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Monday, 19 March 2018
Page: 1430


Senator BROCKMAN (Western Australia) (16:16): I was a little bit bemused by this MPI when I read it and I thought, 'Senator Collins, you're really not trying hard enough with these MPIs.' We've got a grab bag of issues here: cost-of-living pressures, climate change, undermining wages and conditions, and the importance of ensuring that children of any postcode in Australia, city or country, can get a quality education. They are all very important issues, but it is a very strange way of phrasing an MPI. I was wondering to myself, 'What could this possibly be about?' Of course, what it is really about is a chance for the Labor Party, as we've just seen from Senator Chisholm, to have a whack at the Greens—a whack at the government on the way through, of course, but a whack at the Greens. It isn't surprising at all that, after we saw the Labor Party tacking to the left and following the Greens on various issues as they chased a result in Batman, they are now attempting to tack back to the centre now the Batman by-election is out of the way. It's a pretty cynical exercise. It's an exercise that the Australian people see through pretty clearly.

In addressing this grab bag of issues, one of the key issues on the table at the moment is the current enterprise tax plan from this government. The enterprise tax plan is coming in multiple parts and it has at its foundation the idea that keeping Australian business as strong as possible by encouraging economic growth is how we drive business growth, wages and employment growth. We grow the economy for everyone by making the economy a positive experience for as many people as possible in Australia. That's why what we're trying to deliver is so important.

We have already seen the first part of that legislated in this place for businesses earning up to $50 million in turnover each year and with particular changes that assist those smaller businesses with $2 million to $10 million in turnover every year. In addition to the tax cut itself, there are things like the small business incentive and the instant asset write-off, which I know has been used extensively by small businesses to upgrade plant and equipment, to invest in new technologies for their business, to help grow their business and to employ more people. We've also seen the pooling of depreciation and GST being able to be calculated on a cash flow basis—all things that advantage these small and medium businesses, which is very important.

The next part of the enterprise tax plan grows those tax cuts to larger businesses. The most important thing to remember in that regard is that larger businesses feed through to smaller businesses in terms of employment, growth and opportunities. You see this throughout the economy but certainly in my home state of Western Australia. I was recently at what you'd have to say is a medium-sized business, Legeneering. It's a business that employs around 200 people, is based in the electorate of Fremantle and services, largely, mining industry clients. That is a business that started just 12 years ago, in 2005, with three employees and an apprentice. As I said, today that business employs around 200 people. It's a very successful business. Who does that business contract to? Who does that business derive its business from? One of its major clients is Woodside, which, we all acknowledge, is a large business. Woodside is a company that started about 64 years ago, and that is a business that started with just one person and an idea.

The idea is that we are trying to lower tax rates so more people can grow their businesses and take their businesses from one person to two people to 20 people to 200 people to many thousands of people. Woodside currently employs about 3,000 people directly and indirectly provides opportunities to about 20,000 people. Every big business started off as a small business and it's really important to recognise that, in this space, we have to stay globally competitive if we are going to encourage and allow those small businesses to grow to medium-sized businesses and then grow to large businesses. That bastion of low taxes, France, has a corporate tax rate of 15 per cent. In Hong Kong it is 16½ per cent, in Canada it is 15 per cent, in Ireland it is 12½ per cent and in Singapore it is 17 per cent and lower for some companies. In the United Kingdom it is 19 per cent, with a plan to drop to, I believe, 17 per cent. In the US currently, at the federal level, it is 21 per cent, with a plan to drop to 15 per cent. In a world where capital is mobile—and it certainly is—and business decisions are made on a long-term horizon, for Australia not to look at its corporate tax rate would be a severe problem in the future. We need to encourage those businesses to want to invest in Australia long term and we need to keep our corporate tax rate competitive with the rest of the world.

In this grab bag of an MPI, we also have climate change. Obviously, the National Energy Guarantee is very important in order both to address our energy security issues and to meet our international commitments. Again, this feeds directly into business profitability. The modelling that was conducted on the National Energy Guarantee by Frontier Economics shows that a medium-sized business such as a supermarket could save over $400,000 a year. This is a significant amount of money to those small and medium-sized enterprises that employ Australians. This is the key thing. I recently met with the owner of a small supermarket from South Australia whose electricity bill had gone up in one year by $100,000. How many small and medium-sized businesses can sustain an increase in their costs of $100,000 in 12 months? We need policies in place to drive down energy costs, and the National Energy Guarantee clearly will do that. We need everyone to come on board this policy. Hopefully, with a new government being elected in South Australia in recent days, we will see a much more productive conversation taking place in this area.

When it comes to emissions, what does the National Energy Guarantee provide? It will see a 26 per cent reduction in the emissions from the National Electricity Market. This is a significant contribution to our international commitments and a significant way in which this government is both addressing the issues of energy efficiency and energy production and reliability and meeting our international commitments.

As I said, I wondered why I came in here, and it was clearly so the Labor Party could try and tack back to the centre and have a whack at the Greens. I feel like making a contribution between the Labor Party and the Greens. I should let them go at it. But I will reflect again on why it is important that this government gets support from the crossbench for its enterprise tax plan. It is a very important economic reform. Growth is not an abstract number in the budget; growth is what will drive businesses to employ more people, for wages to be able to increase over time. Growth is what will give people the opportunities for the jobs for the next generation. It is certainly something that all people in this place should support, and I would encourage the crossbench to seriously consider that as they consider their position on the government's enterprise tax plan in the future.