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Monday, 20 August 2018
Page: 5181

Senator MARTIN (Tasmania) (12:43): It has been reported for generations that Australia's economic prosperity has ridden on the sheep's back and mining booms. I would also like to add that it has been Australia's entrepreneurial spirit to harness not only our rich natural resources but also the blood, sweat and tears of Aussies that have built the likes of BHP, Qantas and Rio Tinto that have grown into globally recognised companies with revenues in the tens of millions.

As the Hon. Mathias Cormann has regularly commented, there are about 4,500 Australian businesses that have a turnover of more than $50 million a year, and they employ about four million people. These impressive figures, like past agricultural and mining successes, have brought with them economic prosperity for all Australians, not just the entrepreneurs, and that is the envy of millions around the world. I would like to thank hardworking Australians and Aussie businesses for making this country a great one, where people with dreams can aspire to have even greater dreams.

We have heard so many times over the past week or so how Australia needs to change for our big businesses to remain globally competitive. It doesn't take a pass in economics 101 to realise that Australia needs to reform its business tax legislation to keep its comparative advantages, to continue on the path of economic growth and to build the BHPs, the Rio Tintos and the Qantases of the future. That is why the United States, Britain, Canada, Singapore, New Zealand, Israel, France and Japan have reduced their company tax rates in order to remain globally competitive. If we don't change, we'll be left behind.

Even some of the Australian Labor Party's top leaders have recognised the need for that change. In 2011 the current leader, Bill Shorten, recognised the need for change when he said:

… more capital means higher productivity and economic growth and leads to more jobs and higher wages.

Former Prime Minister Julia Gillard even went as far as to say, in 2012, that if you're against cutting company tax then you're against economic growth. And even the doyen of the Australian Labor Party, former Treasurer Paul Keating, said, as far back as 1993, that the simplest and most-effective way to encourage Australian companies to work for Australia is to lower their tax burden. The Hon. Penny Wong said, in 2012:

We understand that the cut in the corporate tax rate is important to increase productivity, to promote broadbased economic growth and to encourage more investment and jobs across Australia.

Their economic sensibilities were right then, and they are right now. Labor will be right to put party politics behind them and support a policy that they have been on the record as supporting. The policy needs to come before politics. The bottom line is that if Australia's rate stays at 30 per cent then the country will have one of the highest tax rates in the OECD. That does not make economic sense no matter what your politics. That is reflected in the International Monetary Fund's World economic outlook, which states that Australia's gross domestic product will be cut by one per cent if Australia doesn't do something in light of the United States cutting its own tax rate. Treasury modelling released at the 2016-17 budget estimated that our tax cut would increase the size of the economy by about one per cent.

So, it does make simple economic sense for the bill—the policy—to be passed. We need growth, not stagnation. More money in the economy can only mean more opportunities for all. In my first speech I also recognised the need for change when I stated:

In Tasmania, words like 'growth', 'investment', 'productivity' and 'competition' have tended to be used to describe a seemingly far-off dream.

I also recognised Tasmania's and Australia's need to keep its close relationship with China and other export markets to keep growth, investment, productivity and competition a reality. The principles of growth, investment, productivity and competition that I spoke about in relation to Tasmania in my first speech are also the backbone of the Enterprise Tax Plan bill. In reality, there are 14 businesses in Tasmania with a turnover greater than $50 million that this bill will affect. That doesn't sound like a huge figure, but remember: Tasmania has a population of about 520,000 people. So, we are well and truly punching above our weight, and our businesses, big and small, are doing more than their fair bit. But like the hundreds of small to medium businesses that have benefited from the lowering of tax rate to 25 per cent to inject more revenue into the economy, these businesses should be able to enjoy the fruits of a lower tax rate to stimulate competition, employ more people and shine on the global stage.

Just like mainland Australia, Tasmania has also enjoyed the fruits of primary industries. It has also ridden on the sheep's back and experienced mining booms. Just as importantly, Tasmanians have made Tasmania a place also envied by international and mainland visitors. Our merino fleeces have fetched record prices in Europe. Tasmanian minerals, forestry products, and food and wines are attractive to more and more international markets. The world is now coming to us as more and more tourists enjoy the clean and green delights of the island home, and they enjoy the avant-garde attractions like the Museum of Old and New Art in Hobart.

We owe it to our exporters, such as salmon producer Tassal Group, shipbuilder Incat and Copper Mines of Tasmania, to keep taxes lower. While the passing of the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 is touted as benefiting companies that earn more than $50 million annually, it is not just about the big end of town. The flow-on effects to regional areas will be immense. It will give big companies the confidence to undertake mineral exploration, invest in new plant and equipment, and employ more Australians. This bill, when it comes down to it, is about growth and jobs. For Australia to continue to go beyond 26 years of continued growth, we must stay internationally competitive. Our business tax rate cannot stay at 30 per cent if Australia is to continue on a path of growth and greater prosperity for all, as the countries we compete against have lower taxes. Our tax rate needs to be at 25 per cent to stimulate the economy for all Australians.

In recent history, Tasmanians have witnessed firsthand the effects of businesses not staying globally competitive. Coats Paton, once the largest woollen mill of its kind in the Southern Hemisphere, closed its Launceston doors for the last time in the mid-1990s, with hundreds of jobs gone. Mines have come and gone on the west coast with fluctuating resource prices, and the Australian Weaving Mills factory in Devonport closed in 2013, with the loss of around 150 jobs. But they are not just jobs; they are people, they are families—our jobs, our people, our families. And there are businesses indirectly in the firing line of the pain caused by jobs going offshore. Interestingly, though, Tasmania is enjoying an economic boom, with developer Errol Stewart recently telling me conditions are the best he has seen in 25 years or so. We owe it to Tasmania to keep riding that economic wave of success.

A lot has been said lately about the aspirational goals of Australians, and it appears to me to be illogical to have a lower tax rate for small and medium businesses and not for big businesses. Where is the incentive for a small or medium-sized business to become the next Qantas, Tassal, Rio Tinto or BHP? Passing this bill will give companies confidence to invest and grow as technology advances beyond our wildest dreams. Free trade opens up more markets, and globalisation brings better and fresher opportunities for our children. I want our children, whether they live in a Tasmanian regional centre such as Sheffield or the superaffluent suburb of Sandy Bay in Hobart, to have the same opportunities to experience a world focused on not just agriculture and mining but also the technological changes, global visions and entrepreneurial spirit that can create an even richer, more clever society.

I don't want the Senate to miss the opportunity to pass this bill. Our economy, our workers, our people, our businesses and, most importantly, our children and our future deserve it.