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Tuesday, 16 October 2018
Page: 10067

Mr BOWEN (McMahon) (12:43): The Labor Party will support this Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018 and will facilitate its passage through the House. As we indicated on Friday, the Leader of the Opposition and I, and the Labor Party, do support lower tax rates for small and medium enterprises. The government changed position and said that these tax cuts should be brought forward, and we were happy to facilitate that change of position. You wouldn't know it from the Treasurer's tweet following the announcement of the Labor Party's position. It was hardly the most constructive or welcoming or considered tweet. He said: 'You can't trust Labor when it comes to small business.'

I'd hate to see what he would have done if we'd opposed his legislation, if we'd come out and said, 'Small and medium enterprises will have the same tax rate regardless of whether you vote Labor or Liberal, but under a Shorten Labor government businesses will have access to the Australian Investment Guarantee as well, which is accelerated depreciation.'

Mr Frydenberg interjecting

Mr BOWEN: We're trying to help you here, Treasurer. I'd hate to see what you'd do if we were being unhelpful.

Dr Chalmers: He's only got one speed!

Mr BOWEN: He's only got one speed, the old Treasurer, and it's not a very edifying one. Under a Labor government businesses will have access to the Australian Investment Guarantee, which will mean that they can write off 20 per cent of their investments in their first year, over and above existing depreciation, which is tax relief on the condition of investment. We say to Australian businesses: 'We'll work with you. We'll provide you with tax relief. We want to make that tax relief conditional on investment, when it comes to the Australian Investment Guarantee.'

The other difference between the Labor Party and the Liberal Party is that this is very much plan C for the Liberal Party, because their plan A was to give big businesses a tax cut. They're doing the small and medium-sized enterprise tax cuts only because they failed to get their big business tax cut through. Why did they fail to get them through? Because of opposition from this side of the House and, most particularly, this side of the Senate. The then Treasurer, now Prime Minister, said that this was his great economic plan. He brought down the budget and said: 'It's not like all those other budgets that treasurers like Peter Costello, Wayne Swan and Paul Keating used to bring down. This one is different. This one is a plan, unlike all those other budgets.' I'm not sure of the logic that went into that statement. But that was his big plan, his plan A, his only plan. His one-point economic plan was big business tax cuts—$17 billion to the banks, with 60 per cent of it going offshore. Having failed to get that through, they have now moved to this plan. We all know that if they ever get the opportunity to implement plan A—to return to their original intention and come back to plan A—they will do so. But, at this stage, the Labor Party and other parties have succeeded in blocking that plan.

The other key point of difference is that the government has thrown out any semblance of or attempt at fiscal credibility and any attempt at showing that they are compliant with their own budget rules. The member for Rankin and I have put in place budget rules for the Labor Party, as is our job, and we will comply with them. We don't hold the government to those budget rules. They are rules that apply to us. We just ask the government to comply with their own budget rules. That's all we ask: for the government to actually comply with what they have said is their approach to the budget. This has been a rolling farce and they can't even get their alibi straight. I grant the new Treasurer some leeway, a bit of slack, because he is new to the job. I accept that he is the third Treasurer I have faced and it will take him a bit of time to get into the swing of things. I won't hold him to account for everything he says in his first couple of days, but he came out and said, 'We don't need to offset new spending and tax reductions, because the economy is growing and we are going to pay for it out of growth.' Maybe he wasn't aware of the budget rules, which are printed in the budget papers, saying:

new spending measures will be more than offset by reductions in spending elsewhere within the budget;

the overall impact of shifts in receipts and payments due to changes in the economy will be banked as an improvement to the budget bottom line, if this impact is positive;

Then we had the finance minister come out and say that the budget rules still applied. He said, 'I don't know where all this speculation comes from.' Well, it comes from the Treasurer, who has basically thrown the rule out. Then—my personal favourite—the Prime Minister went on Insiders and said that we have rules but 'there are exceptions to the rules and the government reserves the right to exercise that discretion, but they are the rules'—that is: we have rules but we will choose when we break them! We've seen those rules broken with these tax cuts. I accept that there can be a debate about whether rule 1 applies, because it is a tax cut and not spending, but there is no debate about rule 2, that overall impacts in the shifts in receipts and payments in the economy will be banked as an improvement to the budget bottom line. Well, it is not improving the budget bottom line. It is going to these tax cuts. So the Liberal Party is exposed on the point of fiscal credibility.

