheeted home to the simple proposition that really is its underlying philosophy. That proposition is this: this government, consistent with their philosophy, want to reduce taxes—income taxes, corporate taxes—and the cost of doing that is that we then do not have the revenue to fund essential services, things like health care, education, or to fund vital public infrastructure. The simple proposition that this government is putting forward to the Australian community is: 'We want to lower taxes. It is a pretty simple equation. The cost of doing that is that we won't be able to afford the current healthcare system and education system you enjoy.'

The government need to use all sorts of language around budget emergencies, how the country is going to rack and ruin and how we are on the same path that Greece is on and so on because, in order to justify that proposition on taxes, they need to ensure that the Australian community is adequately scared into supporting this vision. It is what they tried to do with the 2014 budget. They softened people up. We had a budget emergency. Things were worse than Greece. We needed to take drastic action. So the 2014 budget was handed down, and it reflected those priorities. There have been all sorts of commentaries and analyses about why that budget failed so dismally—that it was poorly sold, it was misunderstood and so on—but they totally miss the point. That budget was very clearly understood by the Australian community. They understood what this government was trying to do—that is, to erode our tax base, and the consequence of that was Medicare co-payments, money ripped out of schools, money ripped out of hospitals, slashing income support for young people who cannot find a job. And do you know what? The Australian community rejected it. They rejected it outright. They said to this government, 'We don't support where you are trying to take us.'

And that is the problem with where this tax reform debate has got to. We have a government that have tied themselves up in knots. We know what they would like to do, but they are simply unable to do it because the Australian community have said very loudly, very clearly: 'We don't like it.' The government do not have the courage to run an argument that says, 'We think that we should lower taxes and we think that the cost of that should be that we do not fund the services that we currently fund in the same way.' That is why we have this nonsense about healthcare spending being unsustainable. Healthcare spending is only unsustainable if you choose it to be. If you pay for it, it is sustainable. If you invest in education, it is sustainable. How is it that you can have a two per cent target for Defence spending, and yet our current spending on health care is unsustainable? It is a nonsense argument.

The problem that this government have is that there is a profound lack of honesty in what they are trying to prosecute when it comes to their debate around tax reform. They need to have a bit of courage. They need to recognise and come clean with the Australian people. Our view around tax reform is very, very simple: yes, we do believe in raising revenue to pay for things like health care and education. One way to do it is to end those unfair tax breaks that exist within the tax scheme. We do think it is important to fund infrastructure—we want to build up Medicare, we want to invest more in public schools—and if the cost of that is ending these are unfair tax breaks, then let us do it.

One of the other objectives of tax reform is to do something around that huge and growing gap between the rich and the poor in this country. That is a real issue. We have growing income inequality in Australia, and it is corrosive in all sorts of ways—not the least of which is that it is a huge drag on the national economy. And by ending those unfair tax breaks within the property market and within the supermarket and so on, we can do something about that growing level of income inequality. Tax reform should be about taxing externalities. That is why we support a price on carbon. In fact, things like an increase in the tobacco excise is also part of that. And of course getting money moving in the right places, boosting productivity. There is nothing productive about parking money in the property market, within super and so on in an effort to minimise the amount of tax that you pay. That is why the Australian Greens have been leading the debate on negative gearing. More than a year ago we put out policies on that front, on superannuation and of course ending huge subsidies for the fossil fuel industry. A bit of courage and vision, that is what you guys need.