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Thursday, 21 June 2018
Page: 3558


Senator WONG (South AustraliaLeader of the Opposition in the Senate) (10:54): I seek leave to speak for approximately 15 minutes.

Senator Cormann: The government will give leave to the leader of the opposition for five minutes on condition that no further steps are taken by the opposition to prevent a final determination of this very important matter by 11.40.

Senator WONG: I ask that Senator Patrick explain why that condition has just been imposed when yesterday I was told by him and by Senator Cormann that leave would be granted to party leaders to enable them to speak. I've just been told I can only speak—

The CHAIR: Senator Wong, resume your seat. Senator Macdonald.

Senator Ian Macdonald: Chair, is this a point of order or is it just Senator Wong thinking she has the right to get up and have a chat whenever she wants to?

The CHAIR: Senator Wong has sought leave. So the question is: is leave granted?

Senator WONG: I seek leave to speak for 15 minutes, and without condition. It is unreasonable to require that a party that opposes tax cuts for high-income earners be allowed to speak only if we agree to support them, to support the bill. That is utterly unreasonable. I seek leave to speak for 15 minutes, and if leave is not granted I will move that so much of the standing orders be suspended as would prevent me from speaking for 15 minutes in accordance with the deal that Centre Alliance did with the government.

The CHAIR: Thank you, Senator Wong. The government has put its position on—

Senator Cormann: On the point of order: we are not forcing the Labor Party to support the bill. That is wrong. What we are seeking to achieve is for a majority of the Senate to be able to express its will and not to be frustrated any longer by a Labor Party and others who want to prevent the will of the Senate from being given expression. The government has granted leave to the Leader of the Opposition in the Senate for five minutes on condition that this can come to a final vote by 11.40, and we will grant leave to any other party leader or Independent on the same terms.

Senator WONG: Well, I refuse to accept the condition. No leave is granted. The government is refusing leave to the Leader of the Opposition in the Senate to speak on this bill because I refuse to agree to the condition that I pass the legislation. It is unbelievable.

Senator Cormann interjecting

Senator WONG: Are you going to sit me down?

The CHAIR: Senator Wong, you need to resume your seat. The government has offered leave and you are not accepting it on that offer.

Senator WONG: I will speak, but I am not agreeing to a condition—

Senator Cormann: So five minutes—

Senator WONG: Well, I will take the five minutes because I understand that the ruling is that I can't move to suspend to take 15 minutes.

The CHAIR: Just a moment, Senator Wong—

Senator WONG: Can you please check—

The CHAIR: I now understand that the government is granting leave for Senator Wong to speak for five minutes. That's the proposition?

Senator Cormann: Yes, on the condition that there are no further steps—

Senator Ian Macdonald interjecting

The CHAIR: Order! Senator Macdonald, I'm answering a point of order. Senator Wong, the Senate has already determined how this matter will be progressed, so there's no opportunity to suspend standing orders.

Senator WONG: Well, the first point is that we were misled by Senator Patrick yesterday, because we were told that leave would be given to party leaders to speak. I've now been given five minutes—after a fight—on a bill for $144 billion. Can I just say this: today we are seeing the Liberal Party, the National Party, the Centre Alliance and others voting for an income tax cut that will benefit those earning over $200,000 a year. Do you know what? Senator Patrick, you're voting to give yourself a $7,000 tax cut; Senator Hinch, a $7,000 tax cut; Senator Anning, a $7,000 tax cut; Senator Burston, a $7,000 tax cut; Senator Bernardi, a $7,000 tax cut; and Senator Leyonhjelm, a $7,000 tax cut. And Senators Hanson and Georgiou, you're voting to give yourselves a $7,000 tax cut.

Government senators interjecting

The CHAIR: Order! Senator Wong has the right to be heard in silence. I ask members of the chamber to be respectful. Senator O'Sullivan.

Senator O'Sullivan: Madam Chair, there has been an identifiable deterioration in the language being directed at the crossbench yesterday and today with respect to this debate.

The CHAIR: Senator O'Sullivan, that's not a point of order. Please resume your seat.

Senator O'Sullivan: I will rise to my feet every time it's done and make a point of order. I was trying to make a point that you might be able to advise the chamber in relation to their language.

The CHAIR: Senator O'Sullivan, I have asked you to resume your seat. I have ruled there is no point of order. Thank you. Resume your seat.