Mr Wallace interjecting

Mr Tim Wilson interjecting

Mr BOWEN: Statler and Waldorf have woken up at the back there. TheMuppet Show act 2 is here. There they are, Statler and Waldorf, joking away. They have come alive. Welcome to The Muppet Show. It is good to see you, Statler and Waldorf. The fact of the matter is that the Labor Party's budget rules show that we will have bigger budget surpluses over the forward estimates and over the medium term as well. We can do that because of the tough decisions we have taken, including the decision we took to delay the Australian Investment Guarantee by a year—

Mr Wallace interjecting

Mr Tim Wilson interjecting

The DEPUTY SPEAKER ( Mr Rob Mitchell ): Keep going and you will have an hour to find out!

Mr BOWEN: Show no mercy, Mr Deputy Speaker! The Labor Party's fiscal rules make it very clear that we will be providing bigger budget surpluses over the forward estimates, as will be crystal clear when the member for Rankin and I outline the fiscal bottom line during the next election campaign. But it will reflect bigger budget surpluses because of the decisions we have made.

We actually think there is a problem. Without being overly alarmist about the situation, Australia is exposed. We have the second-highest household debt in the developed world. These are uncertain international economic times. The international environment is very benign at the moment, but that won't continue forever. We need to be building the policy buffers so that governments can respond to these uncertain times, and that means bigger budget surpluses than the ones we are projected to have under this government's budget.

We believe you can do that. You can provide small businesses and medium-sized enterprises with tax relief. You can make important investments in health and education, which is important for this side of the House, in particular—particularly our recent investments in schools and in preschool. You can make important social investments in things like the superannuation wellbeing of Australia's women. You can afford to do those things if you're prepared to make tough decisions, as we on this side of the House have done. But you can't do that if you're not prepared to make those tough decisions, as this government has simply failed to do.

This is the latest change in position from the government on tax. We're used to it now. We've got the now Prime Minister, who was Treasurer, who's had state income taxes, an increase in the GST, big swingeing personal income tax cuts and then smaller income tax cuts. Of course, this now Prime Minister, the then Treasurer, has not accepted and kept to one persistent and consistent economic position on tax for his entire term as either Treasurer or Prime Minister—not one, for his entire term. This is just the latest thought bubble. And we've seen plenty more thought bubbles today from this Prime Minister, who's in desperation mode about a certain coming event on Saturday—but that's a different matter for another time. It just goes to show that there is nothing consistent about this Prime Minister's approach.

We are prepared to facilitate this debate. We have said that we will facilitate the debate through this House and through the other house, because small and medium enterprises deserve the certainty to know that these tax cuts are locked in. But they deserve to know more than that. They deserve to know that an alternative government will provide them, as well as big businesses, with more tax relief through the Australian Investment Guarantee, if they agree to invest in Australia. They deserve to know there is an alternative government that is prepared to pay for it and have bigger budget surpluses.

But part of the problem is: the Prime Minister simply doesn't understand the basics of the budget. He says that tax cuts don't make the budget worse. Well, they do. They actually do increase the budget deficit or reduce the budget surplus; it's a statement of fact. We recognise that. We recognise that tax relief can be appropriate, but it has got to be part of an overall budget strategy. We actually do that by delivering on the tough decisions. The Prime Minister makes a virtue of not doing that. He makes a virtue of ignoring the fiscal reality. He is throwing money at all the political problems of the government.

Today we've seen a humiliating backdown by the Treasurer on the GST distribution. The week before last, I called for a guarantee to be written into the GST distribution legislation. The Prime Minister and the Treasurer got themselves in a lather, started hyperventilating and said it was 'unnecessary' and 'unworkable'. They said it meant we were selling out the people of Western Australia. I was told I was selling out the people of Western Australia—terrible! Terrible, it was! It was a 'calamity', the Prime Minister and the Treasurer said! We stuck to our guns. And, a couple of days later, the state and territory treasurers unanimously agreed with us. Dominic Perrottet, the Treasurer of New South Wales; Tim Pallas, the Treasurer of Victoria—all of them, Labor and Liberal, from Tasmania to Western Australia, agreed with federal Labor's position. And what has happened today? The Treasurer of Australia has agreed with that position. It's another humiliating backdown by the member for Kooyong, the Treasurer—a humiliating backdown when it comes to GST distribution. And it's a humiliating backdown by the Prime Minister. It underlines my point: there is nothing these guys will consistently stand up for and believe in. They will do what it takes from day to day.

But we, as a constructive alternative government, will facilitate the passage of this legislation and ensure that every Australian business has the same rate of tax, regardless of who wins the next election. Australian businesses will have access to the Australian Investment Guarantee under a Shorten Labor government as well.