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Monday, 26 March 2018
Page: 2113

Senator O'NEILL (New South Wales) (15:05): I move:

That the Senate take note of the answers given by the Minister for Finance (Senator Cormann), the Minister for Education and Training (Senator Birmingham) and the Minister for International Development and the Pacific (Senator Fierravanti-Wells) to questions without notice asked by Senators McAllister, Watt and O’Neill today relating to proposed company tax cuts.

At the start I want to take the opportunity to put on the record just a few indications of how totally out of touch this government is. Right now, when inequality is at a record high and wages growth is at a record low, is the time that this government decides it's a good idea to give a $65 billion tax cut to the top end of town. How out of touch can this government get? It's breathtaking. I think of things we talked about in the last year. Right here and now—when wage growth is at a record low of about 2.1 per cent, essentials are rising in cost, electricity prices have grown around six times greater than wages growth, health prices are around two times greater than wages growth, nearly 1.1 million people are underemployed, more than 290,000 people are unemployed and young people are struggling to find secure work—this government adds a cut in income tax for people who earn over $180,000 while slugging working- and middle-class Australians with a $44 billion tax—that was the Medicare levy, which I expect most of the people in this room will be paying. That's the context, of deep need across our community, in which this government has decided it wants to give a $65 billion tax cut to big businesses.

The contrast between Labor's view and the current government's view of this couldn't be any starker. I want to go to some remarks that were put on the record in the debate today by Senator Wong, the leader of Labor in the Senate, who said:

… few policies in recent years … have more starkly illustrated the difference between the Labor Party and the coalition than this government's commitment to handing $65 billion to Australia's biggest and wealthiest companies.

Recall that this is a tax cut which comes at a time when government debt is at record levels, when Australia's health system is under pressure, our schools need more resources, and inequality in this country is worsening—

She said the government's priority is:

… a massive handout to our most powerful and most wealthy.

For those who are interested she also said:

It's also a transfer of wealth offshore, with an estimated 60 per cent of the benefit of the tax cut likely to head overseas.

That's the reality that we're confronting with this out-of-touch government.

What's happening in the US should give us a bit of warning about why we shouldn't allow this government to go ahead with this. The crossbenchers who are holding firm should remain firm, because we can see what's happened in the US, where this has gone on. TrimTabs' research says that the tax cut to big businesses has meant that companies, instead of putting their money into jobs and investment, growing their businesses and creating jobs, are buying back their own shares. We know that so far in the US there's been a $214 billion buyback of shares. There have been no jobs and no investment in the things that create jobs; just the buyback of their own shares. The Bank of America said the S&P 500 companies are all repatriating their foreign profits, and they expect that they're going to buy about $450 billion worth of their stock back in addition to the $214 billion that I've already put on the record. That's triple the amount of previous record share buybacks in any single year.

So what has Mr Trump done that this government wants to do? He has given a big tax cut to the top end of town and is saying, 'It'll trickle down, it'll get to you little people some day.' But what's going on is that big business is using that to buy back their own shares to fatten their profits for themselves and give bigger pay rises to the CEOs. That is what a big business tax cut will do; it will not help the people Labor is standing up for.

My question today to Senator Fierravanti-Wells put on the record that the government agrees with all these things. They are making Australians work until they're 70. They admitted they're cutting the energy supplement of $14 a fortnight from pensioners. They admitted there is a cut to pension indexation. They have cut $1 billion from pensioner concessions. They have axed the $900 seniors supplement and cut the pension to around 370,000 pensioners. They didn't dispute that; Senator Fierravanti-Wells quite happily accepted that and went on reading her notes about 2009—completely out of touch! This government is attacking working people and pensioners at every single turn but ready to give a $65 billion cut to the top end of town. (Time expired)