Senator WONG: So all of those senators over there have voted to give themselves a $7,000 tax cut. What we wanted to do—and we had the support of the majority of the Senate yesterday morning—was to proceed with the tax cuts for low- and middle-income earners but to not proceed with the tax cuts for higher income earners which are to come into place in 2024. All of the debate that we have seen and all of the procedural straitjackets that Senator Cormann has been engaging in have been because he doesn't want to debate what is unsustainable, and that is an argument that low- and middle-income earners' tax cuts should be held hostage to tax cuts for high-income earners in 2024.

Let's be clear on what Senator Hanson and others have done today. What she ought to know is that the tax cuts that she is now voting for by agreeing with this motion, agreeing with what's before the chamber, will ensure that the people of Wentworth do very well and the people of Longman do very badly. What you need to know is that in Longman the number of people who are earning over $200,000 is 703. Guess how many in Wentworth: over 10,000. Well done, Senator Hanson: you've delivered to Point Piper! Well done, Senator Hanson: you've delivered to Malcolm Turnbull's electorate! But bad luck for the burghers of Longman, because you have ensured that tax cuts which overwhelmingly benefit high-income earners, people earning over $200,000 a year—

Senator Ian Macdonald: And Penny Wong.

Senator WONG: I'll take the interjection. He says, 'And Penny Wong'. I'm voting against it, mate. Why don't you? That's a great interjection! What an outstanding interjection from Senator Macdonald!

I make this point: what we have seen over these last 24 hours is a government desperate on a political strategy, a government desperate to try and hold low- and middle-income earners' tax cuts, which they deserve, hostage to high-income tax cuts. Senator Patrick, more fool you that you've copped it. You have come in here on the morning and said, 'Yes, I want stage 3 out,' and then voted for every single stage of a procedural straitjacket to ensure that amendment could not be insisted on and, furthermore, could not even be debated. What sort of senator does that? At least have the courage of your convictions. Stand up and debate it. What you've done is ensure they don't even have to debate an amendment that you supported 24 hours ago. What sort of senator does that, Senator Patrick?

What is extraordinary about this is that all that we would have needed to ensure that the tax cut for low-income earners proceeded and the tax cuts in stage 3 that overwhelmingly benefited those above $200,000 were removed would have been the same tied vote that we had yesterday. If Senator Patrick and Senator Griff had simply had the courage of their convictions, if Senator Hanson had decided to deliver to Longman rather than Wentworth, that's all we would have needed to ensure that Mr Turnbull's political strategy of holding tax cuts for low- and middle-income Australians hostage to high-income earners could not have been delivered. But instead, in this Senate, the Centre Alliance and Senator Hanson have fallen over themselves to deliver to high-income Australia and to Malcolm Turnbull's political strategy. That is all they have done. I urge the Senate not to support the motion from Senator Cormann, who is now rising to his feet. (Time expired)

Senator Cormann: Chair, I'm enjoying the speech by the Leader of the Opposition in the Senate so much that, if she seeks leave to speak for 10 more minutes, the government will grant it.

(Extension of time granted)

Senator WONG: You know what, we are all supposed to be grateful that they are doling out five minutes here and 10 minutes there! We are supposed to say, 'Thank you, Mathias, for allowing senators elected to this place, who sit at this table, to actually debate.' Tell me, did Senator Patrick have a crisis of confidence? Well, I'm happy to speak for 10 minutes.

Government senators interjecting

The CHAIR: Order! Senator Wong, resume your seat, please. Senator Wong has the right to be heard in silence.

Senator WONG: I'm very happy to talk about stage 3 in a little more detail. I hope that Senator Storer—who yesterday made a very substantive contribution, although it was cut off—has the opportunity to as well. First, let's remind ourselves that the hyperbole from the other side that Labor is standing in the way of low- and middle-income tax cuts is a Liberal lie. It is simply untrue. We have made clear from budget night that we support all of the tax cuts commencing next month. Let's stop pretending that hyperbole is truthful, let's stop pretending that that has any element of truth to it and let's recall that that is entirely a Liberal lie in order to give the coalition political cover for the fact that they want to hold those tax cuts hostage to the 2024 tax cuts. That is the first point.

The second point is this: there are two primary reasons we oppose stage 3. First, it is fiscally reckless. As I outlined in my second reading speech yesterday, it is clear from evidence to the Senate inquiry that this element of the tax package down the track—I think it is by 2026-27—will be growing at 12 per cent per year. What this Senate is doing by locking in that tax cut is proposing a reduction in revenue over time that grows at 12 per cent a year. That is an enormously expensive proposition for the federal budget. Unlike those opposite, we don't think all tax is theft. We actually think it's a good thing for the federal budget to be able to fund things like the age pension, aged care, health, education and social security, as well as defence and infrastructure. Why would you have a tax measure that grows so unsustainably be locked in and unfunded six years out, which will ensure it will be more difficult for any government down the track to support proper funding of health, education and essential social services?

I made the point in the second reading speech that it is that growth in the cost of the tax package that is in dispute. It's the only part of the tax package that is in dispute in this chamber. We oppose stage 2; but, in terms of the numbers in this chamber, stage 3 is the only part that is actually in dispute. I made the point that if there were an expenditure program growing at 12 per cent, you would hear the baying from the other side for it to be cut. This is three or four times more than the annual growth rate of spending on defence. This is, from recollection, six times more than the annual growth rate in family benefits. This is four times more, or thereabouts, than the growth in education funding. I laid these parameters out in my second reading speech.

This Senate is now rolling over—or proposing to, if Senator Patrick completes his backflip—to put in place, six years ahead, a tax plan that will grow in cost at 12 per cent a year. It was John Daley from the Grattan Institute who pointed out the fiscal recklessness of the plan. He pointed out that the likelihood of there being some external economic shock to which the government has to respond, as we had to respond during the GFC, is substantial. At six years out, why would you lock in a structural change to your tax system which would so deprive the Commonwealth government of revenue which is essential? From a government that claims it is fiscally responsible, it is fiscally reckless.

The second point I'd make is the one I've made previously, which is that this is not a progressive taxation measure. Remember what stage 3 cuts do: they fundamentally flatten the tax scale between $40,000 and $200,000. And remember what that means: it means that we are essentially saying that people on $40-something thousand and people on $200,000 ought to be treated equally in the tax system. Progressive taxation for the Labor Party is something we actually believe in. We believe in it because it's fair; but we also believe in it because we do believe that government should have the capacity to provide decent health, decent education, decent social services and decent aged care for our community, as well as funding our national security imperatives—which remain imperative. Why would you have a tax cut that grows so much faster than defence spending? Why would you do that? Why would you do that six years out?

Miranda Stewart of the ANU said that this particular measure is both inefficient and a retrograde step that undermines 100 years of progressive income tax rate structure in this country. But that is what those opposite are voting for. What they want to do is to make sure that that tax cut holds hostage the tax cuts which start next month. That is only a political strategy; there is no logic to that. There's actually no logic, in fact, for Senator Cormann getting so stressed and having to guillotine and gag today and yesterday. The government, in fact, has two weeks—there's a second week. The only reason there's been a guillotine and a gag this week is that they want to get it done before the weekend. That is the only reason.

Let's also go to the unfairness of the package. Senator Hanson and Senators Patrick and Griff ought to be aware of the distributional impact of these tax cuts. The reality is that when all three stages of this tax package are implemented the benefits go overwhelmingly to high-income earners. I think 62 per cent of the benefits go to 20 per cent of taxpayers. Do people understand that? They keep talking about low-and middle-income Australians—62 per cent of the benefits go to 20 per cent of taxpayers. If you look at stage 3 alone, it is even more. As a whole, for the whole government tax package, two-thirds of the benefits go to the highest income earners in Australia. So every time Senator Cormann, Senator Birmingham and others get up and say we are for low- and middle-income Australia, remember that figure: two-thirds of the benefits go to the highest income earners in Australia.

Finally, I want to come back to the point about Longman. Senator Hanson comes in here and styles herself—she's on the front-page of one of Australia's papers today—as supporting the battlers. Well, she's certainly given herself a tax cut by supporting the government on this. I'll come back to those earning over $200,000, who are the primary beneficiaries of the aspect of this package in dispute. The national average per electorate of the number of people earning over that amount is 2,054. The number in Longman is 703. The number in Wentworth is 10,367. So, when the press gallery and others talk to Senator Hanson and she tells you that she's the champion of the battlers, I hope that they ask her why she voted for a tax cut which so overwhelmingly benefits high-income earners and so overwhelmingly benefits those people living in Mr Turnbull's electorate. And why is it that she voted for a tax package that so does not benefit those who live in Longman, in a relative sense.

This is a fiscally reckless package. It's a package which requires this Senate to sign off on tax cuts in six years time, two elections away, but Malcolm Turnbull wants it now. And the government is seeking to use those tax cuts to hold hostage the tax cuts for low- and middle-income Australia. That is the wrong thing to do and, if Senator Patrick does not hold to the position he held yesterday, he ought to explain why in 24 hours he's done this, why in 24 hours he's sold people out. He hasn't even put pressure on the government to blink. Senator Cormann said, 'Mate, we're not going to blink,' and he said: 'Okay, I'll just back down easy. I'll give you all these tax cuts that won't help the people in Mayo and that will ensure it will be much harder for future governments to fund aged care— (Time expired)